B&W Draft 3/30/98
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IndyMac ABS, Inc.,
as Depositor,
as Sponsor and Master Servicer,
and
as Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of ___________, 199_
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Home Equity Loan Asset Backed Certificates
Series 199_-_
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.01. Definitions.......................................... 1
Section 1.02. Interest Calculations................................ 21
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates;
Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention
of Obligation to Fund Advances Under Credit Line
Agreements.................................................. 23
Section 2.02. Acceptance by Trustee; Retransfer of
Mortgage Loans.............................................. 28
Section 2.03. Representations and Warranties Regarding
the Master Servicer......................................... 30
Section 2.04. Representations and Warranties of the
Sponsor Regfer
of Certain Mortgage Loans................................... 31
Section 2.05. Covenants of the Depositor.................................. 37
Section 2.06. Transfers of Mortgage Loans at Election
of Transferor............................................... 38
Section 2.07. Execution and Authentication of Certificates................ 39
Section 2.08. Tax Treatment............................................... 40
Section 2.09. Representations and Warranties of the Depositor............. 40
ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. The Master Servicer.......................................... 42
Section 3.02. Collection of Certain Mortgage Loan
Payments..................................................... 44
Section 3.03. Withdrawals from the Collection Account...................... 46
Section 3.04. Maintenance of Hazard Insurance;
Property Protection Expenses................................. 46
Section 3.05. Assumption and Modification Agreements....................... 47
Section 3.06. Realization Upon Defaulted Mortgage
Loans; Repurchase of Certain Mortgage Loans.................. 48
Section 3.07. Trustee to Cooperate......................................... 49
Section 3.08. Servicing Compensation; Payment of
Certain Expenses by Master Servicer.......................... 50
Section 3.09. Annual Statement as to Compliance............................ 50
Section 3.10. Annual Servicing Report...................................... 51
Section 3.11. Access to Certain Documentation and
Information Regarding the Mortgage Loans..................... 51
Section 3.12. Maintenance of Certain Servicing
Insurance Policies........................................... 52
Section 3.13. Reports to the Securities and Exchange
Commission................................................... 52
Section 3.14. Tax Returns.................................................. 52
Section 3.15. Information Required by the Internal
Revenue Service Generally and Reports of
Foreclosures and Abandonments of Mortgaged
Property..................................................... 53
ARTICLE IV
Servicing Certificate
Section 4.01. Servicing Certificate......................................... 54
Section 4.02. Claims upon the Policy; Policy Payments
Account....................................................... 57
Section 4.03. Replacement Policy............................................ 59
Section 4.04. Effect of Payments by the Credit
Enhancer; Subrogation......................................... 59
Section 4.05. Optional Advances of the Master
Servicer...................................................... 60
ARTICLE V
Payments and Statements to
Certificateholders; Rights of Certificateholders
Section 5.01. Distributions................................................ 61
Section 5.02. Calculation of the Investor Certificate
Rate......................................................... 64
Section 5.03. Statements to Certificateholders............................. 64
Section 5.04. Rights of Certificateholders................................. 66
ARTICLE VI
The Certificates
Section 6.01. The Certificates............................................. 67
Section 6.02. Registration of Transfer and Exchange of
Investor Certificates; Appointment of Registrar.............. 67
Section 6.03. Mutilated, Destroyed, Lost or Stolen
Certificates................................................. 70
Section 6.04. Persons Deemed Owners........................................ 70
Section 6.05. Restrictions on Transfer of Transferor
Certificates................................................. 70
Section 6.06. Appointment of Paying Agent.................................. 72
Section 6.07. Acceptance of Obligations.................................... 73
ARTICLE VII
The Master Servicer, the Sponsor and the Depositor
Section 7.01. Liability of the Sponsor, the Master
Servicer and the Depositor................................... 74
Section 7.02. Merger or Consolidation of, or
Assumption of the Obligations of, the Master
Servicer or the Depositor.................................... 74
Section 7.03. Limitation on Liability of the Master
Servicer and Others.......................................... 74
Section 7.05. Delegation of Duties......................................... 76
Section 7.06. Indemnification of the Trust by the
Master Servicer.............................................. 76
Section 7.07. Indemnification of the Trust by the
Transferor................................................... 76
Section 7.08. Limitation on Liability of the Transferor.................... 77
ARTICLE VIII
Servicing Termination
Section 8.01. Events of Servicing Termination.............................. 78
Section 8.02. Trustee to Act; Appointment of
Successor.................................................... 80
Section 8.03. Notification to Certificateholders........................... 81
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee............................................ 82
Section 9.02. Certain Matters Affecting the Trustee........................ 83
Section 9.03. Trustee Not Liable for Certificates or
Mortgage Loans............................................... 85
Section 9.04. Trustee May Own Certificates................................. 86
Section 9.05. Master Servicer to Pay Trustee's Fees
and Expenses................................................. 86
Section 9.06. Eligibility Requirements for Trustee......................... 87
Section 9.07. Resignation or Removal of Trustee............................ 87
Section 9.08. Successor Trustee............................................ 88
Section 9.09. Merger or Consolidation of Trustee........................... 89
Section 9.10. Appointment of Co-Trustee or Separate
Trustee...................................................... 89
Section 9.11. Limitation of Liability...................................... 90
Section 9.12. Trustee May Enforce Claims Without
Possession of Certificates................................... 91
Section 9.13. Suits for Enforcement........................................ 91
ARTICLE X
Termination
Section 10.01. Termination................................................. 92
[ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events................................... 95
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment................................................... 97
Section 12.02. Recordation of Agreement.................................... 99
Section 12.03. Limitation on Rights of Certificate-
holders..................................................... 99
Section 12.04. Governing Law...............................................100
Section 12.05. Notices.....................................................100
Section 12.06. Severability of Provisions..................................101
Section 12.07. Assignment..................................................101
Section 12.08. Certificates Nonassessable and Fully
Paid........................................................101
Section 12.09. Third-Party Beneficiaries...................................101
Section 12.10. Counterparts................................................101
Section 12.11. Effect of Headings and Table of
Contents....................................................102
EXHIBIT A - FORM OF INVESTOR CERTIFICATE....................................A-1
EXHIBIT B - FORM OF TRANSFEROR CERTIFICATE..................................B-1
EXHIBIT C - MORTGAGE LOAN SCHEDULE..........................................C-1
Exhibit D - FORM OF CREDIT LINE AGREEMENT...................................D-1
Exhibit E - LETTER OF REPRESENTATIONS.......................................E-1
Exhibit F - FORM OF INVESTMENT LETTER.......................................F-1
Exhibit G - FORM OF REQUEST FOR RELEASE.....................................G-1
This Pooling and Servicing Agreement, dated as of __________, 199_,
among IndyMac ABS, Inc., as Depositor (the "Depositor"), ______________________,
as Sponsor and Master Servicer (in such capacities, the "Sponsor" and the
"Master Servicer", respectively), and ___________________________, as Trustee
(the "Trustee"),
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
Accelerated Principal Distribution Amount: With respect to any
Distribution Date, the amount, if any, required to reduce the Investor
Certificate Principal Balance (after giving effect to the distribution of all
other amounts actually distributed on the Investor Certificates on such
Distribution Date) so that the Invested Amount (immediately following such
Distribution Date) exceeds the Investor Certificate Principal Balance (as so
reduced) by the Required Overcollateralization Amount.
Additional Balance: As to any Mortgage Loan and day, the
aggregate amount of all Draws conveyed to the Trust pursuant to
Section 2.01.
Adjustment Date: With respect to any Interest Period, the
second LIBOR Business Day preceding the first day of such
Interest Period.
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 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 hereof and supplements hereto.
Alternative Principal Payment: As to any Distribution Date,
the amount (but not less than zero) equal to Principal Collections for
such Distribution Date less the aggregate of Additional Balances
created during the related Collection Period.
Appraised Value: [As to any Mortgaged Property, the value established
by any of the following: (i) with respect to Credit Line Agreements with Credit
Limits greater than $[____________], by a full appraisal, (ii) with respect to
Credit Line Agreements with Credit Limits equal to or less than $[____________],
by a drive by inspection of such Mortgaged Property made to establish compliance
with the underwriting criteria then in effect in connection with the application
for the Mortgage Loan secured by such Mortgaged Property, and (iii) with respect
to any Mortgage Loan as to which the Servicer consents to a new senior lien
pursuant to Section 3.01(a), in compliance with the underwriting criteria then
in effect in connection with the application for the related senior mortgage
loan.]
Asset Balance: As to any Mortgage Loan, other than a Liquidated
Mortgage Loan, and day, the related Cut-off Date Asset Balance, plus (i) any
Additional Balance in respect of such Mortgage Loan, minus (ii) all collections
credited as principal against the Asset Balance of any such Mortgage Loan in
accordance with the related Credit Line Agreement. For purposes of this
definition, a Liquidated Mortgage Loan shall be deemed to have an Asset Balance
equal to the Asset Balance of the related Mortgage Loan immediately prior to the
final recovery of related Liquidation Proceeds and an Asset Balance of zero
thereafter.
Assignment of Mortgage: With respect to any Mortgage, an assignment,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property is
located to reflect the sale of the Mortgage to the Trustee, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough
of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
Available Transferor Subordinated Amount: As to any Distribution Date,
an amount equal to the lesser of (a) the Transferor Principal Balance for such
Distribution Date and (b) the Required Transferor Subordinated Amount for such
Distribution Date.
Bankruptcy Remote Entity: Any special or limited purpose corporation,
partnership or other entity structured in all material respects in accordance
with the requirements of one or more nationally recognized statistical rating
organizations [and the Credit Enhancer] for bankruptcy remote entities.
BIF: The Bank Insurance Fund, as from time to time constituted, created
under the Financial Institutions Reform, Recovery and Enhancement Act of 1989,
or if at any time after the execution of this instrument the Bank Insurance Fund
is not existing and performing duties now assigned to it, the body performing
such duties on such date.
Billing Cycle: With respect to any Mortgage Loan and Collection Period,
the billing period specified in the related Credit Line Agreement and with
respect to which amounts billed are received during such Collection Period.
Book-Entry Certificate: Any Investor Certificate registered in the name
of the Depository or its nominee, ownership of which is reflected on the books
of the Depository or on the books of a Person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the States of New York or California are
required or authorized by law to be closed.
Certificate: An Investor Certificate or a Transferor
Certificate.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent, direction, waiver or request pursuant to this Agreement, (x)
any Investor Certificate registered in the name of the Transferor, or any Person
known to a Responsible Officer to be an Affiliate of either the Depositor or the
Transferor and (y) any Investor Certificate for which the Transferor, or any
Person known to a Responsible Officer to be an Affiliate of either such entity
is the Certificate Owner shall be deemed not to be outstanding (unless to the
knowledge of a Responsible Officer (i) the Trans- feror, or such Affiliate is
acting as trustee or nominee for a Person who is not an Affiliate of the
Transferor and who makes the voting decision with respect to such Investor
Certificate or (ii) the Transferor, or such Affiliate is the Certificate Owner
of all the Investor Certificates) and the Percentage Interest evidenced thereby
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect any such consent, direction, waiver or
request has been obtained.
Certificate Owner: The Person who is the beneficial owner
of a Book-Entry Certificate.
Certificate Register and Certificate Registrar: The regis-
ter maintained and the registrar appointed pursuant to Section
6.02.
Closing Date: ___________, 199_.
Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time (or any successor statute thereto).
Collateral Value: With respect to any Mortgaged Property, [the lesser
of (i) the Appraised Value of the Mortgaged Property and (ii) in the case of a
Mortgaged Property purchased within one year of the origination of the related
Mortgage Loan, the purchase price of the Mortgaged Property].
Collection Account: The custodial account or accounts cre-
ated and maintained for the benefit of the Investor Certificate-
holders [and the Credit Enhancer] pursuant to Section 3.02(b).
The Collection Account shall be an Eligible Account.
Collection Period: With respect to any Distribution Date
and any Mortgage Loan, the calendar month preceding the month of
such Distribution Date.
Combined Loan-to-Value Ratio: [With respect to any Mortgage Loan as of
any date, the percentage equivalent of the fraction, the numerator of which is
the sum of (i) the Credit Limit (as of the date of execution of the related
Credit Line Agreement (or any subsequent date as of which such Credit Limit may
be determined in connection with an increase in the Credit Limit for such
Mortgage Loan)) and (ii) the outstanding principal balance (as of the date of
execution of the related Credit Line Agreement (or any subsequent date as of
which such outstanding principal balance may be determined in connection with an
increase in the Credit Limit for such Mortgage Loan)) of any mortgage loan or
mortgage loans that are senior or equal in priority to the Mortgage Loan and
which is secured by the same Mortgaged Property and the denominator of which is
the Collateral Value of the related Mortgaged Property.]
Corporate Trust Office: The principal office of the Trustee
at which at any particular time its corporate business shall be
administered, which office on the Closing Date is located at
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Attention: _____________________________.
Credit Enhancement Draw Amount: As to any Distribution Date, an amount
equal to the sum of (x) the amount by which the amount to be distributed to
Investor Certificateholders pursuant to Section 5.01(a)(iii) exceeds the amount
of Investor Interest Collections on deposit in the Collection Account on the
Business Day preceding such Distribution Date that is available to be applied
therefor and the amount if any deposited in the Collection Account in respect
of such Distribution Date pursuant to Section 4.05, (y) the Guaranteed
Principal Distribution Amount and (z) any Preference Claim for such
Distribution Date.
[Credit Enhancer: ___________________________, a _________
_____________________________________, any successor thereto or
any replacement credit enhancer substituted pursuant to Section
4.03.]
[Credit Enhancer Default: The failure by the Credit
Enhancer to make a payment required under the Policy in
accordance with the terms thereof.]
Credit Limit: As to any Mortgage Loan, the maximum Asset
Balance permitted under the terms of the related Credit Line
Agreement.
Credit Limit Utilization Rate: As to any Mortgage Loan, the percentage
equivalent of a fraction the numerator of which is the Cut-off Date Asset
Balance for such Mortgage Loan and the denominator of which is the related
Credit Limit.
Credit Line Agreement: With respect to any Mortgage Loan, the related
credit line account agreement executed by the related Mortgagor and any
amendment or modification thereof.
[Cumulative Loss Test Violation: As defined in the Insurance
Agreement.]
Custodial Agreement: Any Custodial Agreement between any Custodian and
the Trustee, which is reasonably acceptable in form and substance to the Credit
Enhancer, relating to the custody of the Mortgage Loans and the Related
Documents.
Custodian: Any custodian appointed by the Trustee under a
Custodial Agreement to maintain all or a portion of the Mortgage
Files pursuant to Section 2.01(b).
Cut-off Date: ______________, 199_.
Cut-off Date Asset Balance: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-off
Date.
Cut-off Date Pool Balance: The Pool Balance calculated as
of the Cut-off Date.
Defective Mortgage Loan: [ Mortgage Loan subject to
retransfer pursuant to Section 2.02, 2.04 or 2.09.]
Deficiency Amount: As defined in Section 5.01(d).
Definitive Certificates: As defined in Section 6.02(c).
Delivery Event: As defined in Section 2.01.
Depositor: IndyMac ABS, Inc., Delaware corporation, or its
successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is Cede & Co., as the registered Holder of
Investor Certificates evidencing $[___________] in initial aggregate principal
amount of the Investor Certificates. The Depository shall at all times be a
"clearing corporation" as defined in Section 8-102(3) of the UCC of the State of
New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date,
the third Business Day prior to such Distribution Date.
Distribution Date: The _________ day of each month, or if
such day is not a Business Day, then the next Business Day,
beginning in _______ 199_.
Draw: With respect to any Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the Cut-off Date in
accordance with the related Mortgage Note.
Due Date: As to any Mortgage Loan, the _________ day of the
month.
Electronic Ledger: The electronic master record of home
equity credit line mortgage loans maintained by the Master
Servicer or by the Sponsor, as appropriate.
Eligible Account: (i) An account that is maintained with a depository
institution whose debt obligations throughout the time of any deposit therein
are rated in the highest short-term debt rating category by the Rating Agencies,
(ii) one or more accounts with a depository institution having a minimum
long-term unsecured debt rating of "BBB-" by Standard & Poor's and "Baa3" by
Moody's, which accounts are fully insured by either SAIF or BIF, (iii) a
segregated trust account maintained with the Trustee or an Affiliate of the
Trustee in its fiduciary capacity, or (iv) an account otherwise acceptable to
each Rating Agency and the Credit Enhancer, as evidenced at closing by delivery
of a rating letter by each Rating Agency and thereafter by delivery of a letter
from (a) each Rating Agency to the Trustee, within 30 days of receipt of notice
of such deposit, to the effect that such deposit shall not cause such Rating
Agency to reduce or withdraw its then-current rating of the Certificates without
regard to the Policy and (b) from the Credit Enhancer to the Trustee, within 30
days of receipt of notice of such deposit, to the effect that such account is
acceptable to it.
Eligible Investments: (i) obligations of the United States or any
agency thereof, provided the timely payment of such obligations are backed by
the full faith and credit of the United States; (ii) general obligations of or
obligations guaranteed by any state of the United States or the District of
Columbia receiving the highest long-term debt rating of each Rating Agency, or
such lower rating as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, without regard to
the Policy; (iii) commercial paper issued by [__________________] or any of its
Affiliates; provided that such commercial paper is rated no lower than A-1 by
Standard & Poor's and P-2 by Moody's, and the long-term debt of
[______________________] is rated at least A3 by Moody's, or such lower ratings
as will not result in the downgrading or withdrawal of the rating then assigned
to the Certificates by any Rating Agency, without regard to the Policy; (iv)
commercial or finance company paper which is then receiving the highest
commercial or finance company paper rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, without regard to the Policy;
(v) certificates of deposit, demand or time deposits, or bankers' acceptances
issued by any depository institution or trust company incorporated under the
laws of the United States or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal depository
institution in a holding company system, the commercial paper or long-term
unsecured debt obligations of such holding company, but only if Xxxxx'x is not a
Rating Agency) are then rated one of the two highest long-term and the highest
short-term ratings of each Rating Agency for such securities, or such lower
ratings as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, without regard to the Policy;
(vi) demand or time deposits or certificates of deposit issued by any bank or
trust company or savings institution to the extent that such deposits are fully
insured by the FDIC; (vii) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation containing, at the time of the
issuance of such agreements, such terms and conditions as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by any
Rating Agency, without regard to the Policy; (viii) repurchase obligations with
respect to any security described in clauses (i) and (ii) above, in either case
entered into with a depository institution or trust company (acting as
principal) described in clause (v) above; (ix) securities (other than stripped
bonds, stripped coupons or instruments sold at a purchase price in excess of
115% of the face amount thereof) bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the two
highest ratings of each Rating Agency (except if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such securities), or such lower rating as will not result
in the downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, without regard to the Policy, as evidenced
by a signed writing delivered by each Rating Agency; (x) interests
in any money market fund which at the date of acquisition of the interests in
such fund and throughout the time such interests are held in such fund has the
highest applicable rating by each Rating Agency or such lower rating as will not
result in the downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency, without regard to the Policy; (xi) short term
investment funds sponsored by any trust company or national banking association
incorporated under the laws of the United States or any state thereof which on
the date of acquisition has been rated by each Rating Agency in their respective
highest applicable rating category or such lower rating as will not result in
the downgrading or withdrawal of the rating then assigned to the Certificates by
any Rating Agency, without regard to the Policy; and (xii) such other
investments having a specified stated maturity and bearing interest or sold at a
discount acceptable to each Rating Agency as will not result in the downgrading
or withdrawal of the rating then assigned to the Certificates by any Rating
Agency, without regard to the Policy, as evidenced by a signed writing delivered
by each Rating Agency; provided that no such instrument shall be an Eligible
Investment if such instrument evidences 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 provided a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations; provided further that no
instrument described hereunder may be purchased at a price greater than par if
such instrument may be prepaid or called at a price less than its purchase price
prior to its stated maturity.
Eligible Substitute Mortgage Loan: [A Mortgage Loan substituted by the
Sponsor for a Defective Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding Asset Balance (or in the case of a
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an
aggregate Asset Balance), not 10% more or 10% less than the Transfer Deficiency,
if any, relating to such Defective Mortgage Loan; (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 Loan Rate based
on the same Index with adjustments to such Loan Rate made on the same
Interest Rate Adjustment Date as that of the Defective Mortgage Loan; (iv) have
a Gross Margin that is not less than the Gross Margin of the Defective Mortgage
Loan and not more than 100 basis points higher than the Gross Margin for the
Defective Mortgage Loan; (v) have a Mortgage of the same or higher level of
priority as the Mortgage relating to the Defective Mortgage Loan at the time
such Mortgage was transferred to the Trust; (vi) have a remaining term to
maturity not more than six months earlier and not more than 60 months later than
the remaining term to maturity of the Defective Mortgage Loan; (vii) comply with
each representation and warranty set forth in Section 2.04 (deemed to be made as
of the date of substitution); and (viii) have an original Combined Loan-to-Value
Ratio not greater than that of the Defective Mortgage Loan. More than one
Eligible Substitute Mortgage Loan may be substituted for a Defective Mortgage
Loan if such Eligible Substitute Mortgage Loans meet the foregoing attributes in
the aggregate and such substitution is approved in writing in advance by the
Credit Enhancer.]
ERISA: Employee Retirement Income Security Act of 1974, as
amended.
Event of Servicing Termination: As defined in Section 8.01.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Asset Balance (plus accrued and unpaid interest thereon
at the applicable Loan Rate from the date interest was last paid to the end of
the Collection Period during which such Mortgage Loan became a Liquidated
Mortgage Loan) of such Liquidated Mortgage Loan immediately prior to the final
recovery of its Liquidation Proceeds.
Gross Margin: As to any Mortgage Loan, the percentage set
forth as the "Gross Margin" for such Mortgage Loan on Exhibit C
hereto.
[Guaranteed Distribution: With respect to any Distribution
Date, the sum of the (i) the Guaranteed Principal Distribution
Amount and (ii) the amount to be distributed to Certificate-
holders pursuant to Section 5.01(a)(iii) for such Distribution
Date.]
[Guaranteed Principal Distribution Amount: With respect to (i) any
Distribution Date on which the Available Transferor Subordinated Amount and any
Overcollateralization Amount has been reduced to or equals zero, other than the
Distribution Date in ________ ____, the amount, if any, required to reduce the
Investor Certificate Principal Balance (after giving effect to the distributions
of Interest Collections and Principal Collections that are allocable to
principal on the Investor Certificates on such Distribution Date) to the
Invested Amount immediately following such Distribution Date and (ii)
the Distribution Date in ________ ____, the amount by which the outstanding
Investor Certificate Principal Balance (after giving effect to Interest
Collections allocable and distributable as principal on the Investor
Certificates on such Distribution Date) exceeds the sum of the amounts
on deposit in the Collection Account available to be distributed to the Investor
Certificate- holders pursuant to Section 5.01(b) hereof.]
Increased Senior Lien Limitation: As defined in Section
3.01(a).
Index: With respect to each Interest Rate Adjustment Date for a
Mortgage Loan, the highest "prime rate" as published in the "Money Rates" table
of The Wall Street Journal as of the first business day of the calendar month.
Insolvency Event: As defined in Section 11.02(a).
[Insurance Agreement: The insurance and indemnity agreement
dated as of ___________, 199_ among the Depositor, the Sponsor,
the Master Servicer, the Trustee and the Credit Enhancer,
including any amendments and supplements thereto.]
