EXHIBIT 4.1
WACHOVIA ASSET FUNDING TRUST, LLC,
as Depositor,
[ ],
as Servicer,
and
[ ],
as Trustee
POOLING AND SERVICING AGREEMENT
Dated, [ ] [ ], 200
_______________________
Mortgage Pass-Through Certificates
Series 200 -
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT............................................................................................1
ARTICLE I DEFINITIONS................................................................................3
Section 1.01. Defined Terms.....................................................................3
Section 1.02. Interest Calculations............................................................25
ARTICLE II CONVEYANCE OF MORTGAGE LOANS ORIGINAL ISSUANCE OF CERTIFICATES............................25
Section 2.01. Conveyance of Mortgage Loans.....................................................25
Section 2.02. Acceptance by the Trustee of the Mortgage Loans..................................28
Section 2.03. Representations, Warranties and Covenants of the Servicer........................30
Section 2.04. Representations and Warranties of the Depositor as to the Mortgage Loans.........31
Section 2.05. Designation of Interests in the REMIC............................................39
Section 2.06. Designation of Start-up Day......................................................39
Section 2.07. REMIC Certificate Maturity Date..................................................39
Section 2.08. Execution and Delivery of Certificates...........................................39
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................................39
Section 3.01. Servicer to Service Mortgage Loans...............................................39
Section 3.02. Subservicing; Enforcement of the Obligations of Servicer.........................40
Section 3.03. Fidelity Bond; Errors and Omissions Insurance....................................41
Section 3.04. Access to Certain Documentation..................................................42
Section 3.05. Maintenance of Primary Mortgage Insurance Policy; Claims.........................42
Section 3.06. Rights of the Depositor and the Trustee in Respect of the Servicer...............43
Section 3.07. Trustee to Act as Servicer.......................................................43
Section 3.08. Collection of Mortgage Loan Payments; Servicer Custodial Account;
Certificate Account; and Upper-Tier Certificate Account..........................44
Section 3.09. Collection of Taxes, Assessments and Similar Items; Escrow Accounts..............47
Section 3.10. Access to Certain Documentation and Information Regarding the Mortgage
Loans............................................................................48
Section 3.11. Permitted Withdrawals from the Servicer Custodial Account; Certificate
Account and Upper-Tier Certificate Account.......................................48
Section 3.12. Maintenance of Hazard Insurance..................................................50
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption Agreements........................51
Section 3.14. Realization Upon Defaulted Mortgage Loans; REO Property..........................52
Section 3.15. Trustee to Cooperate; Release of Mortgage Files..................................55
Section 3.16. Documents, Records and Funds in Possession of the Servicer to be Held for
the Trustee......................................................................56
Section 3.17. Servicing Compensation...........................................................56
Section 3.18. Advances.........................................................................57
Section 3.19. Modifications, Waivers, Amendments and Consents..................................57
ARTICLE IV SERVICER’S CERTIFICATE and 1934 ACT REPORTING.............................................59
Section 4.01. Servicer’s Certificate...........................................................59
Section 4.02. Reports to the Securities and Exchange Commission................................59
Section 4.03. Annual Xxxxxxxx-Xxxxx Certification..............................................59
Section 4.04. Annual Servicing Criteria Assessment Report......................................60
Section 4.05. Annual Independent Public Accountants’ Attestation...............................60
Section 4.06. Annual Statement as to Compliance................................................60
Section 4.07. Required Information for Form 10-D...............................................61
ARTICLE V PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS; REMIC ADMINISTRATION......................61
Section 5.01. Distributions....................................................................61
Section 5.02. Priorities of Distributions......................................................62
Section 