Insurance Proceeds: Proceeds paid by any insurer (other than the Credit
Enhancer) pursuant to any insurance policy covering a Mortgage Loan, or amounts
required to be paid by the Master Servicer pursuant to the last sentence of
Section 3.04, net of any component thereof (i) covering any expenses incurred by
or on behalf of the Master Servicer in connection with obtaining such proceeds,
(ii) that is applied to the restoration or repair of the related Mortgaged
Property, (iii) released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures or (iv) required to be paid to any holder
of a mortgage senior to such Mortgage Loan.
Interest Collections: As to any Distribution Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance Proceeds and
Net Liquidation Proceeds as is allocable to interest on the applicable Mortgage
Loan) collected by the Master Servicer under the Mortgage Loans (excluding any
fees (including annual fees) or late charges or similar administrative fees paid
by Mortgagors) during the related Collection Period minus the Servicing Fee
payable to the Master Servicer with respect to the related Collection Period.
The terms of the related Credit Line Agreement shall determine the portion of
each payment in respect of such Mortgage Loan that constitutes principal or
interest.
Interest Period: With respect to any Distribution Date other than the
first Distribution Date, the period beginning on the preceding Distribution Date
and ending on the day preceding such Distribution Date, and in the case of the
first Distribution Date, the period beginning on the Closing Date and ending on
the day preceding the first Distribution Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, any
date on which the Loan Rate is adjusted in accordance with the related Credit
Line Agreement.
Intervening Assignments: As defined in Section 2.01(iv).
Invested Amount: With respect to any Distribution Date, an amount equal
to the Original Invested Amount minus (i) the amount of Principal Collections
previously distributed to Investor Certificateholders and minus (ii) the
Investor Loss Amounts for prior Distribution Dates.
Investor Certificate: Any certificate executed and authen-
ticated by the Trustee substantially in the form set forth in
Exhibit A hereto.
Investor Certificate Distribution Amount: As to any Distribution Date,
the sum of all amounts to be distributed to the Holders of Investor Certificates
pursuant to Article V and Article XI hereof.
Investor Certificateholder: The Holder of an Investor
Certificate.
Investor Certificate Interest: With respect to any Distribution Date,
interest for the related Interest Period at the applicable Investor Certificate
Rate on the Investor Certificate Principal Balance as of the first day of such
Interest Period (after giving effect to the distributions made on the first day
of such Interest Period).
Investor Certificate Principal Balance: With respect to any
Distribution Date, (a) the Original Investor Certificate Principal Balance less
(b) the aggregate of amounts actually distributed as principal on the Investor
Certificates.
Investor Certificate Rate: A per annum rate equal to, with respect to
the first Interest Period, ______%, and for any subsequent Interest Period, a
per annum rate equal to the sum of (a) LIBOR as of the second LIBOR Business Day
prior to the first day of such Interest Period and (b) ____%; provided that in
no event shall the Investor Certificate Rate with respect to any Interest Period
exceed the Maximum Rate for such Interest Period.
Investor Floating Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, the numerator of
which is the Invested Amount at the close of business on the preceding
Distribution Date (or at the Closing Date in the case of the first
Distribution Date) and the denominator of which is the Pool Balance, calculated
as of the beginning of the related Collection Period.
Investor Fixed Allocation Percentage: [__%].
Investor Interest Collections: As to any Distribution Date,
the product of (i) the Interest Collections during the related
Collection Period and (ii) the Investor Floating Allocation
Percentage for such Distribution Date.
Investor Loss Amount: With respect to any Distribution Date, the amount
equal to the product of (i) the Investor Floating Allocation Percentage for such
Distribution Date and (ii) the aggregate of the Liquidation Loss Amounts for
such Distribution Date.
Investor Loss Reduction Amount: With respect to any Distribution Date,
the portion, if any, of the Investor Loss Amount for such Distribution Date and
all prior Distribution Dates that has not been distributed to Investor
Certificateholders on such Distribution Date pursuant to Section 5.01(a)(iv) or
5.01(a)(v) or by way of the Credit Enhancement Draw Amount.
Investor Principal Collections: As to any Distribution
Date, the Investor Fixed Allocation Percentage of Principal Collections in
respect of such Distribution Date.
LIBOR: As to any date, the rate for United States dollar deposits for
one month which appears on the Telerate Screen LIBO Page 3750 as of 11:00 A.M.,
London time. If such rate does not appear on such page (or such other page as
may replace that page on that service, or if such service is no longer offered,
such other service for displaying LIBOR or comparable rates as may be reasonably
selected by the Depositor after consultation with the Trustee), the rate will be
the Reference Bank Rate. If no such quotations can be obtained and no Reference
Bank Rate is available, LIBOR will be LIBOR applicable to the preceding
Distribution Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of New York or in the city
of London, England are required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other
than any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided
that any assignment pursuant to Section 7.02 hereof shall not be deemed to
constitute a Lien.
Lifetime Rate Cap: With respect to each Mortgage Loan with respect to
which the related Mortgage Note provides for a lifetime rate cap, the maximum
Loan Rate permitted over the life of such Mortgage Loan under the terms of the
related Credit Line Agreement, as set forth on the Mortgage Loan Schedule.
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
Collection Period, that all Liquidation Proceeds which it expects to recover
with respect to the disposition of such Mortgage Loan or the related REO have
been recovered.
Liquidation Expenses: [Out-of-pocket expenses (exclusive of overhead)
which are incurred by the Master Servicer in connection with the liquidation of
any Mortgage Loan and not recovered under any insurance policy, including,
without limitation, legal fees and expenses, any unreimbursed amount expended
pursuant to Section 3.06 (including, without limitation, amounts advanced to
correct defaults on any mortgage loan which is senior to such Mortgage Loan and
amounts advanced to keep current or pay off a mortgage loan that is senior to
such Mortgage Loan) respecting the related Mortgage Loan and any related and
unreimbursed expenditures with respect to real estate property taxes, water or
sewer taxes, condominium association dues, property restoration or preservation
or insurance against casualty, loss or damage.]
Liquidation Loss Amount: With respect to any Distribution Date and any
Mortgage Loan that becomes a Liquidated Mortgage Loan during the related
Collection Period, the unrecovered Asset Balance thereof at the end of such
Collection Period, after giving effect to the Net Liquidation Proceeds applied
in reduction of such Asset Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not
including amounts drawn under the Policy) received in connection with the
liquidation of any Mortgage Loan or related REO, whether through trustee's sale,
foreclosure sale or otherwise.
Loan Rate: With respect to any Mortgage Loan and as of any day, the per
annum rate of interest applicable under the related Credit Line Agreement to the
calculation of interest for such day on the Asset Balance of such Mortgage Loan.
Loan Rate Cap: With respect to each Mortgage Loan, the lesser of (i)
the Lifetime Rate Cap, if any, or (ii) the applicable state usury ceiling, if
any.
Loan-to-Value Ratio: As of any date of determination with respect to
any mortgage loan, the percentage equivalent of a fraction, the numerator of
which is the outstanding principal balance of such mortgage loan as of such date
of determination and the denominator of which is Collateral Value of the related
Mortgage Property.
Lost Mortgage Note: Any Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
Managed Amortization Period: The period from the Closing
Date to and including the Distribution Date in ________ ____.
Master Servicer: ____________________________, a ________
___________ and any successor thereto and any successor
hereunder.
Maximum Principal Payment: With respect to any Distribution
Date, the Investor Fixed Allocation Percentage of the Principal
Collections for such Distribution Date.
Maximum Rate: As to any Interest Period, the Weighted Average Net Loan
Rate for the Collection Period during which such Interest Period begins
(adjusted to an effective rate reflecting accrued interest calculated on the
basis of the actual number of days in the Collection Period commencing in the
month in which such Interest Period commences and a year assumed to consist of
360 days).
Minimum Monthly Payment: With respect to any Mortgage Loan
and any month, the minimum amount required to be paid by the
related Mortgagor in that month.
Minimum Transferor Interest: With respect to any date, an amount equal
to the lesser of (a) [__%] of the Pool Balance on such date and (b) the
Transferor Principal Balance as of the Closing Date.
Moody's: Xxxxx'x Investors Service, Inc. or its successor
in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple interest in real property
securing a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: The mortgage loans, including Additional Balances with
respect thereto, that are transferred and assigned to the Trustee pursuant to
Section 2.01, together with the Related Documents, exclusive of Mortgage Loans
that are retransferred to the Depositor, the Master Servicer or the Sponsor from
time to time pursuant to Section 2.02, 2.04, 2.05, 2.06, 2.09 or 3.01 as from
time to time are held as a part of the Trust. The mortgage loans originally so
held are identified in the Mortgage Loan Schedule delivered on the Closing Date.
The Mortgage Loans shall also include any Eligible Substitute Mortgage Loan
Substituted by the Sponsor for a Defective Mortgage Loan pursuant to Sections
2.02 and 2.04.
Mortgage Loan Schedule: With respect to any date, the schedule of
Mortgage Loans included in the Trust on such date. The initial schedule of
Mortgage Loans as of the Cut-off Date is the schedule set forth herein as
Exhibit C, which schedule sets forth as to each Mortgage Loan (i) the Cut-off
Date Asset Balance, (ii) the Credit Limit, (iii) the Gross Margin, (iv) the
Lifetime Rate Cap, (v) the account number, (vi) the current Loan Rate, (vii) the
Combined Loan-to-Value Ratio, (viii) a code specifying the property type, (ix) a
code specifying documentation type and (x) a code specifying lien position. The
Mortgage Loan Schedule will be deemed to be amended from time to time to reflect
Additional Balances.
Mortgage Note: With respect to a Mortgage Loan, the Credit Line
Agreement pursuant to which the related mortgagor agrees to pay the indebtedness
evidenced thereby and secured by the related Mortgage.
Mortgaged Property: The underlying property, including any
real property and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Credit Line
Agreement.
Net Liquidation Proceeds: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any Mortgage Loan and as to any day, the
Loan Rate less the Servicing Fee Rate, the [premium Percentage,] the Trustee Fee
Rate.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor, the Transferor or the Master Servicer, or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case may
be, and delivered to the Depositor and the Trustee, as the case may be, as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee, who may be in-house counsel for the Depositor, the Sponsor, the Master
Servicer or the Transferor (except that any opinion pursuant to Sections 4.03 or
7.04 or relating to taxation must be an opinion of independent outside counsel)
and who, in the case of opinions delivered to [the Credit Enhancer or] the
Rating Agency, is reasonably acceptable to it.
Original Invested Amount: [$___________.]
Original Investor Certificate Principal Balance:
[$-----------.]
Overcollateralization Amount: At the time of reference
thereto, the amount, if any, by which the Invested Amount exceeds
the Investor Certificate Principal Balance.
Overcollateralization Step-Down Amount: With respect to any
Distribution Date, the lesser of (i) the Scheduled Principal Collections
Distribution Amount without giving effect to the proviso in the definition
thereof and (ii) the excess of the Overcollateralization Amount over the
Required Overcollateralization Amount for such Distribution Date.
Paying Agent: Any paying agent appointed pursuant to
Section 6.06.
Percentage Interest: As to any Investor Certificate, the
percentage obtained by dividing the principal denomination of
such Investor Certificate by the Original Investor Certificate
Principal Balance of such Certificate.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
[Policy: The certificate guaranty insurance policy number
________, and all endorsements thereto, dated as of the Closing
Date, issued by the Credit Enhancer to the Trustee for the
benefit of the Investor Certificateholders.]
[Policy Payments Account: As defined in Section 4.02(b).]
Pool Balance: With respect to any date, the aggregate of
the Asset Balances of all Mortgage Loans as of such date.
Pool Factor: With respect to any Distribution Date, the
percentage, carried to seven places, obtained by dividing the
Investor Certificate Principal Balance for such Distribution
Date by the Original Investor Certificate Principal Balance.
Preference Claim: As defined in Section 4.02(d).
[Premium: As defined in the Insurance Agreement.]
[Premium Percentage: As defined in the Insurance
Agreement.]
Principal Collections: As to any Distribution Date, the sum of all
payments by or on behalf of Mortgagors and any other amounts constituting
principal (including but not limited to any portion of Insurance Proceeds or Net
Liquidation Proceeds allocable to principal of the applicable Mortgage Loan, and
Transfer Deposit Amounts, but excluding Foreclosure Profits) collected by the
Master Servicer under the Mortgage Loans during the related Collection Period.
The terms of the related Credit Line Agreement shall determine the portion of
each payment in respect of a Mortgage Loan that constitutes principal or
interest.
Purchase Agreement: The Purchase Agreement, dated as of the
Cut-off Date, between [__________________________], as seller,
and the Depositor, as purchaser, with respect to the Mortgage
Loans.
[Rapid Amortization Commencement Date: The earlier of
(i) the Distribution Date in [January 2003] and (ii) the Distri-
bution Date next succeeding the Collection Period in which a
Rapid Amortization Event is deemed to occur pursuant to Section
11.01.]
[Rapid Amortization Event: As defined in Section 11.01.]
[Rapid Amortization Period: The period following the
Managed Amortization Period until the termination of the Trust
pursuant to Section 10.01.]
Rating Agency: Any statistical credit rating agency, or its successor,
that rated the Investor Certificates at the request of the Depositor at the time
of the initial issuance of the Certificates. If such agency or a successor is no
longer in existence, "Rating Agency" shall be such statistical credit rating
agency, or other comparable Person, designated by the Depositor and the Credit
Enhancer, notice of which designation shall be given to the Trustee. References
herein to the highest short-term unsecured rating category of a Rating Agency
shall mean A-1+ or better in the case of Standard & Poor's and P-1 or better in
the case of Moody's and in the case of any other Rating Agency shall mean the
ratings such other Rating Agency deems equivalent to the foregoing ratings.
References herein to the highest long-term rating category of a Rating Agency
shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case of
Moody's and in the case of any other Rating Agency, the rating such other
Rating Agency deems equivalent to the foregoing ratings.
Record Date: The last day preceding the related Distribution Date;
provided that following the date on which Definitive Certificates are available
pursuant to Section 6.02(c) the Record Date shall be the last day of the
calendar month preceding the month in which the related Distribution Date
occurs.
Reference Bank Rate: As to any Interest Period as follows: the
arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth of
a percent) of the offered rates for United States dollar deposits for one month
which are offered by the Reference Banks as of 11:00 A.M., London time, on the
second LIBOR Business Day prior to the first day of such Interest Period to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the outstanding Investor Certificate Principal Balance;
provided that at least two such Reference Banks provide such rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the arithmetic mean of
the rates quoted by one or more major banks in New York City, selected by the
Depositor after consultation with the Trustee, as of 11:00 A.M., New York City
time, on such date for loans in U.S. dollars to leading European banks for a
period of one month in amounts approximately equal to the outstanding Investor
Certificate Principal Balance. If no such quotations can be obtained, the
Reference Bank Rate shall be LIBOR applicable to the preceding Interest Period.
Reference Banks: Three major banks that are engaged in
transactions in the London interbank market, selected by the
Depositor after consultation with the Trustee.
Related Documents: As defined in Section 2.01.
REO: A Mortgaged Property that is acquired by the Trust in
foreclosure or by deed in lieu of foreclosure.
Required Amount: With respect to any Distribution Date, the
amount, if any, by which the sum of the amounts distributable
pursuant to Sections 5.01(a)(i) through 5.01(a)(iv) on such
Distribution Date exceed Investor Interest Collections for such
Distribution Date.
Required Overcollateralization Amount: As defined in the
Insurance Agreement.
Required Transferor Subordinated Amount: As defined in the
Insurance Agreement.
Responsible Officer: When used with respect to the Trustee,
any officer of the Trustee with direct responsibility for the administration
of this Agreement and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Revolving Period: With respect to each Mortgage Loan, the period
specified for such Mortgage Loan in the related Credit Line Agreement, during
which the Mortgagor is permitted to make Draws.
Rolling Six Month Delinquency Rate: As defined in the
Insurance Agreement.
SAIF: The Savings Association Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Savings Association Insurance Fund is not existing and performing
duties now assigned to it, the body performing such duties on such date.
Scheduled Principal Collections Distribution Amount: With respect to
any Distribution Date during the Managed Amortization Period and the Investor
Certificates, an amount equal to the lesser of (i) the Maximum Principal Payment
and (ii) the Alternative Principal Payment; provided that on any Distribution
Date, such amount shall be reduced by the Overcollateralization StepDown Amount
for such Distribution Date. With respect to any Distribution Date in respect of
the Rapid Amortization Period, the Maximum Principal Payment; provided that on
any Distribution Date, such amount shall be reduced by the Overcollateralization
Step-Down Amount for such Distribution Date.
Servicing Certificate: A certificate completed and executed
by a Servicing Officer in accordance with Section 4.01.
Servicing Fee: [With respect to any Distribution Date, the product of
(i) the Servicing Fee Rate divided by 12 and (ii) the aggregate Asset Balance of
the Mortgage Loans as of the first day of the Collection Period preceding such
Distribution Date (or as of the close of business on the Cut-off Date with
respect to the first Distribution Date).]
Servicing Fee Rate: [0.50%] per annum.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee (with a copy to the Credit Enhancer) by the Master Servicer on the
Closing Date, as such list may be amended from time to time.
Servicing Standard: That degree of skill and care exercised
by the Master Servicer with respect to mortgage loans comparable
to the Mortgage Loans serviced by the Master Servicer for itself
or others.
Sponsor: ____________________________, a __________________
and any successor thereto.
Standard & Poor's: Standard & Poor's Ratings Group, a
Division of The XxXxxx-Xxxx Companies, or its successor in
interest.
Subordinated Transferor Collections: With respect to any
Distribution Date, Interest Collections and Principal Collections
allocable to the Transferor Interest on such Distribution Date up
to the Available Transferor Subordinated Amount for such
Distribution Date.
Telerate Screen LIBO Page 3750: The display designated as page 3750 on
the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London inter-bank offered rates of major
banks).
Transfer Date: As defined in Section 2.06.
Transfer Deficiency: As defined in Section 2.02(a).
Transfer Deposit Amount: As defined in Section 2.02(a).
Transfer Notice Date: As defined in Section 2.06.
Transferor or Transferor Certificateholders: The Holders of
the Transferor Certificates.
Transferor Certificates: The certificates executed and
authenticated by the Trustee substantially in the form set forth
in Exhibit B hereto.
Transferor Collections: As to any period, the sum of Trans-
feror Interest Collections and Transferor Principal Collections
for such period.
Transferor Interest Collections: Interest Collections that
are not Investor Interest Collections.
Transferor Principal Balance: As of any date of determination, the
amount equal to (i) the Pool Balance as of the close of business on the day next
preceding such date of determination less (ii) the Invested Amount as of the
close of business on the preceding Distribution Date.
Transferor Principal Collections: On any Distribution Date,
Principal Collections received during the related Collection
Period minus the amount of such Principal Collections required to
be distributed to Investor Certificateholders pursuant to Section
5.01(b).
Trust: The trust created by this Agreement, the corpus of which
consists of the Mortgage Loans, related Credit Agreements such other assets as
shall from time to time be identified as deposited in the Collection Account in
accordance with this Agreement, property that secured a Mortgage Loan and that
has become REO, the interest of the Depositor in certain hazard insurance
policies maintained by the Mortgagors or the Master Servicer in respect of the
Mortgage Loans, the Policy, an assignment of the Depositor's rights under the
Purchase Agreement and all proceeds of each of the foregoing (exclusive of
payments of accrued interest on the Mortgage Loans which are due on or prior to
the Cut-off Date).
Trustee: __________________________________ or any succes-
sor Trustee appointed in accordance with this Agreement that has
accepted such appointment in accordance with this Agreement.
Trustee Fee: [A fee which is separately agreed to between
the Master Servicer and the Trustee.]
Trustee Fee Rate: The per annum rate at which the Trustee
Fee is calculated.
UCC: The Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
Unpaid Investor Certificate Interest Shortfall: With respect to any
Distribution Date, the aggregate amount, if any, of Investor Certificate
Interest that was accrued in respect of a prior Distribution Date and has not
been distributed to Investor Certificateholders.
Weighted Average Net Loan Rate: As to any Collection Period, the
average of the daily Net Loan Rate for each Mortgage Loan (assuming that each
Mortgage Loan is fully indexed) for each day during the related Billing Cycle,
weighted on the basis of the daily average of the related Asset Balances
outstanding for each day in such Billing Cycle for each Mortgage Loan as
determined by the Master Servicer in accordance with the Master Servicer's
normal servicing procedures.
Section 1.02. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Asset Balance of a Mortgage Loan shall
be made on a daily basis using a 365-day year. All calculations of interest on
the Investor Certificates shall be made on the basis of the actual number of
days in an Interest Period and a year assumed to consist of 360 days. The
calculation of the Servicing Fee shall be made on the basis of a 360-day year
consisting of twelve 30-day months. All dollar amounts calculated hereunder
shall be rounded to the nearest cent with one-half of one cent being rounded
down.
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates;
Tax Treatment
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
Fund Advances Under Credit Line Agreements. The Depositor, concurrently with the
execution and delivery of this Agreement, does hereby transfer, assign, set over
and otherwise convey to the Trust without recourse (subject to Sections 2.02 and
2.04) all of its right, title and interest in and to: (i) each Mortgage Loan,
including its Asset Balance (including all Additional Balances) and all
collections in respect thereof [received] [due] after the Cut-off Date
[(excluding payments in respect of accrued interest [due] [received] on or prior
to the Cut-off Date)]; (ii) property that secured a Mortgage Loan that is
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Depositor's
rights under the Purchase Agreement; (iv) the Depositor's rights under the
hazard insurance policies; (v) all other assets included or to be included in
the Trust for the benefit of Certificateholders and the Credit Enhancer; and
(vi) all proceeds of the foregoing; provided that neither the Trustee nor the
Trust assumes the obligation under any Credit Line Agreement that provides for
the funding of future advances to the Mortgagor thereunder, and neither the
Trust nor the Trustee shall be obligated or permitted to fund any such future
advances. Additional Balances shall be part of the related Asset Balance and are
hereby transferred to the Trust on the Closing Date pursuant to this Section
2.01, and therefore part of the Trust property. [In addition, on or prior to the
Closing Date, the Depositor shall cause the Credit Enhancer to deliver the
Policy to the Trustee for the benefit of the Investor Certificateholders.] The
foregoing transfer, assignment, set- over and conveyance to the Trust shall be
made to the Trustee, on behalf of the Trust, and each reference in this
Agreement to such transfer, assignment, set-over and conveyance shall be
construed accordingly.
The Depositor agrees to take or cause to be taken such actions and
execute such documents, including without limitation, the filing of all
necessary continuation statements for the UCC-1 financing statements filed in
the State of California (which shall have been filed within 90 days of the
Closing Date) describing the Cut-off Date Asset Balances and Additional Balances
and naming the Depositor as debtor and the Trustee as secured party and any
amendments to UCC-1 financing statements required to reflect a change in the
name or corporate structure of the Depositor or the filing of any additional
UCC-1 financing statements due to the change in the principal office of the
Depositor (within 90 days of any event necessitating such filing) as are
necessary to perfect and protect the Certificateholders' and Credit Enhancer's
interests in each Cut-off Date Asset Balance and Additional Balances and
the proceeds thereof (other than maintaining possession by the Trustee of the
Mortgage Loans and the Mortgage Files, which possession will, subject to the
terms hereof, be maintained by the Master Servicer as custodian and
bailee of the Trustee).
In connection with such transfer and assignment by the Depositor, the
Master Servicer acknowledges that it is holding as custodian and bailee for the
Trustee, the following documents or instruments (the "Related Documents") with
respect to each Mortgage Loan:
(i) (A) the original Mortgage Note endorsed in blank;
or (B) with respect to any Lost Mortgage Note, a lost not affidavit
from the Seller stating that the original Mortgage Note was lost or
destroyed together with a copy of such Note;
(ii) an original Assignment of Mortgage in blank in
recordable form;
(iii) the original recorded Mortgage or, if, in
connection with any Mortgage Loan, the original recorded Mortgage with
evidence of recording thereon cannot be delivered on or prior to the
Closing Date because of a delay caused by the public recording office
where such original Mortgage has been delivered for recordation or
because such original Mortgage has been lost, the Sponsor, at the
direction of the Depositor, shall deliver or cause to be delivered to
the Custodian, as agent for the Trustee, a true and correct copy of
such Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Depositor
stating that such original Mortgage has been dispatched to the
appropriate public recording official or (ii) in the case of an
original Mortgage that has been lost, a certificate by the appropriate
county recording office where such Mortgage is recorded;
(iv) if applicable, the original intervening
assignments, if any ("Intervening Assignments"), with evidence of
recording thereon, showing a complete chain of title to the Mortgage
from the originator to the Depositor or, if any such original
Intervening Assignment has not been returned from the applicable
recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Sponsor stating that such
original Intervening Assignment has been dispatched to the appropriate
public recording official for recordation or (ii) in the case of an
original Intervening Assignment that has been lost, a certificate by
the appropriate county recording office where such Mortgage is
recorded;
(v) either (1) for each Mortgage Loan with a Credit
Limit in excess of $[____________], a title policy or (2) for all other
Mortgage Loans, either a title policy, a title search, a limited
coverage policy or other assurance of title with respect to the related
Mortgaged Property;
(vi) the original of any guaranty executed in connection
with the Mortgage Note;
(vii) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Mortgage Loan; and
(viii) any security agreement, chattel mortgage or
equivalent instrument executed in connection with the Mortgage;
provided that as to any Mortgage Loan, if (a) as evidenced by an Opinion of
Counsel delivered to and in form and substance satisfactory to the Trustee and
the Credit Enhancer, (x) an optical image or other representation of the related
documents specified in clauses (i) through (viii) above are enforceable in the
relevant jurisdictions to the same extent as the original of such document and
(y) such optical image or other representation does not impair the ability of an
owner of such Mortgage Loan to transfer its interest in such Mortgage Loan, and
(b) the retention of such documents in such format will not result in a
reduction in the then current rating of the Investor Certificates, without
regard to the Policy, such optical image or other representation may be held by
the Master Servicer, as custodian for the Trustee or assignee in lieu of the
physical documents specified above.
The Sponsor hereby confirms to the Trustee that it has caused the
portions of the Electronic Ledgers relating to the Mortgage Loans to be clearly
and unambiguously marked, and has made the appropriate entries in its general
accounting records, to indicate that such Mortgage Loans have been transferred
to the Trust at the direction of the Depositor. The Master Servicer hereby
confirms to the Trustee that it has clearly and unambiguously made appropriate
entries in its general accounting records indicating that such Mortgage Loans
constitute part of the Trust and are serviced by it on behalf of the Trust in
accordance with the terms hereof.
Notwithstanding the characterization of the Investor Certificates as
debt for Federal, state and local income and franchise tax purposes, the parties
hereto intend to treat the transfer of the Mortgage Loans as provided herein as
a sale for accounting and other purposes, by the Depositor to the Trust of
all the Depositor's right, title and interest in and to the Mortgage Loans and
other property described above. In the event such transfer is deemed not to be a
sale as contemplated in the immediately preceding sentence, the Depositor hereby
grants to the Trust a security interest in all of the Depositor's right, title
and interest in, to and under the Mortgage Loans whether now existing or
hereafter created, all monies due or to become due on the Mortgage Loans and all
proceeds of any thereof; and this Agreement shall constitute a security
agreement under applicable law.
Except as hereinafter provided, the Master Servicer shall be entitled
to maintain possession of all of the foregoing documents and instruments and
shall not be required to deliver any of them to the Trustee. In the event,
however, that possession of any of such documents or instruments is required by
any Person (including the Trustee) acting as successor master servicer pursuant
to Section 7.04 or 8.02 in order to carry out the duties of Master Servicer
hereunder, then such successor shall be entitled to request delivery, at the
expense of the Master Servicer, of such documents or instruments by the Master
Servicer and to retain such documents or instruments for servicing purposes;
provided that the Trustee or such master servicer shall maintain such documents
at such offices as may be required by any regulatory body having jurisdiction
over such Mortgage Loans.
The Master Servicer's right to maintain possession of the documents
enumerated above shall continue so long as the long term unsecured debt of
[__________________________] is assigned ratings of at least "[____]" by
[Standard & Poor's] and "[____]" by [Xxxxx'x]. At such time as the condition
specified in the preceding sentence is not satisfied, as promptly as practicable
but in no event more than 90 days in the case of clause (i) below and 60 days in
the case of clause (ii) below following the occurrence of such event (a
"Delivery Event"), the Master Servicer shall, at its expense, (i) either (x)
record an assignment of Mortgage in favor of the Trustee (which may be a blanket
assignment if permitted by applicable law) in the appropriate real property or
other records or (y) deliver to the Trustee the assignment of such Mortgage in
favor of the Trustee in form for recordation, together with an Opinion of
Counsel addressed to the Trustee [and the Credit Enhancer] to the effect that
recording is not required to protect the Trustee's right, title and interest in
and to the related Mortgage Loan or, in case a court should recharacterize the
sale of the Mortgage Loans as a financing, to perfect a first priority security
interest in favor of the Trustee in the related Mortgage Loan, which Opinion of
Counsel also shall be reasonably acceptable to each of the Rating Agencies (as
evidenced in writing) and the Credit Enhancer, and (ii) unless an Opinion of
Counsel, reasonably acceptable to the Trustee, the Rating Agencies (as evidenced
in writing) and the Credit Enhancer, is delivered to the Trustee [and the Credit
Enhancer] to the effect that delivery of the Mortgage Files is not necessary
to protect the Trustee's right, title and interest in the related Mortgage
Loans; provided that the lack of delivery will not result in a reduction
in the then current rating of the Investor Certificates, without regard
to the Policy, deliver the related Mortgage Files to the Trustee or to a
custodian located in the State of California appointed by the Trustee and
acceptable to the Rating Agencies [and the Credit Enhancer] to be held by
the Custodian on behalf of the Trustee in trust, upon the terms herein
set forth, for the use and benefit of all present and future
Certificateholders and the Custodian on behalf of the Trustee shall retain
possession thereof except to the extent the Master Servicer requires any
Mortgage Files for normal servicing as contemplated by Section 3.07. The Trustee
is hereby appointed as the attorney-in-fact of the Master Servicer with the
power to prepare, execute and record Assignments of Mortgages in the event that
the Master Servicer fails to do so on a timely basis as provided in this
paragraph.
Within 90 days following delivery, if any, of the Mortgage Files to the
Trustee pursuant to the preceding paragraph, the Trustee shall review each such
Mortgage File to ascertain that all required documents set forth in this Section
2.01 have been executed and received, and that such documents relate to the
Mortgage Loans identified on the Mortgage Loan Schedule and in so doing the
Trustee may rely on the purported due execution and genuineness of any signature
thereon. If within such 90-day period the Trustee finds any document
constituting a part of a Mortgage File not to have been executed or received or
to be unrelated to the Mortgage Loans identified in said Mortgage Loan Schedule
or, if in the course of its review, the Trustee determines that such Mortgage
File is otherwise defective in any material respect, the Trustee shall promptly
upon the conclusion of its review notify the Sponsor, the Depositor and the
Credit Enhancer, and the Sponsor shall have a period of 90 days after such
notice within which to correct or cure any such defect; provided that the
Sponsor shall not be obligated to correct or cure any such defect if such defect
constitutes fraud in the origination of the related Mortgage Loan and the
Sponsor did not, at the time of origination or on the Closing Date, have actual
knowledge of such fraud.
The Trustee shall have no responsibility for reviewing any Mortgage
File except as expressly provided in this Section 2.01. In reviewing any
Mortgage File pursuant to this Section, the Trustee shall have no responsibility
for determining whether any document is valid and binding, whether the text of
any assignment or endorsement is in proper or recordable form (except, if
applicable, to determine if the Trustee is the assignee or endorsee), whether
any document has been recorded in accordance with the requirements of any
applicable jurisdiction, or whether a blanket assignment is permitted in any
applicable jurisdiction, whether any Person executing any document is authorized
to do so or whether any signature thereon is genuine, but shall only be
required to determine whether a document has been executed, that it appears to
be what it purports to be, and, where applicable, that it purports to be
recorded.
Section 2.02. Acceptance by Trustee; Retransfer of Mortgage Loans. (a)
The Trustee hereby acknowledges its receipt of the Policy and the Mortgage
Loans, and declares that the Trustee holds and will hold such instrument, and to
the extent that any documents are delivered to it pursuant to Section 2.01, will
hold such documents, and all amounts received by it thereunder and hereunder, in
trust, upon the terms herein set forth, for the use and benefit of all present
and future Certificateholders and the Credit Enhancer. If (x) the time to cure
any defect in respect of any Mortgage Loan of which the Trustee has notified the
Sponsor and the Depositor following the review pursuant to Section 2.01 has
expired in respect of any Mortgage Loan as a result of a material defect in any
document constituting a part of its Mortgage File or (y) the time to cure any
defect in respect of any Mortgage Loan of which the Trustee has notified the
Sponsor and the Depositor following the review pursuant to Section 2.01 has
expired or if at any time any loss is suffered by the Trustee on behalf of the
Certificateholders or the Credit Enhancer, in respect of any Mortgage Loan as a
result of an Assignment of Mortgage to the Trustee not having been recorded as
required by Section 2.01, then on the next succeeding Business Day upon the
deposit to the Collection Account of the Transfer Deposit Amount, if any, and
upon satisfaction of the applicable conditions described herein, all right,
title and interest of the Trust in and to such Mortgage Loan shall be deemed to
be retransferred, reassigned and otherwise reconveyed, without recourse,
representation or warranty, to the Sponsor on such Business Day and the Asset
Balance of such Mortgage Loan shall be deducted from the Pool Balance; provided
that interest accrued on the Asset Balance of such Mortgage Loan to the [end of
the related Collection Period] [Due Date occurring in the calendar month
immediately following the calendar month in which such repurchase occurs] shall
be the property of the Trust; provided further that, for purposes of clause (x)
of this sentence, the Sponsor shall not be obligated to make such retransfer and
repurchase if such defect or omission constitutes fraud in the origination of
the related Mortgage Loan and the Sponsor did not, at the time of such
origination or on the Closing Date, have actual knowledge of such fraud. The
Trustee shall determine if the reduction of such Asset Balance from the Pool
Balance in accordance with the preceding sentence would cause the Transferor
Principal Balance to be less than the Minimum Transferor Interest ("Transfer
Deficiency"), in which event the Trustee shall deliver written notice of such
deficiency to the Sponsor, and within five Business Days after the Business Day
of such retransfer the Sponsor shall either (i) substitute an Eligible
Substitute Mortgage Loan or (ii) deposit into the Collection Account an amount
(the "Transfer Deposit Amount") in immediately available funds equal to the
Transfer Deficiency[, or a combination of both (i) and (ii) above]. Such
reduction or substitution and the actual payment of any Transfer Deposit
Amount, if any, shall be deemed to be payment in full for such Mortgage Loan.
Upon receipt of any Eligible Substitute Mortgage Loan or of written
notification signed by a Servicing Officer to the effect that the
Transfer Deposit Amount in respect of a Defective Mortgage Loan has been
deposited into the Collection Account or, if the Transferor Principal Balance is
not reduced below the Minimum Transferor Interest as a result of the deemed
retransfer of a Defective Mortgage Loan, then as promptly as practicable
following such deemed transfer, the Trustee shall execute such documents and
instruments of transfer presented by the Sponsor, in each case without recourse,
representation or warranty, and take such other actions as shall reasonably be
requested by the Sponsor to effect such transfer by the Trust of such Defective
Mortgage Loan pursuant to this Section. It is understood and agreed that the
obligation of the Sponsor to so accept a transfer of such a Defective Mortgage
Loan and to either convey an Eligible Substitute Mortgage Loan or to make a
deposit of any related Transfer Deposit Amount into the Collection Account shall
constitute the sole remedy available to Certificateholders and the Trustee [and
the Credit Enhancer] against the Sponsor with respect to all defects and
omissions in respect of the Mortgage Files.
The Master Servicer, promptly following the transfer of a Defective
Mortgage Loan from or to the Trust pursuant to this Section, shall amend the
Mortgage Loan Schedule and make appropriate entries in its general account
records to reflect such transfer. The Master Servicer shall, following such
retransfer, appropriately xxxx its records to indicate that it is no longer
servicing such Mortgage Loan on behalf of the Trust. The Sponsor, promptly
following such transfer, shall appropriately xxxx its Electronic Ledger and make
appropriate entries in its general account records to reflect such transfer.
Notwithstanding any other provision of this Section, a retransfer of a
Defective Mortgage Loan to the Sponsor pursuant to this Section that would cause
the Transferor Principal Balance to be less than the Minimum Transferor Interest
shall not occur if either the Sponsor fails to convey an Eligible Substitute
Mortgage Loan or to deposit into the Collection Account any related Transfer
Deposit Amount required by this Section with respect to the transfer of such
Defective Mortgage Loan.
(b) As to any Eligible Substitute Mortgage Loan or Loans, the Sponsor
shall, if a Delivery Event has occurred, deliver to the Trustee with respect to
such Eligible Substitute Mortgage Loan or Loans such documents and agreements as
are required to be held by the Trustee in accordance with Section 2.01. For any
Collection Period during which the Sponsor substitutes one or more Eligible
Substitute Mortgage Loans, the Master Servicer shall determine the Transfer
Deposit Amount which amount shall be deposited by the Sponsor in the Collection
Account at the time of substitution. All amounts received in respect of the
Eligible Substitute Mortgage Loan or Loans during the Collection Period in
which the circumstances giving rise to such substitution occur shall not
be a part of the Trust and shall not be deposited by the Master Servicer
in the Collection Account. All amounts received by the Master Servicer during
the Collection Period in which the circumstances giving rise to such
substitution occur in respect of any Defective Mortgage Loan so removed by
the Trust shall be deposited by the Master Servicer in the Collection
Account. Upon such substitution, the Eligible Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects,
and the Sponsor shall be deemed to have made with respect to such Eligible
Substitute Mortgage Loan or Loans, as of the date of substitution, the
covenants, representations and warranties set forth in Section 2.04. The
procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Trustee, the
Certificateholders and the Credit Enhancer.
Section 2.03. Representations and Warranties Regarding the Master
Servicer. The Master Servicer represents and warrants to the Trustee [and the
Credit Enhancer] that as of the Closing Date:
(i) The Master Servicer is a ________ corporation,
validly existing and in good standing under the laws of the State of
________, and has the corporate power to own its assets and to transact
the business in which it is currently engaged. The Master Servicer is
duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business
transacted by it or any properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets, or
condition (financial or other) of the Master Servicer;
(ii) The Master Servicer has the power and authority to
make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of
the Master Servicer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Master Servicer is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization,
or registration or declaration, as shall have been obtained or filed,
as the case may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this
Agreement by the Master Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court
applicable to the Master Servicer or any provision of the Certificate
of Incorporation or Bylaws of the Master Servicer, or constitute a
material breach of any mortgage, indenture, contract or other agreement
to which the Master Servicer is a party or by which the Master Servicer
may be bound; and
(v) No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending,
or to the knowledge of the Master Servicer threatened, against the
Master Servicer or any of its properties or with respect to this
Agreement or the Certificates which in the opinion of the Master
Servicer has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Agreement.
The representations and warranties set forth in this Section shall survive the
sale and assignment of the Mortgage Loans to the Trust. Upon discovery of a
breach of any representations and warranties which materially and adversely
affects the interests of the Certificateholders or the Credit Enhancer, the
person discovering such breach shall give prompt written notice to the other
parties and to the Credit Enhancer. Within 90 days of its discovery or its
receipt of notice of breach, or, with the prior written consent of a Responsible
Officer of the Trustee, such longer period specified in such consent, the Master
Servicer shall cure such breach in all material respects.
Section 2.04. Representations and Warranties of the Sponsor
Regarding the Mortgage Loans; Retransfer of Certain Mortgage
Loans. (a) The Sponsor hereby represents and warrants to the
Trustee [and the Credit Enhancer] that as of the Cut-off Date,
unless otherwise specifically set forth herein:
(i) As of the Closing Date, this Agreement constitutes a
legal, valid and binding obligation of the Sponsor, enforceable against
the Sponsor in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect affecting
the enforcement of creditors' rights generally and by the availability
of equitable remedies;
(ii) As of the Closing Date with respect to the Mortgage Loans
and as of the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, either (A) the Purchase Agreement constitutes
a valid transfer and assignment to the Depositor of all right, title
and interest of the Sponsor in and to the Cut-off Date Asset Balances
with respect to the applicable Mortgage Loans, all monies due or to
become due with respect thereto (excluding payments in respect of
accrued interest [due] on or prior to the Cut-off Date [or due in the
month of]), and all proceeds of such Cut-off Date Asset Balances with
respect to the Mortgage Loans and such funds as are from time to time
deposited in the Collection Account (excluding any investment earnings
thereon) and all other property specified in the definition of "Asset"
as being part of the corpus of the Trust conveyed to the Trust by the
Sponsor, and upon payment for the Additional Balances, will constitute
a valid transfer and assignment to the Trustee of all right, title and
interest of the Sponsor in and to the Additional Balances, all monies
due or to become due with respect thereto, and all proceeds of such
Additional Balances and all other property specified in the definition
of "Asset" relating to the Additional Balances or (B) the Purchase
Agreement or this Agreement, as appropriate, constitutes a grant of a
security interest (as defined in the UCC as in effect in California) in
such property to the Trustee on behalf of the Trust. If this Agreement
constitutes the grant of a security interest to the Trust in such
property, and if the Trustee obtains and maintains possession of the
Mortgage File for each Mortgage Loan, the Trust shall have a first
priority perfected security interest in such property, subject to the
effect of Section 9-306 of the UCC with respect to collections on the
Mortgage Loans that are deposited in the Collection Account in
accordance with the next to last paragraph of Section 3.02(b); provided
that nothing in this clause (ii) shall be construed to obligate the
Master Servicer to deliver any Mortgage Files other than as set forth
in Section 2.01 hereof;
[(iii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan and as of the date any Additional Balance is
created, the information set forth in the Mortgage Loan Schedule for
such Mortgage Loans is true and correct in all material respects;]
(iv) The applicable Cut-off Date Asset Balance has not been
assigned or pledged, and the Sponsor is the sole owner and holder of
such Cut-off Date Asset Balance free and clear of any and all liens,
claims, encumbrances, participation interests, equities, pledges,
charges or security interests of any nature, and has full right and
authority, under all governmental and regulatory bodies having
jurisdiction over the ownership of the applicable Mortgage Loan,
to sell, assign or transfer the same pursuant to the Purchase
Agreement;
(v) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage Note and the Mortgage
with respect to each Mortgage Loan have not been assigned or pledged,
and immediately prior to the sale of the Mortgage Loans to the
Depositor, the Sponsor [was] [is] the sole owner and holder of the
Mortgage Loan free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature, and has full right and authority,
under all governmental and regulatory bodies having jurisdiction over
the ownership of the applicable Mortgage Loans, to sell and assign the
same pursuant to the Purchase Agreement;
(vi) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, the related Mortgage is a valid and
subsisting first or second lien, as set forth on the Mortgage Loan
Schedule with respect to each related Mortgage Loan, on the property
therein described, and as of the Cut-off Date the related Mortgaged
Property is free and clear of all encumbrances and liens having
priority over the first or second lien, as applicable, of such Mortgage
except for liens for (i) real estate taxes and special assessments not
yet delinquent and liens or interests arising under or as a result of
any federal, state or local law, regulation or ordinance relating to
hazardous wastes or hazardous substances and, if the related Mortgaged
Property is a unit in a condominium project or planned unit
development, any lien for common charges permitted by statute or
homeowner association fees; (ii) any first mortgage loan secured by
such Mortgaged Property and specified on the Mortgage Loan Schedule;
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording that are
acceptable to mortgage lending institutions in the area wherein the
related Mortgaged Property is located or specifically reflected in the
appraisal made in connection with the origination of the related
Mortgage Loan; and (iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of
the security intended to be provided by such Mortgage;
(vii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to
any Eligible Substitute Mortgage Loan, there is no valid offset,
defense or counterclaim of any obligor under any Credit Line Agreement
or Mortgage;
(viii) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Mortgage Loans and the applicable Transfer
Date with respect to any Eligible Substitute Mortgage Loan, there is no
delinquent recording or other tax or fee or assessment lien against any
related Mortgaged Property;
(ix) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, there is no proceeding pending or, to the
best knowledge of the Sponsor, threatened for the total or partial
condemnation of the related Mortgaged Property, and no such property
has been materially damaged by water, fire, earthquake, windstorm,
flood, tornado or similar casualty (excluding casualty from the
presence of hazardous wastes or hazardous substances, as to which the
Seller makes no representations) so as to affect adversely the value of
the related Mortgaged Property as security for such Mortgage Loan;
(x) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Mortgage Loans and the applicable Transfer
Date with respect to any Eligible Substitute Mortgage Loan, there are
no mechanics' or similar liens or claims which have been filed for
work, labor or material affecting the related Mortgaged Property which
are, or may be, liens prior or equal to the lien of the related
Mortgage, except liens which are fully insured against by the title
insurance policy referred to in clause (xiv);
(xi) No Minimum Monthly Payment is more than 59 days
delinquent (measured on a contractual basis) and with respect to the
Mortgage Loans no more than 0.0% (by Cut-off Date Pool Balance) were
30-59 days delinquent (measured on a contractual basis) and no more
that [___]% (by Cut-off Date Pool Balance) were 60-89 days delinquent
(measured on a contractual basis);
(xii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, for each Mortgage Loan, the related Mortgage
File contains each of the documents and instruments specified to be
included therein;
(xiii) The related Mortgage Note and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the Mortgage Loan;
(xiv) Either a lender's title insurance policy or binder was
issued on the date of origination of the Mortgage Loan and each such
policy is valid and remains in full force and effect, or a title search
or guaranty of title customary in the relevant jurisdiction was
obtained with respect to a Mortgage Loan as to which no title insurance
policy or binder was issued;
[(xv) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, none of the Mortgaged Properties is a mobile
home or manufactured housing unit that is not considered or classified
as part of the real estate under the laws of the jurisdiction in which
it is located;]
[(xvi) As of the Cut-off Date for the Mortgage Loans no more
than [___]% of the Mortgage Loans, by aggregate principal balance, are
secured by Mortgaged Properties located in one United States postal
five-digit zip code;]
[(xvii) The Combined Lone to Value Ratio for each
Mortgage Loan was not in excess of [___]%;]
(xviii) No selection procedure reasonably believed by the
Sponsor to be adverse to the interests of the Certifi- cateholders [or
the Credit Enhancer] was utilized in selecting the Mortgage Loans;
(xix) The Sponsor has not transferred the Mortgage Loans to
the Trust with any intent to hinder, delay or defraud any of its
creditors;
(xx) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate
on the average daily Asset Balance during the interest period relating
to the date on which such Minimum Monthly Payment is due;
(xxi) Within 90 days of the Closing Date with respect to the
Mortgage Loans and, to the extent not already included in such filing
with respect to the Mortgage Loans, the applicable Transfer Date with
respect to any Eligible Substitute Mortgage Loan, the Sponsor will file
UCC-1 financing statements with respect to the Mortgage Loans;
(xxii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, each Credit Line Agreement and each Mortgage
Loan is an enforceable obligation of the related Mortgagor, except as
the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, the Sponsor has not received a notice of
default of any senior mortgage loan related to a Mortgaged Property
that has not been cured by a party other than the Master Servicer;
(xxiv) The definition of "Prime Rate" in each Credit Line
Agreement relating to a Mortgage Loan does not differ materially from
the definition in the form of Credit Line Agreement in Exhibit D;
[(xxv) The weighted average remaining term to maturity of the
Mortgage Loans (on a contractual basis) as of the Cut-off Date [for the
Mortgage Loans] is approximately [___] months. One each date that the
Loan Rates have been adjusted, interest rate adjustments on the
Mortgage Loans were made in compliance with the related Mortgage and
the related Mortgage Note and applicable law. Over the term of each
Mortgage Loan, the Loan Rate may not exceed the related Loan Rate Cap,
if any. The Loan Rate Caps range between [___]% and [___]%. The Loan
Rates on the Mortgage Loans range between [___]% and [__]% and the
weighted average Loan Rate is approximately [__]%.]
(xxvi) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, each Mortgaged Property consists of a single
parcel of real property with a one-to-four unit single family residence
erected thereon, or an individual condominium unit, planned unit
development unit or townhouse;
(xxvii) No more than [___]% (by Cut-off Date Pool Balance) of
the Mortgage Loans are secured by real property improved by individual
condominium units, planned unit development units, townhouses or
two-to-four family residences erected thereon, and at least [___]% (by
Cut-off Date Pool Balance) of the Mortgage Loans are secured by real
property with a detached one-family residence erected thereon;
(xxviii) The Credit Limits on the Mortgage Loans range between
$[____________] and $[___________] with an average of approximately
$[_______]. As of the Cut-off Date for the Mortgage Loans, no Mortgage
Loan had a principal balance in excess of approximately
$[_______________] and the average principal balance of the Mortgage
Loans is equal to approximately $[_______]; and
(xxix) Approximately [__]% and [___]% of the Mortgage Loans,
by aggregate principal balance as of the Cut-off Date for the Mortgage
Loans, are first and second liens, respectively.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the respective Mortgage
Files to the Trustee pursuant to Section 2.01 and the termination of the rights
and obligations of the Master Servicer pursuant to Section 7.04 or 8.02. Upon
discovery by the Sponsor, the Depositor, the Master Servicer[, the Credit
Enhancer] or a Responsible Officer of the Trustee of a breach of any of the
foregoing representations and warranties, that materially and adversely affects
the interests of the Investor Certificateholders [or the Credit Enhancer] in the
related Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties and the Credit Enhancer. Within 90 days of
its discovery or its receipt of notice of such breach, the Sponsor shall use all
reasonable efforts to cure such breach in all material respects or shall, not
later than the Business Day next preceding the Distribution Date in the month
following the Collection Period in which any such cure period expired (or such
later date that is acceptable to the Trustee [and the Credit Enhancer] as
evidenced by its written consents), either (a) accept a transfer of such
Mortgage Loan from the Trust or (b) substitute an Eligible Substitute Mortgage
Loan in the same manner and subject to the same conditions as set forth in
Section 2.02; provided that the cure for any breach of a representation and
warranty relating to the characteristics of the Mortgage Loans in the aggregate
shall be a repurchase of or substitution for only the Mortgage Loans necessary
to cause such characteristics to be in compliance with the related
representation and warranty; and provided further that, anything to the contrary
herein notwithstanding, Seller shall have no obligation to cure any such breach
or to repurchase or substitute for such affected Mortgage Loan if the substance
of such breach constitutes fraud in the origination of such affected Mortgage
Loan and the Seller, at the time of such origination and on the Closing Date,
did not have actual knowledge of such fraud. Upon accepting such transfer and
making any required deposit into the Collection Account or substitution of an
Eligible Substitute Mortgage Loan, as the case may be, the Sponsor shall be
entitled to receive an instrument of assignment or transfer from the Trustee to
the same extent as set forth in Section 2.02 with respect to the transfer of
Mortgage Loans under that Section.
It is understood and agreed that the obligation of the Sponsor to so
accept a transfer of a Mortgage Loan as to which such a breach has occurred and
is continuing and to so make any required deposit in the Collection Account or
to substitute an Eligible Substitute Mortgage Loan, as the case may be, shall
constitute the sole remedy available to Investor Certificate- holders, the
Trustee on behalf of Investor Certificateholders [and the Credit Enhancer]
against the Sponsor respecting any breach of representations and
warranties in respect of the Mortgage Loans[; provided that the Sponsor shall
defend and indemnify the Trustee[, the Credit Enhancer] and the Investor
Certificateholders against all reasonable costs and expenses, and all losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel and the amount of any settlement entered into with the consent of
the Sponsor (such consent not to be unreasonably withheld), which may
be asserted against or incurred by any of them as a result of any third-party
action arising out of any breach of any such representation and warranty.]
Section 2.05. Covenants of the Depositor. The Depositor
hereby covenants that:
(a) Security Interests. Except for the transfer hereunder, the
Depositor will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on any Mortgage Loan,
whether now existing or hereafter created, or any interest therein; the
Depositor will notify the Trustee of the existence of any Lien on any Mortgage
Loan immediately upon discovery thereof; and the Depositor will defend the
right, title and interest of the Trust in, to and under the Mortgage Loans,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Depositor; provided that nothing in this Section
2.05(a) shall prevent or be deemed to prohibit the Depositor from suffering to
exist upon any of the Mortgage Loans any Liens for municipal or other local
taxes and other governmental charges if such taxes or governmental charges shall
not at the time be due and payable or if the Depositor shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
(b) Negative Pledge. The Depositor hereby agrees not to transfer,
assign, exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Transferor Certificates except in accordance with Sections
6.05 and 7.02.
(c) Additional Indebtedness. So long as the Investor Certificates are
outstanding the Depositor will not incur any debt other than debt that (i) is
non-recourse to the assets of the Depositor other than the Mortgage Loans
specifically pledged as security for such debt, or (ii) is subordinated in right
of payment to the rights of the Investor Certificateholders or (iii) is assigned
a rating by each of the Rating Agencies that is the same as the then current
rating of the Investor Certificates.
(d) Downgrading. The Depositor will not engage in any activity which
would result in a downgrading of the Investor Certificates.
(e) Amendment to Certificate of Incorporation. The Depositor will not
amend its Certificate of Incorporation without prior written notice to the
Rating Agencies and the Credit Enhancer.
(f) Principal Place of Business. The Depositor's principal place of
business is in California and it will not change its principal place of business
without prior written notice to the Rating Agencies.
Section 2.06. Transfers of Mortgage Loans at Election of Transferor.
Subject to the conditions set forth below, the Transferor may, but shall not be
obligated to, require the transfer of Mortgage Loans from the Trust to the
Transferor as of the close of business on a Distribution Date (the "Transfer
Date"). On the fifth Business Day (the "Transfer Notice Date") prior to the
Transfer Date designated in such notice, the Trans- feror shall give the Trustee
and the Master Servicer a notice of the proposed transfer that contains a list
of the Mortgage Loans to be transferred. Such transfers of Mortgage Loans shall
be permitted upon satisfaction of the following conditions:
(i) No Rapid Amortization Event has occurred;
(ii) On the Transfer Notice Date the Transferor
Principal Balance (after giving effect to the removal from the Trust of
the Mortgage Loans proposed to be transferred) exceeds the Minimum
Transferor Interest;
(iii) The transfer of any Mortgage Loans on any Transfer
Date during the Managed Amortization Period shall not, in the
reasonable belief of the Transferor, cause a Rapid Amortization Event
to occur or an event which with notice or lapse of time or both would
constitute a Rapid
Amortization Event;
(iv) On or before the Transfer Date, the Transferor
shall have delivered to the Trustee a revised Mortgage Loan Schedule,
reflecting the proposed transfer and the Transfer Date, and the Master
Servicer shall have marked the Electronic Ledger to show that the
Mortgages Loans transferred to the Transferor are no longer owned by
the Trust;
(v) The Transferor shall represent and warrant that no
selection procedures reasonably believed by the Trans- feror to be
adverse to the interests of the Investor Certif- icateholders [or the
Credit Enhancer] were utilized in selecting the Mortgage Loans to be
removed from the Trust;
(vi) In connection with the first transfer of Mortgage
Loans pursuant to this Section, each Rating Agency [and the Credit
Enhancer] shall have received on or prior to the related Transfer
Notice Date notice of such proposed transfer of Mortgage Loans and,
prior to the Transfer Date, shall have notified the Trustee [and
the Credit Enhancer] in writing that such transfer of Mortgage Loans
would not result in a reduction or withdrawal of its then current
rating of the Investor Certificates without regard to the Policy;
(vii) The Transferor shall have delivered to the Trustee
[and the Credit Enhancer] an Officer's Certificate certifying that the
items set forth in subparagraphs (i) through (vi), inclusive, have been
performed or are true and correct, as the case may be. The Trustee may
conclusively rely on such Officer's Certificate, shall have no duty to
make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying.
Upon receiving the requisite information from the Transferor, the Master
Servicer shall perform in a timely manner those acts required of it, as
specified above. Upon satisfaction of the above conditions, on the Transfer Date
the Trustee shall deliver, or cause to be delivered, to the Transferor the
Mortgage File for each Mortgage Loan being so transferred, and the Trustee shall
execute and deliver to the Transferor such other documents prepared by the
Transferor as shall be reasonably necessary to transfer such Mortgage Loans to
the Transferor. Any such transfer of the Trust's right, title and interest in
and to Mortgage Loans shall be without recourse, representation or warranty by
or of the Trustee or the Trust to the Transferor.
Section 2.07. Execution and Authentication of Certificates. The
Trustee, on behalf of the Trust, has caused to be executed, authenticated and
delivered to or upon the order of the Depositor, in exchange for the Trust,
concurrently with the sale, assignment and conveyance to the Trustee of the
Trust, Investor Certificates in authorized denominations and the Transferor
Certificates, together evidencing the ownership of the entire Trust.
Section 2.08. Tax Treatment. It is the intention of the Depositor, the
Transferor and the Investor Certificateholders that the Investor Certificates
will be indebtedness of the Trans- feror for federal, state and local income and
franchise tax purposes and for purposes of any other tax imposed on or measured
by income. The Transferor, the Depositor, the Trustee and each Investor
Certificateholder (or Certificate Owner) by acceptance of its Investor
Certificate (or, in the case of a Certificate Owner, by virtue of such
Certificate Owner's acquisition of a beneficial interest therein) agrees to
treat the Investor Certificates (or beneficial interest therein), for purposes
of federal, state and local income or franchise taxes and any other tax imposed
on or measured by income, as indebtedness of the Trans- feror secured by the
assets of the Trust and to report the transactions contemplated by this
Agreement on all applicable tax returns in a manner consistent with
such treatment. Each Investor Certificateholder agrees that it will cause
any Certificate Owner acquiring an interest in an Investor Certificate through
it to comply with this Agreement as to treatment of the Investor Certificates as
indebtedness for federal, state and local income and franchise tax purposes
and for purposes of any other tax imposed on or measured by income. The
Trustee will prepare and file all tax reports required hereunder.
Section 2.09. Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trustee on behalf of the
Certificateholders [and the Credit Enhancer] 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 enforce- ability 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 of each Mortgage Loan, the Depositor was the
sole beneficial owner of each Mortgage Loan (insofar as such title was
conveyed to it by the Sponsor) 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; and
(iv) The Depositor has not transferred the Mortgage
Loans to the Trustee with any intent to hinder, delay or defraud any of
its creditors.
ARTICLE III
Administration and Servicing
of Mortgage Loans
Section 3.01. The Master Servicer. (a) The Master Servicer shall
service and administer the Mortgage Loans in a manner consistent with the terms
of this Agreement and the Servicing Standard and shall have full power and
authority, acting alone or through a subservicer, to do any and all things in
connection with such servicing and administration which it may deem necessary or
desirable, it being understood, however, that the Master Servicer shall at all
times remain responsible to the Trustee and the Certificateholders [and the
Credit Enhancer] for the performance of its duties and obligations hereunder in
accordance with the terms hereof. Any amounts received by any subservicer in
respect of a Mortgage Loan shall be deemed to have been received by the Master
Servicer whether or not actually received by it. Without limiting the generality
of the foregoing, the Master Servicer shall continue, and is hereby authorized
and empowered by the Trustee, to execute and deliver, on behalf of itself, the
Certificateholders and the Trustee, or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. The Trustee shall, upon the written request
of a Servicing Officer, furnish the Master Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Master Servicer to
carry out its servicing and administrative duties hereunder. The Master Servicer
in such capacity may also consent to the placing of a lien senior to that of any
Mortgage on the related Mortgaged Property, provided that (i) the new senior
lien secures a mortgage loan that refinances an existing first mortgage loan and
(ii) the Loan-to-Value Ratio of the new mortgage loan (without taking into
account any closing costs that may be financed by such new mortgage loan) is
equal to or less than the Loan-to- Value Ratio of the first mortgage loan to be
replaced measured as of the Cut-off Date; provided that the aggregate Asset
Balance of such Mortgage Loans with respect to which the senior lien may be so
modified shall not exceed 10% of the Cut-off Date Pool Balance (such 10% herein
referred to as the "Increased Senior Lien Limitation").
[The Master Servicer may also, without prior approval from the Rating
Agencies [or the Credit Enhancer], increase the Credit Limits on Mortgage Loans
provided that (i) new appraisals are obtained and the Combined Loan-to-Value
Ratios of the Mortgage Loans after giving effect to such increase are less than
or equal to the Combined Loan-to-Value Ratios or the Mortgage Loans as of the
Cut-off Date and (ii) such increases are consistent with the Master Servicer's
underwriting policies. In addition, the Master Servicer may (i) increase the
Credit Limits on Mortgage Loans having aggregate Asset Balances of up to
[___]% of the Cut-off Date Pool Balance, provided that (x) the increase in
the Credit Limit of a Mortgage Loan does not cause the Combined Loan-to- Value
Ratio of such Mortgage Loan to exceed [__]%, (y) the increase in the Credit
Limit of a Mortgage Loan does not cause the Combined Loan-to-Value Ratio of
such Mortgage Loan to increase by more than [__]% (for example, a Combined
Loan-to- Value Ratio of [__]% can be increased to [__]%, a Combined Loan-to-
Value Ratio of [__]% can be increased to [__]%, and so forth) and (z) the
increase is consistent with the Master Servicer's underwriting
policies and (ii) increase the Credit Limits on the Mortgage Loans having
aggregate Asset Balances of up to an additional [__]% of the Cut-off Date Pool
Balance, provided that (x) the increase in the Credit Limit of a Mortgage Loan
does not cause the Combined Loan-to-Value Ratio of such Mortgage Loan to exceed
[__]%, (y) the increase in the Credit Limit of a Mortgage Loan does not cause
the Combined Loan-to-Value Ratio of such Mortgage Loan to increase by more than
[__]% (for example, a Combined Loan-to-Value Ratio of [__]% can be increased to
[__]%, a Combined Loan-to-Value Ratio of [__]% can be increased to [__]%, and so
forth) and (z) the increase is consistent with the Master Servicer's
underwriting policies.]
[Furthermore, the Master Servicer may, without prior approval from the
Rating Agencies [and the Credit Enhancer] solicit Mortgagors for a reduction in
Loan Rates; provided that the Master Servicer can only reduce such Loan Rates on
up to 10% of the Mortgage Loans by Cut-off Date Pool Balance. Any such
solicitations shall not result in a reduction in the weighted average Gross
Margin of the Mortgage Loans in the pool by more than [__] basis points taking
into account any such prior reductions.]
In addition, the Master Servicer may agree to changes in the terms of a
Mortgage Loan at the request of the Mortgagor provided that such changes (i) do
not materially and adversely affect the interests of Certificateholders [or the
Credit Enhancer] and (ii) are consistent with prudent and customary business
practice as evidenced by a certificate signed by a Servicing Officer delivered
to the Trustee and the Credit Enhancer.
[In addition to the foregoing, the Master Servicer may solicit
Mortgagors to change any other terms of the related Mortgage Loans, provided
that such changes (i) do not materially and adversely affect the interest of
Certificateholders [or the Credit Enhancer] and (ii) are consistent with the
Servicing Standard. Nothing herein shall limit the right of the Master Servicer
to solicit Mortgagors with respect to new loans (including mortgage loans) that
are not Mortgage Loans.]
The relationship of the Master Servicer (and of any successor to the
Master Servicer as master servicer under this Agreement) to the Trustee under
this Agreement is intended by the parties to be that of an independent
contractor and not that of a joint venturer, partner or agent.
(b) In the event that the rights, duties and obligations of the Master
Servicer are terminated hereunder, any successor to the Master Servicer in its
sole discretion may, to the extent permitted by applicable law, terminate the
existing subservicer arrangements with any subservicer or assume the terminated
Master Servicer's rights under such subservicing arrangements which termination
or assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments. (a) In
accordance with and to the extent of the Servicing Standard, the Master Servicer
shall make reasonable efforts in accordance with the customary and usual
standards of practice of prudent mortgage servicers to collect all payments
called for under the terms and provisions of the Mortgage Loans to the extent
such procedures shall be consistent with this Agreement. Consistent with the
foregoing, and without limiting the generality of the foregoing, the Master
Servicer may in its discretion (i) waive any late payment charge or any
assumption fees or other fees which may be collected in the ordinary course of
servicing such Mortgage Loan and (ii) arrange with a Mortgagor a schedule for
the payment of interest due and unpaid; provided that such arrangement is
consistent with the Master Servicer's policies with respect to the mortgage
loans it owns or services; provided further that notwithstanding such
arrangement such Mortgage Loans will be included in the information regarding
delinquent Mortgage Loans set forth in the Servicing Certificate and monthly
statement to Certificateholders pursuant to Section 5.03.
(b) The Master Servicer shall establish and maintain a trust account
(the "Collection Account") titled "___________ ______________________, as
Trustee, in trust for the registered holders of Home Equity Loan Asset Backed
Certificates, Series 199_-_." The Collection Account shall be an Eligible
Account. The Master Servicer shall [(i) on the Business Day immediately
preceding each of the first three Distribution Dates, deposit in the Collection
Account any shortfall in the amount required to pay the Investor Certificate
Interest on such Distribution Dates resulting solely from the failure of certain
Mortgage Loans to be fully indexed and (ii) on the Business Day immediately
preceding the first Distribution Date, deposit in the Collection Account any
amounts representing payments on, and any collections in respect of, the
Mortgage Loans received after the Cut-off Date and prior to the Closing Date
(exclusive of payments in respect of accrued interest due on or prior to the
Cut-off Date), and thereafter the Master Servicer, or the Sponsor, as the case
may be, shall] deposit within two Business Days following receipt thereof the
following payments and collections received or made by it (without duplication):
(i) all collections on and in respect of the Xxxx-
xxxx Loans;
(ii) the amounts, if any, deposited to the Collection
Account pursuant to Section 4.05;
(iii) Net Liquidation Proceeds net of any related
Foreclosure Profit;
(iv) Insurance Proceeds (including, for this purpose,
any amount required to be credited by the Master Servicer pursuant to
the last sentence of Section 3.04 and excluding the portion thereof, if
any, that has been applied to the restoration or repair of the related
Mortgaged Property or released to the related Mortgagor in accordance
with the normal servicing procedures of the Master Servicer); and
(v) any amounts required to be deposited therein
pursuant to Section 10.01;
provided that with respect to each Collection Period, the Master Servicer shall
be permitted to retain from payments in respect of interest on the Mortgage
Loans, the Servicing Fee for such Collection Period and the amount of any
unreimbursed optional advance made by the Master Servicer pursuant to Section
4.05; provided further that, notwithstanding the foregoing, so long as
___________ is the Master Servicer [and (x) the Master Servicer's long-term
unsecured debt obligations are rated at least "[__]" by Xxxxx'x and "[___]" by
Standard & Poor's and (y) the Credit Enhancer's claims-paying ability is rated
"[___]" by Xxxxx'x and "[___]" by Standard & Poor's,] the Master Servicer need
not make daily deposits in the Collection Account for any Collection Period, but
instead may make a single deposit in the Collection Account of amounts to be
remitted by it for such Collection Period in immediately available funds on the
Business Day prior to the related Distribution Date. The foregoing requirements
respecting deposits to the Collection Account are exclusive, it being understood
that, without limiting the generality of the foregoing, the Master Servicer need
not deposit in the Collection Account amounts representing Foreclosure Profits,
fees (including annual fees) or late charge penalties payable by Mortgagors, or
amounts received by the Master Servicer for the accounts of Mortgagors for
application towards the payment of taxes, insurance premiums, assessments,
excess pay off amounts and similar items. The Master Servicer shall remit all
Foreclosure Profits to the Sponsor.
The Trustee shall hold amounts deposited in the Collection Account as
trustee for the Certificateholders [and for the Credit Enhancer]. In addition,
the Master Servicer shall notify the Trustee [and the Credit Enhancer] in
writing on each Determination Date of the amount of payments and collections in
the Collection Account allocable to Interest Collections and Principal
Collections for the related Distribution Date. Following such notification,
the Master Servicer shall be entitled to withdraw from the Collection
Account and retain any amounts that constitute income and gain realized
from the investment of such payments and collections.
Amounts on deposit in the Collection Account will, at the direction of
the Master Servicer, be invested in Eligible Investments maturing no later than
the day before the next Distribution Date. All income and gain realized from any
investment in Eligible Investments of funds in the Collection Account shall be
for the benefit of the Master Servicer and shall be subject to its withdrawal
from time to time. The amount of any losses incurred in respect of the principal
amount of any such investments shall be deposited in the Collection Account by
the Master Servicer out of its own funds immediately as realized.
Section 3.03. Withdrawals from the Collection Account.
From time to time, withdrawals may be made from the Collection
Account by the Master Servicer for the following purposes:
(i) To the Master Servicer as payment for its
Servicing Fee pursuant to Section 3.08;
(ii) To pay to the Master Servicer amounts on deposit in the
Collection Account that are not to be included in the distributions and
payments pursuant to Section 5.01 to the extent provided by the second
to the last and the last paragraph of Section 3.02(b); and
(iii) To make or to permit the Paying Agent to make distributions
and payments pursuant to Section 5.01;
provided that, if the Master Servicer makes monthly deposits in the Collection
Account pursuant to the second proviso of Section 3.02(b), in lieu of making the
foregoing withdrawals (except in the case of clause (iii)), the Master Servicer
may make a net deposit in the Collection Account pursuant to Section 3.02(b).
If the Master Servicer deposits in the Collection Account any amount
not required to be deposited therein or any amount in respect of payments by
Mortgagors made by checks subsequently returned for insufficient funds or other
reason for non-payment it may at any time withdraw such amount from the
Collection Account, and any such amounts shall not be included in the amounts to
be deposited in the Collection Account pursuant to Section 3.02(b), any
provision herein to the contrary notwithstanding.
Section 3.04. Maintenance of Hazard Insurance; Property
Protection Expenses. The Master Servicer shall cause to be
maintained for each Mortgage Loan hazard insurance naming the
Master Servicer or the related subservicer as loss payee thereunder
providing extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the combined principal balance owing on
such Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time
to time. The Master Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value from time to time of the improvements which are a part of such
property or (ii) the combined principal balance owing on such Mortgage Loan and
any mortgage loan senior to such Mortgage Loan at the time of such foreclosure
or deed in lieu of foreclosure plus accrued interest and the good-faith estimate
of the Master Servicer of related Liquidation Expenses to be incurred in
connection therewith. Amounts collected by the Master Servicer under any such
policies shall be deposited in the Collection Account to the extent called for
by Section 3.02. In cases in which any Mortgaged Property is located in a
federally designated flood area, the hazard insurance to be maintained for the
related Mortgage Loan shall include flood insurance. All such flood insurance
shall be in such amounts as are required under applicable guidelines of the
Federal Flood Emergency Act. The Master Servicer shall be under no obligation to
require that any Mortgagor maintain earthquake or other additional insurance and
shall be under no obligation itself to maintain any such additional insurance on
property acquired in respect of a Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Master Servicer shall obtain and
maintain a blanket policy consistent with prudent industry standards insuring
against hazard losses on all of the Mortgage Loans in an aggregate amount
prudent under industry standards, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first sentence of this Section
3.04, it being understood and agreed that such policy may contain a deductible
clause on terms substantially equivalent to those commercially available and
maintained by comparable servicers. If such policy contains a deductible clause,
the Master Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with the first
sentence of this Section, and there shall have been a loss which would have been
covered by such policy, deposit in the Collection Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Master Servicer shall exercise its right to accelerate the maturity of such
Mortgage Loan consistent with the then current practice of the Master Servicer
and without regard to the inclusion of such Mortgage Loan in the Trust. If it
elects not to enforce its right to accelerate or if it is prevented from doing
so by applicable law, the Master Servicer (so long as such action conforms
with the underwriting standards generally acceptable in the industry at
the time for new origination) is authorized to take or enter into an assumption
and modification agreement from or with the Person to whom such Mortgaged
Property has been or is about to be conveyed, pursuant to which such Person
becomes liable under the Credit Line Agreement and, to the extent permitted
by applicable law, the Mortgagor remains liable thereon. The Master
Servicer shall notify the Trustee that any assumption and modification agreement
has been completed by delivering to the Trustee an Officer's Certificate
certifying that such agreement is in compliance with this Section 3.05 and by
forwarding to the applicable Custodian, as agent for the Trustee, the original
copy of such assumption and modification agreement. Any such assumption and
modification agreement shall, for all purposes, be considered a part of the
related Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. No change in the terms of the related Credit Line
Agreement may be made by the Master Servicer in connection with any such
assumption to the extent that such change would not be permitted to be made in
respect of the original Credit Line Agreement pursuant to the fourth paragraph
of Section 3.01(a). Any fee collected by the Master Servicer for entering into
any such agreement will be retained by the Master Servicer as additional
servicing compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Master Servicer shall use reasonable efforts in
accordance with the Servicing Standard to foreclose upon or otherwise comparably
convert to ownership Mortgaged Properties securing such of the Mortgage Loans as
come into and continue in default and as to which no satisfactory arrangements
can be made for collection of delinquent payments pursuant to Section 3.02. The
foregoing is subject to the proviso that the Master Servicer shall not be
required to expend its own funds in connection with any foreclosure or towards
the correction of any default on a related senior mortgage loan or restoration
of any property unless it shall determine that such expenditure will increase
Net Liquidation Proceeds.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee on behalf of
Certificateholders.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust any Mortgage Loan which is 91 days
or more delinquent at a price equal to the purchase price described below. The
price for any Mortgage Loan purchased hereunder (which shall be an amount equal
to 100% of the Asset Balance of such Mortgage Loan plus accrued interest thereon
at the applicable Loan Rate from the date through which interest was last paid
by the related Mortgagor through the Due Date occurring in the calendar
month immediately following the calendar month in which such repurchase
occurs (provided that such purchase price shall be reduced by any
unreimbursed Servicing Advances with respect to such Mortgage Loan and the Loan
Rate used to determine the accrued interest to be paid by the Master Servicer
shall be computed at the Net Loan Rate) shall be deposited in the Collection
Account and the Trustee, upon receipt of a certificate from the Master Servicer
in the form of Exhibit G hereto, 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 prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the purchaser of such
Mortgage Loan any Mortgage Loan released pursuant hereto and the Master Servicer
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The Master Servicer shall
thereupon own such Mortgage Loan, and all security and documents, free of any
further obligation to the Trustee[, the Credit Enhancer] or the
Certificateholders with respect thereto.
Section 3.07. Trustee to Cooperate. On or before each Distribution
Date, the Master Servicer will notify the Trustee of the payment in full of the
Asset Balance of any Mortgage Loan during the preceding Collection Period, which
notification shall be by a certification (which certification shall include a
statement to the effect that all amounts received in connection with such
payment which are required to be deposited in the Collection Account pursuant to
Section 3.02 have been so deposited or credited) of a Servicing Officer. Upon
any such payment in full, the Master Servicer is authorized to execute, pursuant
to the authorization contained in Section 3.01, if the assignments of Mortgage
have been recorded as required hereunder, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Master Servicer if required by applicable law and be delivered
to the Person entitled thereto. It is understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in the Collection Account. If the Trustee is
holding the Mortgage Files, from time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, or in connection with the payment
in full of the Asset Balance of any Mortgage Loan, the Trustee shall, upon
request of the Master Servicer and delivery to the Trustee of a Request for
Release substantially in the form attached hereto as Exhibit G signed by a
Servicing Officer, release the related Mortgage File to the Master Servicer and
the Trustee shall execute such documents, in the forms provided by the Master
Servicer, as shall be necessary to the prosecution of any such proceedings or
the taking of other servicing actions. Such trust receipt shall obligate the
Master Servicer to return the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage
Loan shall be liquidated, in which case, upon receipt of a certificate of
a Servicing Officer similar to that hereinabove specified, the trust
receipt shall be released by the Trustee or such Custodian to the Master
Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recorda- tion of the assignments of
Mortgage in accordance with the provisions hereof, the Trustee shall, if so
requested in writing by the Master Servicer, execute an appropriate assignment
in the form provided to the Trustee by the Master Servicer to assign such
Mortgage Loan for the purpose of collection to the Master Servicer or to the
related subservicer (any such assignment shall unambiguously indicate that the
assignment is for the purpose of collection only), and, upon such assignment,
the Master Servicer will thereupon bring all required actions in its own name
and otherwise enforce the terms of the Mortgage Loan and deposit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments due
under any such Mortgage Loan are paid by the Mortgagor and any other defaults
are cured, then the Master Servicer shall promptly reassign such Mortgage Loan
to the Trustee and return the related Mortgage File to the place where it was
being maintained.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Master Servicer. The Master Servicer shall be entitled to receive the Servicing
Fee pursuant to Section 3.03 as compensation for its services in connection with
servicing the Mortgage Loans. Moreover, additional servicing compensation in the
form of late payment charges or other receipts not required to be deposited in
the Collection Account (other than Foreclosure Profits) shall be retained by the
Master Servicer. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder (including payment of
all other fees and expenses not expressly stated hereunder to be for the account
of the Certificateholders) and shall not be entitled to reimbursement therefor
except as specifically provided herein. Liquidation Expenses are reimbursable to
the Master Servicer first, from related Liquidation Proceeds and second, from
the Collection Account pursuant to Section 5.01(a)(ix). [reimbursement for out
of pocket expenses]
Section 3.09. Annual Statement as to Compliance. (a) The Master
Servicer will deliver to the Trustee[, the Credit Enhancer] and the Rating
Agencies, on or before __________ of each year, beginning ___________, 199_, an
Officer's Certificate, signed by one officer of the Master Servicer, stating
that (i) a review of the activities of the Master Servicer during the preceding
fiscal year (or such shorter period as is applicable in the case of the first
report) and of its performance under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, the Master Servicer has fulfilled all of its material
obligations under this Agreement throughout such fiscal 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.
(b) The Master Servicer shall deliver to the Trustee[, the Credit
Enhancer] and each of the Rating Agencies, promptly after having obtained
knowledge thereof, but in no event later than five Business Days thereafter,
written notice by means of an Officer's Certificate of any event which with the
giving of notice or the lapse of time or both, would become an Event of
Servicing Termination.
Section 3.10. Annual Servicing Report. On or before __________ of each
year, beginning _________, 199_, the Master Servicer, at its expense, shall
cause a firm of nationally recognized independent public accountants (who may
also render other services to the Master Servicer) to furnish a report to [the
Trustee, the Credit Enhancer and] each Rating Agency to the effect that such
firm has examined certain documents and records relating to the servicing of
mortgage loans during the most recent fiscal year then ended under pooling and
servicing agreements (substantially similar to this Agreement, including this
Agreement) that such examination, was conducted substantially in compliance with
the audit guide for audits of non-supervised mortgagees approved by the
Department of Housing and Urban Development for use by independent public
accountants (to the extent that the procedures in such audit guide are
applicable to the servicing obligations set forth in such agreements) and that
such examination has disclosed no items of noncompliance with the provisions of
this Agreement which, in the opinion of such firm, are material, except for such
items of noncompliance as shall be set forth in such report.
Section 3.11. Access to Certain Documentation and Information Regarding
the Mortgage Loans. (a) The Master Servicer shall provide to the Trustee, [the
Credit Enhancer], any Investor Certificateholders that are federally insured
savings and loan associations, the Office of Thrift Supervision, successor to
the Federal Home Loan Bank Board, the FDIC and the supervisory agents and
examiners of the Office of Thrift Supervision access to the documentation
regarding the Mortgage Loans required by applicable regulations of the Office of
Thrift Supervision and the FDIC (acting as operator of the SAIF or the BIF),
such access being afforded without charge but only upon reasonable request and
during normal business hours at the offices of the Master Servicer. Nothing in
this Section 3.11 shall derogate from the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as
provided in this Section 3.11 as a result of such obligation shall not
constitute a breach of this Section 3.11.
(b) The Master Servicer shall supply information in such form as the
Trustee shall reasonably request to the Trustee and the Paying Agent, on or
before the start of the Determination Date preceding the related Distribution
Date, as is required in the Trustee's reasonable judgment to enable the Paying
Agent or the Trustee, as the case may be, to make required distributions and to
furnish the required reports to Certificateholders and to make any claim under
the Policy.
Section 3.12. Maintenance of Certain Servicing Insurance Policies. The
Master Servicer shall during the term of its service as master servicer maintain
in force (i) a policy or policies of insurance covering errors and omissions in
the performance of its obligations as master servicer hereunder and (ii) a
fidelity bond in respect of its officers, employees or agents. Each such policy
or policies and bond together shall comply with the requirements from time to
time of the Federal National Mortgage Association for persons performing
servicing for mortgage loans purchased by such Association.
Section 3.13. Reports to the Securities and Exchange Commission. The
Trustee shall, on behalf of the Trust, cause to be filed with the Securities and
Exchange Commission any periodic reports required to be filed under the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission thereunder. Upon the
request of the Trustee, each of the Sponsor, the Master Servicer, the Depositor
and the Transferor shall cooperate with the Trustee in the preparation of any
such report and shall provide to the Trustee in a timely manner all such
information or documentation as the Trustee may reasonably request in connection
with the performance of its duties and obligations under this Section.
Section 3.14. Tax Returns. In accordance with Section 2.08 hereof, the
Trustee shall prepare and file any federal, state or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust. The Transferor shall
treat the Mortgage Loans as its property for all federal, state or local tax
purposes and shall report all income earned thereon (including amounts payable
as fees to the Master Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file federal, state or local
tax returns, the Trustee shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Trustee shall
promptly sign such returns and deliver such returns after signature to the
Master Servicer and such returns shall be filed by the Master Servicer. The
Trustee shall also prepare or shall cause to be prepared all tax information
required by law to be distributed to Investor Certificateholders. In no event
shall the Trustee or the Master Servicer be liable for any liabilities,
costs or expenses of the Trust, the Investor Certificateholders, the Transferor
Certificateholders or the Certificate Owners arising under any tax law,
including without limitation federal, state or local income and franchise
or excise taxes or any other tax imposed on or measured by income (or any
interest or penalty with respect thereto or arising from a failure to
comply therewith).
Section 3.15. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Master Servicer shall prepare and deliver all federal and state information
reports when and as required by all applicable state and federal income tax
laws. In particular, with respect to the requirement under Section 6050J of the
Code to the effect that the Master Servicer shall make reports of foreclosures
and abandonments of any mortgaged property for each year beginning in 199_, the
Master Servicer shall file reports relating to each instance occurring during
the previous calendar year in which the Master Servicer (i) on behalf of the
Trustee acquires an interest in any Mortgaged Property through foreclosure or
other comparable conversion in full or partial satisfaction of a Mortgage Loan,
or (ii) knows or has reason to know that any Mortgaged Property has been
abandoned. The reports from the Master Servicer shall be in form and substance
sufficient to meet the reporting requirements imposed by Section 6050J.
ARTICLE IV
Servicing Certificate
Section 4.01. Servicing Certificate. Not later than each Determination
Date, the Master Servicer shall deliver (a) to the Trustee, the Statement to
Certificateholders required to be prepared pursuant to Section 5.03 and (b) to
the Trustee, the Sponsor, the Depositor, the Paying Agent, [the Credit Enhancer]
and each Rating Agency a Servicing Certificate (in written form or the form of
computer readable media or such other form as may be agreed to by the Trustee
and the Master Servicer), together with an Officer's Certificate to the effect
that such Servicing Certificate is true and correct in all material respects,
stating the related Collection Period, Distribution Date, the series number of
the Certificates, the date of this Agreement, and:
(i) the aggregate amount of collections received on the
Mortgage Loans on or prior to the Determination Date in respect of such
Collection Period;
(ii) the aggregate amount of (a) Interest Collections
and (b) Principal Collections for such Collection Period;
(iii) the Investor Floating Allocation Percentage and
the Investor Fixed Allocation Percentage for such Collection
Period;
(iv) the Investor Interest Collections and Investor
Principal Collections for such Collection Period;
(v) the Transferor Interest Collections and Trans-
feror Principal Collections for such Collection Period;
(vi) Investor Certificate Interest and the Investor
Certificate Rate for the related Interest Period;
(vii) the amount, if any, of such Investor Certificate
Interest that is not payable on account of insufficient Investor
Interest Collections;
(viii) the portion of the Unpaid Investor Certificate
Interest Shortfall, if any, the amount of interest on such shortfall at
the Certificate Rate applicable from time to time (separately stated)
to be distributed on such Distribution Date;
(ix) the Unpaid Investor Certificate Interest Shortfall,
if any, to remain after the distribution on such Distribution Date;
(x) the Accelerated Principal Distribution Amount and
the portion thereof that will be distributed pursuant to Section
5.01(a)(vii);
(xi) the Scheduled Principal Collections Distribution
Amount, separately stating the components thereof;
(xii) the amount of any Transfer Deposit Amount paid by
the Sponsor or the Depositor pursuant to Section 2.02 or 2.04;
(xiii) any accrued and unpaid Servicing Fees for previous
Collection Periods and the Servicing Fee for such Collection Period;
(xiv) the Investor Loss Amount for such Collection
Period;
(xv) the aggregate amount, if any, of Investor Loss
Reduction Amounts for previous Distribution Dates that have not been
previously reimbursed to Investor Certificate- holders pursuant to
Section 5.01(a)(v);
(xvi) the aggregate Asset Balance of the Mortgage Loans
as of the end of the preceding Collection Period and as of the end of
the second preceding Collection Period;
(xvii) the Pool Balance as of the end of the preceding
Collection Period and as of the end of the second preceding
Collection Period;
(xviii) the Invested Amount as of the end of the preced-
ing Collection Period;
(xix) the Investor Certificate Principal Balance and Pool
Factor after giving effect to the distribution on such Distribution
Date and to any reduction on account of the Investor Loss Amount;
(xx) the Transferor Principal Balance and the Available
Transferor Subordinated Amount after giving effect to the distribution
on such Distribution Date;
(xxi) the aggregate amount of Additional Balances created
during the previous Collection Period;
(xxii) the number and aggregate Asset Balances of Mortgage
Loans (x) as to which the Minimum Monthly Payment is delinquent for
30-59 days, 60-89 days and 90 or more days, respectively and (y) that
have become REO, in each case as of the end of the preceding Collection
Period;
(xxiii) whether a Rapid Amortization Event has occurred
since the prior Determination Date, specifying each such Rapid
Amortization Event if one has occurred;
(xxiv) whether an Event of Servicing Termination has
occurred since the prior Determination Date, specifying each such Event
of Servicing Termination if one has occurred;
[ (xxv) the amount to be distributed to the Credit
Enhancer pursuant to Section 5.01(a)(vi) and Section
5.01(a)(viii)(ii), stated separately;]
(xxvi) the Guaranteed Principal Distribution Amount for
such Distribution Date;
(xxvii) the Credit Enhancement Draw Amount, if any, for
such Distribution Date;
(xxviii) the amount to be distributed to the Transferor
pursuant to Section 5.01(a)(x);
(xxix) the amount to be paid to the Master Servicer
pursuant to Section 5.01(a)(ix);
(xxx) the Maximum Rate for the related Collection
Period and the Weighted Average Net Loan Rate;
(xxxi) the expected amount of any optional advances
pursuant to Section 4.05 hereof by the Master Servicer included in the
distribution on such Distribution Date and the aggregate expected
amount of optional advances pursuant to Section 4.05 hereof by the
Master Servicer outstanding as of the close of business on such
Distribution Date;
(xxxii) the Overcollateralization Amount after giving
effect to the distribution to be made on such Distribution
Date;
(xxxiii) the number and principal balances of any Mortgage
Loans transferred to the Transferor pursuant to Section 2.06;
(xxxiv) the aggregate of all Liquidation Loss Amounts since
the Cut-off Date and whether a Cumulative Loss Test Violation has
occurred since the prior Determination Date; and
(xxxv) the Rolling Six Month Delinquency Rate for such
Distribution Date.
The Trustee shall conclusively rely upon the information contained in a
Servicing Certificate for purposes of making distributions pursuant to Section
5.01, shall have no duty to inquire into such information and shall have no
liability in so relying. The format and content of the Servicing Certificate
may be modified by the mutual agreement of the Master Servicer, the Trustee
and the Credit Enhancer. The Master Servicer shall give notice of any such
change to the Rating Agencies.
Section 4.02. Claims upon the Policy; Policy Payments
Account.
(a) If, by the close of business on the third Business Day prior to a
Distribution Date, the sum of the funds then on deposit in the Collection
Account for the related Collection Period which are payable to the Investor
Certificateholders pursuant to Sections 5.01(a) (excluding the amount, if any,
payable pursuant to clause (vii) thereof) and (b) (after giving effect to the
distribution of the Trustee Fee and the Premium) and the amount, if any,
deposited into the Collection Account pursuant to Section 4.05 are insufficient
to pay the Guaranteed Distribution on such Distribution Date, then the Trustee
shall give notice to the Credit Enhancer by telephone or telecopy of the amount
equal to the Credit Enhancement Draw Amount. Such notice of such sum shall be
confirmed in writing in the form of Notice for payment set forth as Exhibit A to
the Policy, to the Credit Enhancer at or before 10:00 a.m., New York City time,
on the second Business Day prior to such Distribution Date. Following receipt by
the Credit Enhancer of such notice in such form, the Credit Enhancer will pay
any amount payable under the Policy as set forth in such form on the later to
occur of (i) 12:00 noon, New York City time, on the second Business Day
following such receipt and (ii) 12:00 noon, New York City time, on the
Distribution Date to which such deficiency relates.
(b) The Trustee shall establish a separate special purpose trust
account, which account shall be an Eligible Account, for the benefit of Holders
of the Investor Certificates and the Credit Enhancer referred to herein as the
"Policy Payments Account" over which the Trustee shall have exclusive control
and sole right of withdrawal. The Trustee shall deposit any amount paid under
the Policy in the Policy Payments Account and distribute such amount only for
purposes of payment to Holders of the Investor Certificates of the Guaranteed
Distribution for which a claim was made and such amount may not be applied to
satisfy any costs, expenses or liabilities of the Master Servicer, the Trustee
or the Trust. Amounts paid under the Policy shall be transferred to the
Collection Account in accordance with the next succeeding paragraph and
disbursed by the Trustee to Holders of Investor Certificates in accordance with
Section 5.01. It shall not be necessary for such payments to be made by checks
or wire transfers separate from the checks or wire transfers used to pay the
Guaranteed Distribution with other funds available to make such payment.
However, the amount of any payment of principal of or interest on the Investor
Certificates to be paid from funds transferred from the Policy Payments
Account shall be noted as provided in paragraph (c) below in the Certificate
Register and in the statement to be furnished to Holders of the Investor
Certificates pursuant to Section 5.03. Funds held in the Policy Payments Account
shall not be invested.
On any Distribution Date with respect to which a claim has been made
under the Policy, the amount of any funds received by the Trustee as a result of
any claim under the Policy, to the extent required to make the Guaranteed
Distribution on such Distribution Date, shall be withdrawn from the Policy
Payments Account and deposited in the Collection Account and applied by the
Trustee, together with the other funds to be withdrawn from the Collection
Account pursuant to Section 5.01 directly to the payment in full of the
Guaranteed Distribution due on the Investor Certificates. Any funds received by
the Trustee shall be used solely for payment to the Holders of Investor
Certificates and may not be applied to satisfy any costs, expenses or
liabilities of the Master Servicer, the Trustee or the Trust. Any funds
remaining in the Policy Payments Account on the first Business Day following a
Distribution Date shall be remitted to the Credit Enhancer, pursuant to the
instructions of the Credit Enhancer, by the end of such Business Day.
[ (c) The Trustee shall keep a complete and accurate record of the amount of
interest and principal paid in respect of any Investor Certificate from moneys
received under the Policy. The Credit Enhancer shall have the right to inspect
such records at reasonable times during normal business hours upon one Business
Day's prior notice to the Trustee.]
(d) The Trustee shall promptly notify the Credit Enhancer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any distribution made with respect to the Investor
Certificates. Each Investor Certificateholder, by its purchase of Investor
Certificates, the Master Servicer and the Trustee hereby agree that, the Credit
Enhancer (so long as no Credit Enhancer Default exists) may at any time during
the continuation of any proceeding relating to a Preference Claim direct all
matters relating to such Preference Claim, including, without limitation, (i)
the direction of any appeal of any order relating to such Preference Claim and
(ii) the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Credit Enhancer
shall be subrogated to the rights of the Master Servicer, the Trustee and each
Investor Certificateholder in the conduct of any such Preference Claim,
including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim.
Section 4.03. Replacement Policy. In the event of a Credit Enhancer
Default or if the claims paying ability rating of the Credit Enhancer is
downgraded and such downgrade results in a downgrading of the then current
rating of the Investor Certificates (in each case, a "Replacement Event"), the
Depositor may, in accordance with and upon satisfaction of the conditions set
forth in the Policy, including, without limitation, payment in full of all
amounts owed to the Credit Enhancer, but shall not be required to, substitute a
new surety bond or surety bonds for the existing Policy, provided that in each
case the Investor Certificates shall be rated no lower than the rating assigned
by each Rating Agency to the Investor Certificates immediately prior to such
Replacement Event and that such new surety bond will qualify as a "similar
commercially available credit enhancement contract" within the meaning of Treas.
Reg. ss. 1.1001- 3(e)(4)(iv)(B). It shall be a condition to substitution of any
new credit enhancement that there be delivered to the Trustee a legal opinion,
acceptable in form and substance to the Trustee, from counsel to the provider of
such new credit enhancement with respect to the enforceability thereof and such
other matters as the Trustee may require. Upon receipt of the items referred to
above and the taking of physical possession of the new credit enhancement, the
Trustee shall, within five Business Days following receipt of such items and
such taking of physical possession, deliver the replaced Policy to the Credit
Enhancer. Any other form of credit enhancement may also be substituted for the
Policy upon the occurrence of a Replacement Event, provided that the Trustee
receives an Opinion of Counsel to the effect that such substitution will not be
treated as a significant modification within the meaning of Treas. Reg. ss.
1.1001-3.
[Section 4.04. Effect of Payments by the Credit Enhancer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on any of the Investor Certificates which is made with
moneys received pursuant to the terms of the Policy shall not be considered
payment of such Investor Certificates from the Trust and shall not result in the
payment of or the provision for the payment of the principal of or interest on
such Investor Certificates within the meaning of Section 5.01. The Depositor,
the Master Servicer and the Trustee acknowledge, and each Holder by its
acceptance of an Investor Certificate agrees, that without the need for any
further action on the part of the Credit Enhancer, the Depositor, the Master
Servicer, the Trustee or the Certificate Registrar (a) to the extent the Credit
Enhancer makes payments, directly or indirectly, on account of principal of or
interest on any Investor Certificates to the Holders of such Certificates, the
Credit Enhancer will be fully subrogated to the rights of such Holders to
receive such principal and interest from the Trust and (b) the Credit Enhancer
shall be paid such principal and interest but only from the sources and in the
manner provided herein for the payment of such principal and interest.
The Trustee and the Master Servicer shall cooperate in all respects
with any reasonable request by the Credit Enhancer for action to preserve or
enforce the Credit Enhancer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.]
Section 4.05. Optional Advances of the Master Servicer. The Master
Servicer, in its sole discretion, may advance the interest component of any
delinquent Minimum Monthly Payment (or any portion thereof) by depositing such
amount into the Collection Account on or prior to the related Determination
Date.
ARTICLE V
Payments and Statements to
Certificateholders; Rights of Certificateholders
Section 5.01. Distributions.
(a) Distributions of Investor Interest Collections and Investment
Proceeds. Subject to Section 11.02(b), on each Distribution Date, the Trustee or
the Paying Agent, as the case may be, shall distribute out of the Collection
Account to the extent of Investor Interest Collections collected during the
related Collection Period and the amount, if any, deposited into the Collection
Account pursuant to Section 4.05, the following amounts and in the following
order of priority to the following Persons (based on the information set forth
in the Servicing Certificate):
(i) the Trustee Fee for such Distribution Date to
the Trustee;
[(ii) the Premium pursuant to the Insurance Agreement
to the Credit Enhancer;]
(iii) the Investor Certificate Interest for such
Distribution Date to the Investor Certificateholders and the Unpaid
Investor Certificate Interest Shortfall, if any, for such Distribution
Date to the Investor Certificateholders plus, to the extent legally
permissible, interest thereon at the Investor Certificate Rate;
(iv) the Investor Loss Amount for such Distribution Date
to the Investor Certificateholders as principal in reduction of the
Investor Certificate Principal Balance;
(v) to Investor Certificateholders as principal in
reduction of the Investor Certificate Principal Balance the aggregate
amount of the Investor Loss Reduction Amounts, if any, for previous
Distribution Dates that have not been previously reimbursed to Investor
Certificateholders pursuant to this clause (v);
[ (vi) to reimburse the Credit Enhancer for previously
unreimbursed Credit Enhancement Draw Amounts together with
interest thereon at the applicable rate set forth in the
Insurance Agreement;]
(vii) the Accelerated Principal Distribution Amount,
if any, to the Investor Certificateholders;
[(viii) to the Credit Enhancer for any amounts owed to
the Credit Enhancer pursuant to the Insurance Agreement;]
(ix) any amounts required to be paid to the Master
Servicer pursuant to Sections 3.08 and 7.03 which have not been
previously paid to the Master Servicer; and
(x) any remaining amount to the Transferor.
(b) Distribution of Principal Collections. Subject to Section 11.02(b)
and except on the Distribution Date in _______ ____, on each Distribution Date,
the Trustee shall distribute out of the Collection Account to the Investor
Certificateholders the Principal Collections up to the Scheduled Principal
Collections Distribution Amount but not in excess of the Investor Certificate
Principal Balance. On the Distribution Date in ________ ____, the Trustee shall
distribute to Investor Certificateholders Principal Collections up to the
Investor Certificate Principal Balance.
(c) Application of Subordinated Transferor Collections. If, after
applying Investor Interest Collections as provided in Section 5.01(a) above, any
Required Amount remains unpaid, the Trustee shall, based on information set
forth in the Servicing Certificate for such Distribution Date, apply
Subordinated Transferor Collections to make such payments. If Investor Interest
Collections and Subordinated Transferor Collections are insufficient to cover
the Required Amount for such Distribution Date, then the remaining Investor Loss
Amount (but only to the extent of the Available Transferor Subordinated Amount)
shall be reallocated to the Transferor Principal Balance and shall not be
allocated to the Investor Certificates; provided that no such allocation of
Investor Loss Amounts shall reduce the Transferor Principal Balance below zero.
[(d) Distribution of the Credit Enhancement Draw Amount. With respect
to any Distribution Date, to the extent that Investor Interest Collections on
the related Distribution Date and any amounts, if any, deposited to the
Collection Account pursuant to Section 4.05 applied in the order specified in
Section 5.01(a) are insufficient to make distributions as provided in clause
(iii) of Section 5.01(a) above, the Trustee will make such payments (the
"Deficiency Amount") from the amount drawn under the Policy for such
Distribution Date pursuant to Section 4.02. For any Distribution Date as to
which there is a Guaranteed Principal Distribution Amount, the Trustee shall
distribute the Guaranteed Principal Distribution Amount to Certificateholders
from the amount drawn under the Policy for such Distribution Date pursuant to
Section 4.02.]
The aggregate amount of principal distributed to the Investor
Certificateholders under this Agreement shall not exceed the Original Investor
Certificate Principal Balance.
(e) Method of Distribution. The Trustee shall make distri-
butions in respect of a Distribution Date to each Investor Certificateholder
of record on the related Record Date (other than as provided in Section 10.01
respecting the final distribution) by check or money order mailed to such
Investor Certifi- cateholder at the address appearing in the Certificate
Register, or upon written request by an Investor Certificateholder delivered
to the Trustee at least five Business Days prior to such Record Date, by wire
transfer (but only if such Certificate- holder is the Depository or such
Certificateholder owns of record one or more Investor Certificates having
principal denominations aggregating at least $[_______________]), or by such
other means of payment as such Investor Certificateholder and the Trustee shall
agree. Distributions among Investor Certificateholders shall be made in
proportion to the Percentage Interests evidenced by the Investor Certificates
held by such Investor Certificate- holders.
(f) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which shall
credit 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. All such credits and disbursements
with respect to a Book-Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the Investor
Certificates. None of the Trustee, the Paying Agent, the Certificate Registrar,
the Depositor[, the Credit Enhancer] or the Master Servicer shall have any
responsibility therefor except as otherwise provided by applicable law.
(g) Distributions to Holders of Transferor Certificates. On each
Distribution Date, the Trustee shall, based upon the information set forth in
the Servicing Certificate for such Distribution Date and subject to Section
5.01(c), distribute to the Transferor (i) the Transferor Interest Collections
for the related Collection Period and (ii) the portion, if any, of Transferor
Principal Collections for the related Collection Period in excess of Additional
Balances created during such Collection Period; provided that collections
allocable to the Transferor Certificates will be distributed to the Transferor
only to the extent that such distribution will not reduce the amount of the
Transferor Principal Balance as of the related Distribution Date below the
Minimum Transferor Interest. Amounts not distributed to the Transferor because
of such limitations will be retained in the Collection Account until the
Transferor Principal Balance exceeds the Minimum Transferor Interest, at which
time such excess shall be released to the Transferor. If any such amounts are
still retained in the Collection Account upon the commencement of the Rapid
Amortization Period, such amounts will be paid to the Investor Certificate-
holders as a reduction of the Investor Certificate Principal Balance.
Section 5.02. Calculation of the Investor Certificate Rate. On the
second LIBOR Business Day immediately preceding each Distribution Date, the
Trustee shall determine LIBOR for the Interest Period commencing on such
Distribution Date and inform the Master Servicer (at the facsimile number given
to the Trustee in writing) of such rates. On each Determination Date, the
Trustee shall determine the applicable Investor Certificate Rate for the related
Distribution Date.
Section 5.03. Statements to Certificateholders. Concurrently with each
distribution to Investor Certificateholders, the Trustee shall forward to each
Investor Certificateholder, the Master Servicer[, the Credit Enhancer] and each
Rating Agency a statement prepared by the Master Servicer pursuant to Section
4.01 with respect to such distribution setting forth:
(i) the Investor Floating Allocation Percentage for
the preceding Collection Period;
(ii) the Investor Certificate Distribution Amount;
(iii) the amount of Investor Certificate Interest
in such distribution and the related Investor Certificate Rate;
(iv) the amount, if any, of any Unpaid
Investor Certificate Interest Shortfall in such distribution;
(v) the amount, if any, of the remaining
Unpaid Investor Certificate Interest Shortfall after giving
effect to such distribution;
(vi) the amount, if any, of principal in such
distribution, separately stating the components thereof;
(vii) the amount, if any, of the reimbursement of
previous Investor Loss Amounts in such distribution;
(viii) the amount, if any, of the aggregate of unreim-
bursed Investor Loss Reduction Amounts after giving effect to such
distribution;
(ix) the Servicing Fee for such Distribution Date;
(x) the Invested Amount, the Investor Certificate
Principal Balance and the Pool Factor, each after giving effect to such
distribution;
(xi) the Pool Balance as of the end of the preceding
Collection Period and the aggregate of the Asset Balances of the
Mortgage Loans at the close of business on the last day of the related
Collection Period;
(xii) the Credit Enhancement Draw Amount, if any;
(xiii) the number and aggregate Asset Balances of Mortgage
Loans as to which the Minimum Monthly Payment is delinquent for 30-59
days, 60-89 days and 90 or more days, respectively, as of the end of
the preceding Collection Period;
(xiv) the book value (within the meaning of 12 C.F.R. ss.
571.13 or comparable provision) of any real estate acquired through
foreclosure or grant of a deed in lieu of foreclosure;
(xv) the amount of any optional advances pursuant to
Section 4.05 hereof by the Master Servicer included in the distribution
on such Distribution Date and the aggregate amount of optional advances
pursuant to Section 4.05 hereof by the Master Servicer outstanding as
of the close of business on such Distribution Date;
(xvi) the Investor Certificate Rate applicable to such
distribution;
(xvii) the number and principal balances of any Mortgage
Loans retransferred to the Transferor pursuant to (a) Section 2.04 and
(b) Section 2.06;
(xviii) the amount of Subordinated Transferor Collections,
if any, included in such distribution;
(xix) the amount of Overcollateralization Step-Down
Amount, if any, included in such distribution;
(xx) the Available Transferor Subordinated Amount for
such Distribution Date; and
(xxi) the Overcollateralization Amount for the following
Distribution Date.
In the case of information furnished pursuant to clauses (ii), (iii) in
respect of Investor Certificate Interest, (iv), (v), (vi), (vii) and (viii)
above, the amounts shall be expressed as a dollar amount per Investor
Certificate with a $[_________] denomination.
Within 60 days after the end of each calendar year, the Master Servicer
shall prepare or cause to be prepared and shall forward to the Trustee the
information set forth in clauses (iii) and (vi) above aggregated for such
calendar year. Such obligation of the Master Servicer shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Master Servicer or a Paying Agent pursuant to any requirements
of the Code.
The Trustee shall prepare or cause to be prepared (in a manner
consistent with the treatment of the Investor Certificates as indebtedness of
the Transferor, or as may be otherwise required by Section 3.14) Internal
Revenue Service Form 1099 (or any successor form) and any other tax forms
required to be filed or furnished to Certificateholders in respect of
distributions by the Trustee (or the Paying Agent) on the Investor Certificates
and shall file and distribute such forms as required by law.
Section 5.04. Rights of Certificateholders. The Investor Certificates
shall represent fractional undivided interests in the Trust, including the
benefits of the Collection Account and the right to receive Investor Interest
Collections, Principal Collections and other amounts at the times and in the
amounts specified in this Agreement; the Transferor Certificates shall represent
the remaining interest in the Trust.
ARTICLE VI
The Certificates
Section 6.01. The Certificates. The Investor Certificates and
Transferor Certificates shall be substantially in the forms set forth in
Exhibits A and B, respectively, and shall, on original issue, be executed,
authenticated and delivered by the Trustee to or upon the order of the Depositor
concurrently with the sale and assignment to the Trustee of the Trust. The
Investor Certificates shall be initially evidenced by one or more certificates
representing the entire Original Investor Certificate Principal Balance and
shall be held in minimum dollar denominations of $[____________] and integral
dollar multiples in excess thereof, except that one Investor Certificate may be
in a different denomination of less than $[_________] so that the sum of the
denominations of all outstanding Investor Certificates shall equal the Original
Investor Certificate Principal Balance. The sum of the denominations of all
outstanding Investor Certificates shall equal the Original Investor Certificate
Principal Balance. The Transferor Certificates shall be issuable as one or more
certificates representing the entire interest in the assets of the Trust other
than that represented by the Investor Certificates and shall initially be issued
to the Sponsor.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer under its seal imprinted thereon.
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 Transferor Certificates or did not hold such offices at the date of such
Transferor 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 6.02(c), the Investor Certificates
shall be Book-Entry Certificates. The Transferor Certificates shall not be
Book-Entry Certificates.
Section 6.02. Registration of Transfer and Exchange of Investor
Certificates; Appointment of Registrar. (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 Investor Certificates and of
transfers and exchanges of Investor Certificates as herein provided. The
Trustee shall initially serve as Certificate Registrar for the purpose of
registering Investor Certificates and transfers and exchanges of Investor
Certificates as herein provided.
Upon surrender for registration of transfer of any Investor Certificate
at any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph, the Trustee on behalf of the Trust shall
execute, authenticate and deliver, in the name of the designated transferee or
trans- ferees, one or more new Investor Certificates of the same aggregate
Percentage Interest.
At the option of the Investor Certificateholders, Investor Certificates
may be exchanged for other Investor Certificates in authorized denominations and
the same aggregate Percentage Interests, upon surrender of the Investor
Certificates to be exchanged at any such office or agency. Whenever any Investor
Certificates are so surrendered for exchange, the Trustee shall execute and
authenticate and deliver the Investor Certificates which the Investor
Certificateholder making the exchange is entitled to receive. Every Investor
Certificate presented or surrendered for 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 in form 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 the Investor 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 Investor
Certificates; (iii) ownership and transfers of registration of the Investor
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 deal with the Depository as representative of the Certificate
Owners of the Investor 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; and (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.
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 an Event of Servicing
Termination, the Depository, at the direction of Certificate Owners representing
Percentage Interests aggregating not less than 51% advises the Trustee in
writing that the continuation of a book-entry system through the Depository to
the exclusion of definitive, fully registered Investor 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 Investor Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall execute 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, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates, and the Trustee, the Certificate
Registrar, the Master Servicer and the Depositor shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
All Investor Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 6.03. 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, 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 6.03, 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) connected therewith. Any duplicate Certificate issued
pursuant to this Section 6.03, 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 6.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Master Servicer, the Depositor,
the Trustee, the Certificate Registrar, any Paying Agent and any agent of the
Master Servicer, the Depositor, the Trustee, any Paying Agent or the Certificate
Registrar 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 5.01 and for all other purposes
whatsoever, and none of the Master Servicer, the Depositor, the Trustee, the
Certificate Registrar, any Paying Agent or any agent of any of them shall be
affected by notice to the contrary.
Section 6.05. Restrictions on Transfer of Transferor Certificates. (a)
The Transferor Certificates shall be assigned, transferred, exchanged, pledged,
financed, hypothecated or otherwise conveyed (collectively, for purposes of this
Section 6.05 and any other Section referring to the Transferor Certificates,
"transferred" or a "transfer") only in accordance with this Section 6.05.
(b) No transfer of a Transferor Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Transferor Certificate to the Transferor, the Trustee shall require (i) the
trans- feree to execute an investment letter acceptable to and in form and
substance satisfactory to the Trustee certifying to the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee or (ii) if the investment letter is not delivered, a written
Opinion of Counsel acceptable to and in form and substance 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 said Act or is being made pursuant to said Act, which Opinion of
Counsel shall not be an expense of the Trustee or the Depositor. The
Holder of a Transferor Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Transferor 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) The Transferor Certificates and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent: (i)
the Person that acquires a Trans- feror Certificate shall (A) be organized and
existing under the laws of the United States of America or any state or the
District of Columbia thereof, (B) expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, the performance of every covenant
and obligation of the Transferor hereunder and (C) as part of its acquisition of
a Transferor Certificate, acquire all rights of the Transferor or any trans-
feree under this Section 6.05(c) to amounts payable to such Transferor or such
transferee under Sections 5.01(a)(x) and 5.01(g); (ii) the Holder of the
Transferor Certificates shall deliver to the Trustee an Officer's Certificate
stating that such transfer and such supplemental agreement comply with this
Section 6.05(c) and that all conditions precedent provided by this Section
6.05(c) have been complied with and an Opinion of Counsel stating that all
conditions precedent provided by this Section 6.05(c) have been complied with,
and the Trustee may conclusively rely on such Officer's Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein and shall
incur no liability in so relying; (iii) the Holder of the Trans- feror
Certificates shall deliver to the Trustee a letter from each Rating Agency
confirming that its rating of the Investor Certificates, after giving effect to
such transfer, will not be reduced or withdrawn without regard to the Policy;
(iv) the transferee of the Transferor Certificates shall deliver to the Trustee
an Opinion of Counsel to the effect that (a) such transfer will not adversely
affect the treatment of the Investor Certificates after such transfer as debt
for federal and applicable state income tax purposes, (b) such transfer will not
result in the Trust being subject to tax at the entity level for federal or
applicable state tax purposes, (c) such transfer will not have any material
adverse impact on the federal or applicable state income taxation of an Investor
Certificateholder or any Certificate Owner and (d) such transfer will not result
in the arrangement created by this Agreement or any "portion" of the Trust,
being treated as a taxable mortgage pool as defined in Section 7701(i) of the
Code; (v) all filings and other actions necessary to continue the perfection of
the interest of the Trust in the Mortgage Loans and the other property conveyed
hereunder shall have been taken or made and (vi) the transferee shall have
assumed the obligations of the Transferor pursuant to Section 7.07 hereof.
Notwithstanding the foregoing, the requirement set forth in subclause
(i)(A) of this Section 6.05(c) shall not apply in the event the Trustee
shall have received a letter from each Rating Agency confirming that its
rating of the Investor Certificates, after giving effect to a proposed
transfer to a Person that does not meet the requirement set forth in
subclause (i)(A), shall not be reduced or withdrawn. Notwithstanding
the foregoing, the requirements set forth in this paragraph (c) shall not
apply to the initial issuance of the Transferor Certificates to the
Transferor.
(d) Except for the initial issuance of the Transferor Certificate to
the Transferor, no transfer of a Transferor Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, nor a Person acting on
behalf of any such plan, which representation letter shall not be an expense of
the Trustee, (ii) if the purchaser is an insurance company, a representation
that the purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates are covered
under PTCE 95-60, or (iii) in the case of any Transferor Certificate presented
for registration in the name of an employee benefit plan subject to ERISA, and
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan, an Opinion of Counsel to the effect
that the purchase or holding of such Certificate will not result in the assets
of the Trust being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee to
any obligation in addition to those undertaken in this Agreement, which Opinion
of Counsel shall not be an expense of the Trustee or the Depositor.
Section 6.06. Appointment of Paying Agent. (a) The Paying Agent shall
make distributions to Investor Certificateholders from the Collection Account
pursuant to Section 5.01 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 Collection Account pursuant to Section 3.03 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 a corporation 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.
(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 Investor Certificateholders in trust
for the benefit of the Investor 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.
Section 6.07. Acceptance of Obligations. The Transferor,
by its acceptance of the Transferor Certificates, agrees to be
bound by and to perform all the duties of the Transferor set
forth in this Agreement.
ARTICLE VII
The Master Servicer, the Sponsor and the Depositor
Section 7.01. Liability of the Sponsor, the Master Servicer and the
Depositor. The Sponsor and the Master Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Sponsor or 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 herein.
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Master Servicer or the Depositor. Any corporation into which
the Master Servicer or the Depositor may be merged or consolidated, or any
corporation 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.
Section 7.03. 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 that this provision shall not
protect the Master Servicer or any such Person against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties of the Master Servicer or by reason of
reckless disregard of obligations and duties of the Master Servicer hereunder.
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 gross negligence in the
performance of duties hereunder or by reason of its reckless disregard of obli-
gations and duties hereunder. The Master Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to duties to service the Mortgage Loans in accordance with this
Agreement, and which in its opinion may involve it in any expense or liability;
provided that the Master Servicer may in its sole discretion 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. 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 only be
entitled to be reimbursed therefor pursuant to Section 5.01(a)(ix). The Master
Servicer's right to indemnity or reimbursement pursuant to this Section 7.03
shall survive any resignation or termination of the Master Servicer pursuant to
Section 7.04 or 8.01 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).
Section 7.04. Master Servicer Not to Resign. Subject to the provisions
of Section 7.02, 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; (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 Investor Certificates without regard to the Policy; and
(c) such proposed successor master servicer is reasonably acceptable to the
Credit Enhancer, as evidenced by a letter to the Trustee; provided that no such
resignation by the Master Servicer shall become effective until the Trustee or
successor master servicer designated by the Master Servicer as provided above
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 8.02. Any such resignation shall not relieve the Master
Servicer of responsibility for any of the obligations specified in Sections 8.01
and 8.02 as obligations that survive the resignation or termination of the
Master Servicer. Any such determination permitting the resignation of the
Master Servicer pursuant to clause (i) above shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee and the Credit
Enhancer. The Master Servicer shall have no claim (whether by subrogation
or otherwise) or other action against any Certificateholder [or the Credit
Enhancer] for any amounts paid by the Master Servicer pursuant to any provision
of this Agreement.
Section 7.05. 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, or any subservicer referred to in
Section 3.01, who agrees to conduct such duties in accordance with standards
comparable to those with which the Master Servicer complies pursuant to Section
3.01. 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 7.04.
Section 7.06. Indemnification of the Trust by the Master Servicer. The
Master Servicer shall indemnify and hold harmless the Trust and the Trustee from
and against any loss, liability, expense, damage or injury suffered or sustained
by reason of the Master Servicer's actions or omissions in servicing or
administering the Mortgage Loans that are not in accordance with this Agreement,
including, but not limited to, any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim. Any such
indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
7.06 shall survive termination of this Agreement.
Section 7.07. Indemnification of the Trust by the Trans- feror.
Notwithstanding anything to the contrary contained herein, the Transferor (i)
agrees to be liable directly to the injured party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than those
attributable to an Investor Certificateholder in the capacity as an investor in
the Investor Certificates as a result of defaults on the Mortgage Loans) to the
extent that the Transferor would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the Transferor was
a general partner and (ii) shall indemnify and hold harmless the Trust and the
Trustee from and against any loss, liability, expense, damage, claim or injury
(other than those attributable to an Investor Certificateholder in the capacity
as an investor in the Investor Certificates as a result of defaults on the
Mortgage Loans) arising out of or based on this Agreement by reason of any acts,
omissions, or alleged acts or omissions arising out of activities of the Trust
or the Trustee, or the actions of the Master Servicer including, but not
limited to, amounts payable to the Master Servicer pursuant to Section 7.03,
any judgment, award, settlement, reasonable attorneys' fees and other costs
or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the Transferor shall
not indemnify the Trustee (but shall indemnify any other injured party) if
such loss, liability, expense, damage or injury is due to the Trustee's
willful malfeasance, bad faith or gross negligence or by reason of the
Trustee's reckless disregard of its obligations hereunder. The provisions of
this indemnity shall run directly to and be enforceable by an injured party
subject to the limitations hereof.
Section 7.08. Limitation on Liability of the Transferor. None of the
directors or officers or employees or agents of the Transferor shall be under
any liability to the Trust, the Trustee or the Certificateholders, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Agreement and
the issuance of the Certificates; provided that this provision shall not protect
any such Person against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or gross negligence in the performance of the
duties hereunder. Except as provided in Section 7.07, the Transferor shall not
be under any liability to the Trust, the Trustee or the Certificateholders for
any action taken or for refraining from the taking of any action in its capacity
as Transferor pursuant to this Agreement whether arising from express or implied
duties under this Agreement; provided that this provision shall not protect the
Transferor against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
hereunder. The Transferor and any director or officer or employee or agent of
the Transferor 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.
ARTICLE VIII
Servicing Termination
Section 8.01. Events of Servicing Termination. If any one
of the following events ("Events of Servicing Termination") shall
occur and be continuing:
(i) Any failure by the Master Servicer to deposit in
the Collection Account any deposit required to be made under the terms
of this Agreement which continues unremedied for a period of five
Business Days (or, if the Master Servicer is permitted to remit
collections on a monthly basis pursuant to Section 3.02(b), three
Business Days) after the date upon which written notice of such failure
shall have been given to the Master Servicer by the Trustee or to the
Master Servicer and the Trustee by [the Credit Enhancer or] Holders of
Investor Certificates evidencing Percentage Interests aggregating not
less than 25%; or
(ii) Failure on the part of the Master Servicer duly to
observe or perform in any material respect any other covenants or
agreements of the Master Servicer set forth in the Certificates or in
this Agreement, which failure materially and adversely affects the
interests of the Certificateholders [or the Credit Enhancer] and
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, and
stating that such notice is a "Notice of Default" hereunder, shall have
been given to the Master Servicer by the Trustee or to the Master
Servicer and the Trustee by the Credit Enhancer or the Holders of
Investor Certificates evidencing Percentage Interests aggregating not
less than 25%; 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 consecutive days; or
(iv) The consent by the Master Servicer to 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 of or
relating to the Master Servicer or of or relating to substantially all
of its property; 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;
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Master Servicer, with respect to
an Event of Servicing Termination specified in (i) through (iv), above, either
the Trustee[, the Credit Enhancer] or the Holders of Investor Certificates
evidencing Percentage Interests aggregating not less than 51% with the consent
of [the Credit Enhancer], by notice then given in writing to the Master Servicer
(and to the Trustee if given by [the Credit Enhancer] or the Holders of Investor
Certificates) may terminate all of the rights and obligations of the Master
Servicer as servicer under this Agreement. Any such notice to the Master
Servicer shall also be given to each Rating Agency [and the Credit Enhancer]. On
or after the receipt by the Master Servicer 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 pursuant to and under this Section 8.01; and,
without limitation, the Trustee 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 in effecting the termination of the responsibilities
and rights of the Master Servicer hereunder, including, without limitation, the
transfer to the Trustee 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, or that have been deposited by the Master Servicer in
the Collection Account or thereafter received by the Master Servicer with
respect to the Mortgage Loans. All reasonable costs and expenses (including
attorneys' fees) 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 8.01 shall be paid by the
predecessor Master Servicer (or if the predecessor Master Servicer is the
Trustee, the initial Master Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 8.01(i) for a period of ten Business Days or under Section
8.01(ii) for a period of 60 Business Days, shall not constitute an Event of
Servicing Termination if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Master Servicer and such delay or
failure was caused by an act of God or the public enemy, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Master Servicer from using its best
efforts to perform its respective obligations in a timely manner in
accordance with the terms of this Agreement and the Master Servicer shall
provide the Trustee, the Transferor[, the Credit Enhancer] and the
Investor Certificateholders with an Officers' Certificate giving prompt
notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Master Servicer shall immediately
notify the Trustee in writing of any Events of Servicing Termination.
Section 8.02. Trustee to Act; Appointment of Successor. (a) On and
after the time the Master Servicer receives a notice of termination pursuant to
Section 8.01 or 7.04, the Trustee shall be the successor in all respects to the
Master Servicer in its capacity as master servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof. Notwithstanding the above, if the
Trustee becomes the Master Servicer hereunder, it shall have no responsibility
or obligation (i) of repurchase or substitution with respect to any Mortgage
Loan, (ii) with respect to any representation or warranty of the Master
Servicer, and (iii) for any act or omission of either a predecessor or successor
Master Servicer other than the Trustee. As compensation therefor, the Trustee
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. In
addition, the Trustee will be entitled to compensation with respect to its
expenses in connection with conversion of certain information, documents and
record keeping, as provided in Section 7.04(b). 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, the Trustee may (in the situation described
in clause (i)) or shall (in the situation described in clause (ii)) 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 $[__________________] 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 any such successor Master Servicer shall be acceptable to the
Credit Enhancer, as evidenced by the Credit Enhancer's prior written consent,
which consent shall not be unreasonably withheld; provided further 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 by the Rating Agencies without regard to the Policy. 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 hereinabove 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 3.08 (or such
lesser compensation as the Trustee and such successor shall agree). 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
master servicer shall during the term of its service as master servicer (i)
continue to service and administer the Mortgage Loans for the benefit of
Certificateholders and the Credit Enhancer and (ii) maintain in force a policy
or policies of insurance covering errors and omissions in the performance of its
obligations as Master Servicer hereunder and 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 3.11. 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
(including, without limitation, any deductible under an insurance policy
pursuant to Section 3.04), 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 their representations or warranties contained
herein.
Section 8.03. Notification to Certificateholders. Upon any termination
or appointment of a successor to the Master Servicer pursuant to this Article
VIII or Section 7.04, the Trustee shall give prompt written notice thereof to
the Certificateholders at their respective addresses appearing in the
Certificate Register, the Credit Enhancer and each Rating Agency.
ARTICLE IX
The Trustee
Section 9.01. Duties of Trustee. The Trustee, prior to the occurrence
of an Event of Servicing Termination and after the curing or waiver of all
Events of Servicing Termination which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Servicing Termination has occurred (which has not been
cured or waived) of which a Responsible Officer has 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 man would
exercise or use under the circumstances in the conduct of his own affairs;
provided that if the Trustee is acting as Master Servicer it shall use the same
degree of care and skill as is required of the Master Servicer under this
Agreement.
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.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided that:
(i) prior to the occurrence of an Event of Servicing
Termination of which a Responsible Officer of the Trustee has
knowledge, and after the curing or waiver of all such Events of
Servicing 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 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 consent or direction of the Credit
Enhancer or in accordance with the direction of the Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than
51% relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Agreement; 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 8.01
or of the occurrence of a Rapid Amortization Event 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, the Credit Enhancer or the
Holders of Investor Certificates evidencing Percentage Interests
aggregating not less than 51%.
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. 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 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 and in no event shall it be required to perform or
accept responsibility for the obligations of the Depositor, the Sponsor or the
Transferor.
Section 9.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 9.01:
(i) the Trustee may request and rely upon, and shall be
protected in acting or refraining from acting upon, any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document 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
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such 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 any of the
Certificateholders or the Credit Enhancer, pursuant to the provisions
of this Agreement, unless such Certificateholders or the Credit
Enhancer 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 wilful misconduct in the performance of any such act;
nothing contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of an Event of Servicing Termination
(which has not been cured or waived) of which a Responsible Officer has
knowledge, to exercise such of the rights and powers vested in it by
this Agreement, and to use the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs, unless it is acting as Master
Servicer;
(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 an Event of Servicing
Termination and after the curing or waiver of all Events of Servicing
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 Holders of Investor
Certificates evidencing Percentage Interests aggregating not less than
51%; provided that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such 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 8.02; and
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through an Affiliate, agents or attorneys or a custodian.
Section 9.03. 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 Depositor, 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. The Trustee shall not be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor or 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 8.02); 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 8.02); the compliance by the
Depositor, the Sponsor 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 non-compliance 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 of any of the Depositor, the Master Servicer
(other than if the Trustee shall assume the duties of the Master Servicer
pursuant to Section 8.02), any subservicer 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 8.02), or any subservicer
taken in the name of the Trustee; the failure of the Master Servicer or
any subservicer 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 8.02); provided 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) or, except as otherwise provided in
Section 3.13, to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Agreement.
Section 9.04. 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 Sponsor, the Master Servicer, the Credit
Enhancer or the Depositor.
Section 9.05. Master Servicer to Pay Trustee's Fees and Expenses;
Master Servicer to Indemnify. The Master Servicer covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the
Master Servicer will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith or which is the
responsibility of Certificateholders hereunder. The Master Servicer covenants
and agrees to indemnify the Trustee from, and hold it harmless against, any and
all losses, liabilities, damages, claims or expenses other than those resulting
from the negligence or bad faith of the Trustee. This section shall survive
termination of this Agreement or the resignation or removal of any Trustee
hereunder.
Section 9.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation 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, having a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by federal or state authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. 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 9.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
9.07.
Section 9.07. 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 Trans- feror, the Depositor, the Master Servicer, the
Credit Enhancer and each Rating Agency. Upon receiving such notice of
resignation, the Transferor shall promptly appoint a successor Trustee (approved
in writing by the Credit Enhancer, so long as such approval is not unreasonably
withheld) by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Trustee (who shall deliver a copy to the
Master Servicer) and one copy to the successor Trustee; provided that any such
successor Trustee shall be subject to the prior written approval of the
Transferor. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Transferor or the Credit Enhancer, 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, or if a tax is imposed or threatened with respect to the Trust by
any state in which the Trustee or the Trust is located (which tax cannot be
vacated by the appointment of a co-Trustee or separate trustee pursuant to
Section 9.10), then the Transferor or the Credit Enhancer may remove the
Trustee. If the Transferor or the Credit Enhancer removes the Trustee under the
authority of the immediately preceding sentence, the Transferor shall promptly
appoint a successor Trustee (approved in writing by the Credit Enhancer, which
approval shall not be unreasonably withheld) 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 Holders of Investor Certificates evidencing Percentage Interests
aggregating over 50% of all Investor Certificates, or the Credit Enhancer may at
any time remove the Trustee by written instrument or instruments delivered to
the Master Servicer, the Transferor and the Trustee; the Transferor shall
thereupon use its best efforts to appoint a successor trustee in accordance with
this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 9.08.
Section 9.08. Successor Trustee. Any successor Trustee appointed as
provided in Section 9.07 shall execute, acknowledge and deliver to the
Transferor, the Depositor, the Master Servicer, the Credit Enhancer 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 Transferor, 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 9.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 9.06.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 9.08, the successor Trustee shall mail notice of the succession of
such Trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to each Rating Agency. If the Master
Servicer fails to mail such notice within 30 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Master Servicer.
Section 9.09. Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be eligible under the provisions of Section 9.06,
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 9.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property may at the time be located, the
Transferor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments necessary to appoint one or more Persons approved by
the Credit Enhancer 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 9.10, such powers, duties,
obligations, rights and trusts as the Transferor 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 Transferor shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case an Event of Servicing 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 9.06 and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 9.08. 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 an Event
of Servicing 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 IX. 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
Transferor 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.
Section 9.11. 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 this
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 9.12. Trustee May Enforce Claims Without Possession of
Certificates. 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. 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 or the Certifi- cateholders in respect of which such
judgment has been recovered.
Section 9.13. Suits for Enforcement. In case an Event of Servicing
Termination or other default by the Master Servicer, the Transferor, the
Depositor or the Sponsor hereunder shall occur and be continuing, the Trustee,
in its discretion, may proceed to protect and enforce its rights and the rights
of the Investor 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, shall deem most effectual to protect and enforce any of the rights of
the Trustee and the Certificateholders.
ARTICLE X
Termination
Section 10.01. Termination. (a) The respective obligations and
responsibilities of the Sponsor, the Master Servicer, the Depositor, the
Transferor 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 the last action required
to be taken by the Trustee on the final Distribution Date pursuant to this
Article X following the later of (A) payment in full of all amounts owing to the
Credit Enhancer and (B) the earliest of (i) the transfer, under the conditions
specified in Section 10.01(b), to the Transferor of the Investor
Certificateholders' interest in each Mortgage Loan and all property acquired in
respect of any Mortgage Loan remaining in the Trust for an amount equal to the
sum of (w) the Investor Certificate Principal Balance, (x) accrued and unpaid
Investor Certificate Interest through the day preceding the final Distribution
Date, and (y) interest accrued on any Unpaid Investor Certificate Interest
Shortfall, to the extent legally permissible, (ii) the day following the
Distribution Date on which the distribution made to Investor Certificateholders
has reduced the Investor Certificate Principal Balance to zero, (iii) the final
payment or other liquidation of the last Mortgage Loan remaining in the Trust
(including without limitation the disposition of the Mortgage Loans pursuant to
Section 10.02) or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan and (iv) the Distribution Date
in ________ ____; provided that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the date 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. Upon termination in
accordance with clause (i) or (ii) of this Section 10.01, the Trustee shall
execute such documents and instruments of transfer presented by the Transferor,
in each case without recourse, representation or warranty, and take such other
actions as the Transferor may reasonably request to effect the transfer of the
Mortgage Loans to the Transferor.
(b) The Transferor shall have the right to exercise the option to
effect the transfer to the Transferor of each Mortgage Loan pursuant to Section
10.01(a) above on any Distribution Date on or after the Distribution Date
immediately prior to which the Investor Certificate Principal Balance is less
than or equal to 10% of the Original Investor Certificate Principal Balance and
all amounts due and owing to the Credit Enhancer for unpaid premiums and
unreimbursed draws on the Policy, together with interest thereon as provided
under the Insurance Agreement, have been paid.
(c) Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
Investor Certificateholders may surrender their Investor Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee (upon receipt of written directions from the Transferor,
if the Transferor is exercising its right to transfer of the Mortgage Loans,
given not later than the first day of the month preceding the month of such
final distribution) to the Credit Enhancer and to the Master Servicer by letter
to Investor 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 (i) the Distribution Date upon which final distribution
of the Investor Certificates will be made upon presentation and surrender of
Investor Certificates at the office or agency of the Trustee therein designated,
(ii) the amount of any such final distribution and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distributions
being made only upon presentation and surrender of the Investor Certificates at
the office or agency of the Trustee therein specified. In the event written
directions are delivered by the Transferor to the Trustee as described in the
preceding sentence, the Transferor shall deposit in the Collection Account on or
before the Distribution Date for such final distribution in immediately
available funds an amount which, when added to the funds on deposit in the
Collection Account that are payable to the Investor Certificateholders, will be
equal to the retransfer amount for the Mortgage Loans computed as above
provided.
(d) Upon presentation and surrender of the Investor Certificates, the
Trustee shall cause to be distributed to the Holders of Investor Certificates on
the Distribution Date for such final distribution, in proportion to the
Percentage Interests of their respective Investor Certificates and to the extent
that funds are available for such purpose, an amount equal to (i) if such final
distribution is not being made pursuant to the transfer to the Transferor
pursuant to Section 10.01(a)(i), the amount required to be distributed to
Investor Certificateholders pursuant to Section 5.01 for such Distribution Date
and (ii) if such final distribution is being made pursuant to such retransfer,
the amount specified in Section 10.01(a)(i). The distribution on such final
Distribution Date pursuant to a retransfer pursuant to Section 10.01(a)(i) shall
be in lieu of the distribution otherwise required to be made on such
Distribution Date in respect of the Certificates. On the final Distribution Date
prior to having made the distributions called for above, the Trustee shall,
based upon the information set forth in the Servicing Certificate for such
Distribution Date, withdraw from the Collection Account and remit to the Credit
Enhancer the lesser of (x) the amount available for distribution on such
final Distribution Date, net of any portion thereof necessary to pay the
amounts described in clauses (d)(i) and (ii) above and (y) the unpaid
amounts due and owing to the Credit Enhancer for unpaid premiums and
unreimbursed draws on the Policy, together with interest thereon as
provided under the Insurance Agreement.
(e) In the event that all of the Investor Certificate- holders shall
not surrender their Investor Certificates for final payment and cancellation on
or before such final Distribution Date, the Trustee shall on such date cause all
funds in the Collection Account not distributed in final distribution to
Investor Certificateholders to be withdrawn therefrom and credited to the
remaining Investor Certificateholders by depositing such funds in a separate
escrow account for the benefit of such Investor Certificateholders and the
Transferor (if the Transferor has exercised its right to transfer the Mortgage
Loans) or the Trustee (in any other case) shall give a second written notice to
the remaining Investor Certificateholders to surrender their Investor
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Investor
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders concerning surrender of their
Investor Certificates, and the cost thereof shall be paid out of the funds on
deposit in such escrow account.
[ARTICLE XI
Rapid Amortization Events
Section 11.01. Rapid Amortization Events. If any one of
the following events shall occur during the Managed Amortization
Period:
(a) failure on the part of the Sponsor (i) to make any payment
or deposit required by the terms of this Agreement, on or before the
date occurring three Business Days after the date such payment or
deposit is required to be made herein, or (ii) to cause the Depositor
to duly observe or perform in any material respect the covenants of the
Depositor set forth in Section 2.05 or (iii) duly to observe or perform
in any material respect any other covenants or agreements of the
Sponsor set forth in this Agreement, which failure, in each case,
materially and adversely affects the interests of the
Certificateholders or the Credit Enhancer and which, in the case of
clause (iii), continues unremedied and continues to affect materially
and adversely the interests of the Certificateholders for a period of
60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Sponsor
by the Trustee, or to the Sponsor and the Trustee by either the Credit
Enhancer or the Holders of Investor Certificates evidencing Percentage
Interests aggregating not less than 51%;
(b) any representation or warranty made by the Sponsor or the
Depositor in this Agreement shall prove to have been incorrect in any
material respect when made, as a result of which the interests of the
Investor Certificateholders or the Credit Enhancer are materially and
adversely affected and which continues to be incorrect in any material
respect and continues to affect materially and adversely the interests
of the Certificateholders or the Credit Enhancer for a period of 60
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Sponsor or the
Depositor, as the case may be, by the Trustee, or to the Sponsor, the
Depositor and the Trustee by either the Credit Enhancer or the Holders
of Investor Certificates evidencing Percentage Interests aggregating
not less than 51%; provided that a Rapid Amortization Event pursuant to
this subparagraph (b) shall not be deemed to have occurred hereunder if
the Sponsor has accepted retransfer of the related Mortgage Loan or
Mortgage Loans or made a substitution therefor during such period (or
such longer period (not to exceed an additional 60 days) as the Trustee
may specify) in accordance with the provisions hereof;
(c) the Transferor or the Depositor 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 Transferor or the Depositor, or of or relating to all
or substantially all of such Person's 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
Transferor or the Depositor and such decree or order shall have
remained in force undischarged or unstayed for a period of 30 days; or
the Transferor or the Depositor 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;
(d) the Trust shall become subject to registration as an
"investment company" under the Investment Company Act of 1940, as
amended; or
(e) the aggregate of all draws under the Policy exceeds 1% of
the Cut-off Date Pool Balance;
then, in the case of any event described in subparagraph (a) or (b) after the
applicable grace period, if any, set forth in such subparagraphs, either the
Trustee, the Credit Enhancer or the Holders of Investor Certificates evidencing
Percentage Interests aggregating more than 51%, by notice given in writing to
the Transferor, the Depositor and the Master Servicer (and to the Trustee if
given by either the Credit Enhancer or the Investor Certificateholders) may
declare that an early amortization event (a "Rapid Amortization Event") has
occurred as of the date of such notice, and in the case of any event described
in subpara- graph (c), (d) or (e), a Rapid Amortization Event shall occur
without any notice or other action on the part of the Trustee, the Credit
Enhancer or the Investor Certificateholders, immediately upon the occurrence of
such event.]
ARTICLE XII
Miscellaneous Provisions
Section 12.01. Amendment. This Agreement may be amended from time to
time by the Sponsor, the Master Servicer, the Depositor and the Trustee, in each
case without the consent of any of the Certificateholders, [but only with the
consent of the Credit Enhancer (which consent shall not be unreasonably
withheld),] (i) to cure any ambiguity or mistake, (ii) to correct any defective
provision herein or to supplement any provision herein which may be inconsistent
with any other provisions herein, (iii) to add to the duties of the Sponsor, the
Depositor, the Transferor or the Master Servicer, (iv) to add any other
provisions with respect to matters or questions arising under this Agreement [or
the Policy, as the case may be,] or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions of this Agreement; provided that any such
action pursuant to clause (iv) or (v) shall not, as evidenced by an Opinion of
Counsel (which Opinion of Counsel shall not be an expense of the Trustee or the
Trust Fund), adversely affect in any material respect the interests of any
Certificateholder [or the Credit Enhancer]; provided further that any such
amendment referred to in the preceding proviso shall not be deemed to adversely
affect in any material respect the interests of the Certificateholders and no
opinion referred to in the preceding proviso shall be required to be delivered
if the Person requesting the amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal of
the respective ratings then assigned to the Investor Certificates without regard
to the Policy.
This Agreement also may be amended from time to time by the Master
Servicer, the Sponsor, the Depositor and the Trustee[, and the Master Servicer
and the Credit Enhancer, may from time to time consent to the amendment of the
Policy,] with the consent of the Holders of the Investor Certificates evidencing
Percentage Interests aggregating not less than 51%, [and in the case of an
amendment to this Agreement, with the consent of the Credit Enhancer,] 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 Certificateholders; provided that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments on the Certificates or
distributions or payments under the Policy which are required to be made on any
Certificate without the consent of the Holder of such Certificate, (ii) (A)
adversely effect in any material respect the interests of the Credit Enhancer,
without the consent of the Credit Enhancer] or (B) adversely effect in any
material respect the interests of the Holders of any Class of Certificates in
any other than as described in clause (i) above, without the consent of Holders
of Certificates of such Class evidencing, as to such Class, Percentage Interests
aggregating not less than 66% or (iii) reduce the aforesaid percentage required
to consent to any such amendment, without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any REMIC or the Certificateholders or cause
any REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder, each Rating Agency and the Credit Enhancer.
It shall not be necessary for the consent of
Certificateholders under this Section 12.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 12.01.
Section 12.02. Recordation of Agreement. 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
Trustee, but only upon direction of Investor Certificate- holders accompanied by
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Investor Certificateholders. The Investor
Certificate- holders requesting such recordation shall bear all costs and
expenses of such recordation. The Trustee shall have no obligation to ascertain
whether such recordation so 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 constitute but one and
the same instrument.
Section 12.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Investor Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Investor Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
in Sections 8.01, 9.01, 9.02, 11.01 and 12.01) 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
Investor 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 or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Investor Certificates evidencing Percentage Interests
aggregating not less than 51% shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other Certifi-
cateholder and the Trustee, that no one or more Holders of Certificates shall
have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder, or to enforce
any right under this Agreement, except in the manner herein provided and for
the equal, ratable and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 12.03, each and
every Certificate- holder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
By accepting its Investor Certificate, each Investor Certif-
icateholder agrees that unless a Credit Enhancer Default exists, the Credit
Enhancer shall have the right to exercise all rights of the Investor
Certificateholders under this Agreement without any further consent of the
Investor Certificateholders.
Section 12.04. Governing Law. THIS AGREEMENT SHALL BE CON-
STRUED 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.
Section 12.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified mail, return receipt requested,
to (a) in the case of the Depositor, 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Legal Department, (b) in the case of the Master Servicer,
___________________________ Attention: (c) in the case of the Trustee, at the
Corporate Trust Office, (d) in the case of the Credit Enhancer,
__________________________________________, Attention: _______________ (telecopy
number _______________), [(e) in the case of Xxxxx'x, Residential Loan
Monitoring Group, 4th Floor, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (f)
in the case of Standard & Poor's, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,] or, as
to each party, at such other address as shall be designated by such party in a
written notice to each other party. In each case in which a notice or other
communication to the Credit Enhancer refers to an Event of Servicing Termination
or a claim under the Policy or with respect to which failure on the part of the
Credit Enhancer to respond shall be deemed to constitute consent or acceptance,
then a copy of such notice or other communication should also be sent to the
attention of the General Counsel and shall be marked to indicate "URGENT
MATERIAL ENCLOSED." Any notice required 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. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice. Any notice or other document required to be delivered or mailed by
the Trustee to any Rating Agency shall be given on a best efforts basis and only
as a matter of courtesy and accommodation and the Trustee shall have no
liability for failure to deliver such notice or document to any Rating Agency.
Section 12.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 12.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.05, 7.02 and 7.04, this
Agreement may not be assigned by the Depositor or the Master Servicer without
the prior written consent of the Credit Enhancer and Holders of the Investor
Certificates evidencing Percentage Interests aggregating not less than 66%.
Section 12.08. Certificates Nonassessable and Fully Paid. The parties
agree that the Investor Certificateholders shall not be personally liable for
obligations of the Trust, that the beneficial ownership interests represented by
the Certificates shall be nonassessable for any losses or expenses of the Trust
or for any reason whatsoever, and that the Certificates upon execution,
authentication and delivery thereof by the Trustee pursuant to Section 2.08 or
6.02 are and shall be deemed fully paid.
Section 12.09. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders,
the Certificate Owners, the Credit Enhancer and their respective successors and
permitted assigns. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder.
Section 12.10. Counterparts. This instrument may be
executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 12.11. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
IN WITNESS WHEREOF, the Depositor, the Sponsor, the Master
Servicer and the Trustee have caused this Agreement to be duly executed by their
respective officers all as of the day and year first above written.
INDYMAC ABS,
as Depositor
By:
------------------------------
Name:
Title:
as Sponsor and Master Servicer
By:
------------------------------
Name:
Title:
as Trustee
By:
------------------------------
Name:
Title:
State of New York )
) ss.:
County of New York )
On the ___th day of ________, 199_ before me, a notary public
in and for the State of New York, personally appeared ____________, known to me
who, being by me duly sworn, did depose and say that he resides at
_________________________________, __________; that he is the Vice President of
IndyMac ABS, a Delaware corporation, one of the parties that executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he signed his name
thereto by like order.
------------------------------
Notary Public
[Notarial Seal]
State of New York )
) ss.:
County of New York )
On the __th day of ________, 199_ before me, a notary public
in and for the State of ________, personally appeared _____________________,
known to me who, being by me duly sworn, did depose and say that he resides at
_________________, ____________, ________ _____; that he is the ______________
of __________________________________, a _________________________, one of the
parties that executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation;
and that he signed his name thereto by like order.
------------------------------
Notary Public
[Notarial Seal]
State of New York )
) ss.:
County of New York )
On the __th day of ________, 199_ before me, a notary public
in and for the State of New York, personally appeared ____________, known to me
who, being by me duly sworn, did depose and say that he resides at
_________________, ________________; that he is the Executive Vice President of
____________________________, a ________ corporation, one of the parties that
executed the foregoing instrument; and that he signed his name thereto by order
of the Board of Directors of said corporation.
------------------------------
Notary Public
[Notarial Seal]
Exhibit A
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE TRUSTEE OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Original Investor
Certificate Principal Balance
of this Investor
Certificate : $___________
Certificate Rate: : Variable
Initial Aggregate Investor
Certificate Principal Balance
of all Investor Certificates $
CUSIP No. : ____________
Date of Pooling
and Servicing
Agreement : ________ __, ____
Certificate No. : __
Cut-Off Date : ________ __, ____
First Distribution
Date: : ________ __, ____
HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 199_-_
INVESTOR CERTIFICATE
evidencing a percentage interest in the distributions
allocable to the Investor Certificates evidencing an undivided
interest in a Trust consisting primarily of a pool of
adjustable rate home equity revolving credit line mortgage
loans sold by
INDYMAC ABS, INC.
This Certificate does not represent an obligation of or interest in
IndyMac ABS, Inc. (the "Depositor"), [__________________________] or the Trustee
referred to below or any of their affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Original Investor Certificate Principal Balance of this Certificate by the
aggregate Original Investor Certificate Principal Balance of all Investor
Certificates) in certain monthly distributions with respect to a Trust
consisting primarily of a pool of mortgage loans (the "Mortgage Loans"),
transferred by the Depositor to the Trustee and serviced by
[__________________________] (in such capacity, the "Master Servicer", including
any successor Master Servicer under the Agreement referred to below). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as specified
above (the "Agreement") among the Depositor, the Master Servicer,
[__________________________], as sponsor (in such capacity, the "Sponsor"), and
__________________________________, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, 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.
This Certificate is one of the Investor Certificates from a duly
authorized issue of Certificates designated as Home Equity Loan Asset Backed
Certificates, Series 199_-_, representing, to the extent specified in the
Agreement, an undivided interest in: (i) each Mortgage Loan including its Asset
Balance (including all Additional Balances) and all collections in respect
thereof received after the Cut-off Date (excluding payments in respect of
accrued interest due on or prior to the Cut-Off Date), (ii) property that
secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of
foreclosure, (iii) an irrevocable and unconditional limited financial guarantee
insurance policy (the "Policy"), (iv) the Depositor's rights under the hazard
insurance policies in respect of the Mortgage Loans, (v) an assignment of the
Depositor's rights under the purchase agreement dated as of ___________, ____
between the Sponsor, as seller, and the Depositor, as purchaser (collectively,
the "Trust Assets") and (vi) certain other property described in the Agreement.
Distributions on this Certificate will be made by the Trustee, or by
the Paying Agent, if any, appointed pursuant to the Agreement, by check mailed
to the Person entitled thereto as such name and address shall appear on the
Certificate Register or, upon written request by such Person delivered to the
Trustee at least five Business Days prior to the related Record Date, by
wire transfer (but only if such Person owns of record one or more Investor
Certificates having principal denominations aggregating at least
$[__________________]), or by such other means of payment as such
Person and the Trustee shall agree. Notwithstanding the above, the
final distribution on this Certificate will be made after due notice by the
Trustee or the Paying Agent, if one has been appointed, of the pendency
of such distribution, and only upon presentation and surrender of this
Certificate at the office or agency appointed by the Trustee for that purpose.
Pursuant to the terms of the Agreement, a distribution will be
made on the 15th day of each month or if such day is not a Business Day, then on
the next succeeding Business Day (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day preceding
such Distribution Date (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 Holders of Investor Certificates on such Distribution Date
under the terms of the Agreement. Notwithstanding the foregoing, if Definitive
Certificates have become available pursuant to the Agreement, the Record Date
shall be the last day of the calendar month preceding the month of such
Distribution Date.
The Certificates are limited in right of payment to certain
payments on and collections in respect of the Mortgage Loans, all as more
specifically set forth in the Agreement. The Certificateholder, by its
acceptance of this Certificate, agrees that it will look solely to the funds on
deposit in the Collection Account for payment hereunder, and that the Trustee in
its individual capacity is not personally liable to the Certificateholders for
any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
As provided in the Agreement, withdrawals from the Collection
Account may be made from time to time for purposes other than distributions to
the Investor Certificateholders and, subject to certain conditions in the
Agreement, Mortgage Loans may, at the election of the Transferor, be removed
from the Trust and transferred to the Transferor (as defined in the Agreement).
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
It is the intention of the Transferor, the Depositor
and the Investor Certificateholders that the Investor Certificates will be
indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income.
The Depositor, the Trustee and the Holder of this Certificate for
Certificate Owner) by acceptance of this Certificate (or, in the case
of a Certificate Owner, by virtue of such Certificate Owner's
acquisition of a beneficial interest herein) agrees to treat the
Investor Certificates (or beneficial interest therein), for purposes of
federal, state and local income or franchise taxes and any other tax
imposed on or measured by income, as indebtedness secured by the
Trust Assets and to report the transactions contemplated by the
Agreement on all applicable tax returns in a manner consistent with
such treatment. Each Holder of this Certificate agrees that it will cause
any Certificate Owner acquiring an interest in this Certificate through
it to comply with the Agreement as to treatment as indebtedness for
federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor, the Master Servicer, the Depositor and the Trustee, and the rights of
the Certificateholders under the Agreement, at any time by the Sponsor, the
Master Servicer, the Depositor and the Trustee with the consent (i) of the
Holders of Investor Certificates evidencing Percentage Interests aggregating not
less than 51% and (ii) of the Credit Enhancer. 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 Investor Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Certificate
Registrar for such purpose, accompanied by a written instrument of transfer in
form satisfactory to the Master Servicer, 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 authorized
denominations, if applicable, and evidencing the same aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of a like tenor in authorized
denominations (in the case of the Investor Certificates) and 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, but the Trustee or the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Sponsor, the Master Servicer, the Depositor, the
Credit Enhancer and the Certificate Registrar and any agent of the foregoing may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and neither the Trustee, the Sponsor, the Master
Servicer, the Depositor, the Credit Enhancer, the Certificate Registrar nor any
such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (i) payment in
full of all amounts owing to the Credit Enhancer and (ii) the earliest of (a)
the transfer, under the conditions specified in the Agreement, to the Transferor
(as defined in the Agreement) of the interest of the Holders of the Investor
Certificates in each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust, (b) the day following the Distribution
Date on which distributions reduce the Investor Certificate Principal Balance to
zero, (c) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust and (d) the Distribution Date in ________ ____. The
Transferor may effect an early retirement of the Certificates by paying the
retransfer price and accepting retransfer of the Trust Assets pursuant to the
terms of the Agreement on any Distribution Date after the Investor Certificate
Principal Balance is less than or equal to 10% of the Original Investor
Certificate Principal Balance; provided, however, that in no event shall the
Trust continue beyond the expiration of 21 years from the death of certain
person named in the Agreement. Upon retirement of the Certificates in accordance
with Section 10.01 of the Agreement, the Trustee shall execute such documents
and instruments of transfer presented by the Transferor and take such other
actions as the Transferor may reasonably request to effect the retransfer of the
Mortgage Loans to the Transferor.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual or facsimile signature, this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
----------------------------------,
not in its individual capacity
but solely as Trustee on behalf of
the Trust
By:
Certificate of Authentication:
This is one of the Investor
Certificates referenced in the
within-mentioned Agreement.
By:
--------------------------
Authorized Officer
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 WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 6.05 OF THE AGREEMENT REFERRED TO HEREIN. NEITHER THIS
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE
DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, THAT IF SUCH TRANSFEREE IS AN INSURANCE
COMPANY THAT THE TRANSFEREE IS AN INSURANCE COMPANY WHICH IS PURCHASING THIS
CERTIFICATE WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS
SUCH TERM IS DEFINED IN SECTION V(e) OF PROHIBITED TRANSACTION CLASS EXEMPTION
95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER PTCE 95-60 OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR AN
OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF SECTION 6.05(d) OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Date of Pooling and Servicing
Agreement: : ________ __, ____
Cut-off Date : ________ __, ____
Percentage Interest : 100%
Certificate No. : __
First Distribution Date : ________ __, ____
HOME EQUITY LOAN ASSET BACKED CERTIFICATES,
SERIES 199_-_
TRANSFEROR CERTIFICATE
evidencing a percentage interest in the distributions
allocable to the Transferor Certificates evidencing an
undivided interest in a Trust consisting primarily of a pool
of adjustable rate home equity revolving credit line mortgage
loans sold by
INDYMAC ABS, INC.
This Certificate does not represent an obligation of or interest in
IndyMac ABS, Inc. (the "Depositor"), [__________________________] or the Trustee
referred to below or any of their affiliates. Neither this Certificate nor the
underlying Assets are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that ____________________________ is the registered
owner of the Percentage Interest evidenced by this Certificate in the entire
interest not allocated to the Investor Certificates in certain monthly
distributions with respect to a Trust consisting primarily of a pool of mortgage
loans (the "Mortgage Loans"), transferred by the Depositor and serviced by
[__________________________] (in such capacity, the "Master Servicer", including
any successor Master Servicer under the Agreement referred to below). The Trust
was created pursuant to a Pooling and Servicing Agreement dated as specified
above (the "Agreement") among the Depositor, the Master Servicer, as sponsor and
as master servicer (the "Sponsor" or the "Master Servicer," as appropriate), and
__________________________________, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, 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.
This Certificate is one of the Transferor Certificates from a duly
authorized issue of Certificates designated as Revolving Home Equity Loan Asset
Backed Certificates, Series 199_-_, representing, to the extent specified in the
Agreement, an undivided interest in: (i) each Mortgage Loan including its Asset
Balance (including all Additional Balances) and all collections in respect
thereof received after the Cut-off Date (excluding payments in respect of
accrued interest due on or prior to the Cut-off Date), (ii) property that
secured a Mortgage Loan that is acquired by foreclosure or deed in lieu of
foreclosure, (iii) the Depositor's rights under the hazard insurance policies in
respect of the Mortgage Loans, (iv) an assignment of the Depositor's rights
under the purchase agreement dated as of ___________, ____ between the Sponsor,
as seller, and the Depositor, as purchaser, and (v) certain other property
described in the Agreement (collectively, the "Trust Assets").
The certificates are limited in right of payment to certain payments on
and collections in respect of the Trust Assets, all as more specifically set
forth in the Agreement. The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds available in
accordance with the terms of the Agreement for payment hereunder and that the
Trustee in its individual capacity is not personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Sponsor, the Master Servicer, the Depositor and the Trustee, and the rights of
the Certificateholders under the Agreement, at any time by the Sponsor, the
Master Servicer, the Depositor and the Trustee with the consent (i) of the
Holders of Investor Certificates evidencing Percentage Interests aggregating not
less than 51% and (ii) of the Credit Enhancer. 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 hereof 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 Investor Certificates.
No transfer of this Transferor Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. There shall be delivered to the Trustee
either (i) an investment letter acceptable to and in form and substance
satisfactory to the Trustee certifying to the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee, or (ii) if such letter is not delivered, an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Depositor that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, which Opinion of Counsel
shall not be an expense of the Trustee. The Holder hereof desiring to effect
such Transfer shall, and does hereby agree to, indemnify the Transferor 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.
As provided in the Agreement and subject to certain limitations set
forth therein, and subject to the restrictions set forth on the first page
hereof, neither this Certificate nor any legal or beneficial interest herein may
be, directly or indirectly, purchased, transferred, sold, pledged, assigned or
otherwise disposed of, and any proposed transferee hereof shall not become the
registered Holder hereof, without the satisfaction of the conditions set forth
in Section 6.05 of the Agreement.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Trustee, the Master Servicer, the Depositor, the Credit Enhancer
and the Certificate Registrar and any agent of the foregoing may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Trustee, the Master Servicer, the Depositor, the
Credit Enhancer, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon distribution to the
Certificateholders, or provision therefor, of the amount required to be so
distributed in accordance with the Agreement upon the later of (i) payment in
full of all amounts owing to the Credit Enhancer and (ii) the earliest of (a)
the transfer, under the conditions specified in the Agreement, to the Transferor
(as defined in the Agreement) of the interest of the Holders of the Investor
Certificates in each Mortgage Loan and all property acquired in respect of any
Mortgage Loan remaining in the Trust, (b) the day following the Distribution
Date on which distributions reduce the Investor Certificate Principal Balance to
zero, (c) the final payment or other liquidation of the last Mortgage Loan
remaining in the Trust or (d) the Distribution Date in ________ ____. The
Transferor may effect an early retirement of the Certificates by paying the
retransfer price and accepting retransfer of the Trust Assets pursuant to
the terms of the Agreement on any Distribution Date after the Investor
Certificate Principal Balance is less than or equal to 10% of the
Original Investor Certificate Principal Balance; provided, however, that in no
event shall the Trust continue beyond the expiration of 21 years from the death
of certain person named in the Agreement. Upon retirement of the Certificates in
accordance with Section 10.01 of the Agreement, the Trustee shall execute such
documents and instruments of transfer presented by the Transferor and take such
other actions as the Transferor may reasonably request to effect the retransfer
of the Mortgage Loans to the Transferor.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual or facsimile signature this Certificate
shall not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
----------------------------------,
not in its individual capacity but
solely as Trustee on behalf of the
Trust
----------------------------------
Authorized Officer
Certificate of Authentication:
This is one of the Transferor
Certificates referenced in the
within-mentioned Agreement.
By:
----------------------------
Authorized Officer
EXHIBIT C
MORTGAGE LOAN SCHEDULE
[Delivered to Trustee Only]
EXHIBIT D
FORM OF CREDIT LINE AGREEMENT
Exhibit E
FORM OF LETTER OF REPRESENTATIONS
Exhibit F
FORM OF INVESTMENT LETTER [NON-RULE 144A]
FOR TRANSFEROR CERTIFICATES
Date:
IndyMac ABS, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: ________________
----------------------------------
as Trustee
Attn:
Re: IndyMac ABS, Inc.;
Home Equity Loan Trust 199_-_,
Home Equity Loan Asset Backed Certificates,
Series 199_-_, Transferor Certificates
Ladies and Gentlemen:
In connection with our acquisition of Transferor Certificates in the
Denomination of , we certify that (a) we understand that the Transferor
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we are an "accredited investor," as defined in Regulation
D under the Act, and have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investments in the Transferor Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Transferor Certificates and all matters relating thereto or any
additional information deemed necessary to our decision to purchase the
Transferor Certificates, (d) either (i) we are not an employee benefit plan that
is subject to the Employee Retirement Income Security Act of 1974, as amended,
nor a plan subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such employee benefit plan, or (ii)
if we are an insurance company, a representation that we are an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under PTCE 95-60, (e) we
are acquiring the Transferor Certificates for investment for our own account and
not with a view to any distribution of such Certificates (but without prejudice
to our right at all times to sell or otherwise dispose of the Transferor
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Transferor Certificates to, or solicited offers to buy any Transferor
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action which would result in a
violation of Section 5 of the Act, and (g) we will not sell, transfer or
otherwise dispose of any Transferor Certificates unless (1) such sale, transfer
or other disposition is made pursuant to an effective registration statement
under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Transferor Certificate that such sale, transfer or other
disposition) may be made pursuant to an exemption from the Act, (2) the
purchaser or transferee of such Transferor Certificate has executed and
delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement dated
as of ___________, ____ (the "Agreement"), among IndyMac ABS, Inc. as Depositor,
____________________________, as Master Servicer, and
____________________________, as Trustee. All capitalized terms used herein but
not defined herein shall have the meanings assigned to them in the Agreement.
Very truly yours,
--------------------------------
Name of Transferee
By:
---------------------------
Name:
Title:
FORM OF INVESTMENT LETTER RULE 144A LETTER
FOR TRANSFEROR CERTIFICATES
Date:
IndyMac ABS, Inc.
as Depositor
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: ________________
----------------------------------
as Trustee
Attn:
Re: IndyMac ABS, Inc.;
Home Equity Loan Trust 199_-_,
Home Equity Loan Asset Backed Certificates,
Series 199_-_, Transferor Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Transferor
Certificates, we certify that (a) we understand that the Transferor Certificates
are not being registered under the Securities Act of 1933, as amended (the
"Act"), or any state securities laws and are being transferred to us in a
transaction that is exempt from the registration requirements of the Act and any
such laws, (b) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of investments in
the Transferor Certificates, (c) we have had the opportunity to ask questions of
and receive answers from the Depositor concerning the purchase of the Transferor
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Transferor Certificates, (d)
either (i) we are not an employee benefit plan that is subject to the Employee
Retirement Income Security Act of 1974, as amended, nor a plan subject to
Section 4975 of the Internal Revenue Code of 1986, nor are we acting on behalf
of any such employee benefit plan, or (ii) if we are an insurance company, a
representation that we are an insurance company which is purchasing such
Certificates with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and that the purchase and holding of such Certificates are
covered under PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Transferor
Certificates, any interest in the Transferor Certificates or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Transferor Certificates, any interest in the Transferor
Certificates or any other similar security from, or otherwise approached
or negotiated with respect to the Transferor Certificates, any interest
in the Transferor Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Transferor Certificates under the Act
or that would render the disposition of the Transferor Certificates a
violation of Section 5 of the Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person
to act, in such manner with respect to the Transferor Certificates and
(f) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Transferor Certificates for our own account or for resale pursuant to Rule 144A
and further, understand that such Transferor Certificates may be resold, pledged
or transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Act. All capitalized terms used herein but
not defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of ___________, ____ among IndyMac ABS, Inc. as
Depositor, ____________________________, as Sponsor Master Servicer, and
____________________________, as Trustee.
Name of Buyer
By:_______________________
Name:
Title:
ANNEX 1 TO Exhibit F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Transferor Certificates described
therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive
officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $ 1 in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A and (ii) the
Buyer satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the state or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
_______________________
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
---------- Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
---------- Broker-dealer. The Buyer is a dealer
registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
---------- Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
----------- State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions for the benefit of its employees.
----------- ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of
1974.
----------- Investment Advisor. The Buyer is an
investment advisor registered under the
Investment Advisors Act of 1940.
---------- Small Business Investment Company. The Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
----------- Business Development Company. The Buyer is a
business development company as defined in
Section 202(a)(22) of the Investment Advisors Act of 1940.
----------- Trust Fund. The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively State
or Local Plans or ERISA Plans as defined above, and no
participant of the Buyer is an individual retirement account
or an H.R. 10 (Xxxxx) plan.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Transferor
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Transferor Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan as provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
---------------------------------
Name of Buyer
By:
-----------------------------
Name:
Title:
Date:
ANNEX 2 TO Exhibit F
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees that are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Transferor Certificates described
therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
qualified institutional buyer as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information With respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
----------- The Buyer owned $____________ in securities (other than
the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount
being calculated in accordance With Rule 144A).
------------ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) bank deposit notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Transferor Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Transferor Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
-------------------------------
Name of Buyer
By:
----------------------------
Name:
Title:
IF AN ADVISER:
----------------------------------
Name of Adviser
Date:
Exhibit G
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
----------------------------------
as Trustee
Attn:
Re: IndyMac ABS, Inc. Home Equity Loan
Asset Backed Certificates, Series 199_-_
Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee under the Pooling and Servicing Agreement dated as of ___________,
____, among IndyMac ABS, Inc. as Depositor, [__________________________], as
Sponsor and Master Servicer, and you, as Trustee (the "Agreement"), we hereby
request a release of the Mortgage File held by you as Trustee with respect to
the following described Mortgage Loan for the reason indicated below.
Loan No.:
Reason for requesting file:
-------- 1. Mortgage Loan paid in full. (The Master Servicer hereby
certifies that all amounts received in connection with the
payment in full of the Mortgage Loan which are required to be
deposited in the Collection Account pursuant to Section 3.02
of the Agreement have been so deposited).
-------- 2. Retransfer of Mortgage Loan. (The Master Servicer hereby
certifies that the Transfer Deposit Amount has been deposited
in the Collection Account pursuant to the
Agreement).
-------- 3. The Mortgage Loan is being foreclosed.
-------- 4. The Mortgage Loan is being re-financed by another depository
institution. (The Master Servicer hereby certifies that all
amounts received in connection with the payment in full of the
Mortgage Loan which are required to be deposited in the
Collection Account pursuant to Section 3.02 of the Agreement
have been so deposited).
5. Other (Describe).
The undersigned acknowledges that the above Mortgage File will be held
by the undersigned in accordance with the provisions of the Agreement and will
promptly be returned to the Trustee when the need therefor by the Master
Servicer no longer exists unless the Mortgage Loan has been liquidated or
retransferred.
Capitalized terms used herein shall have the meanings ascribed to them
in the Agreement.
[-------------------------]
By:
------------------------------
Name:
Title: Servicing Officer
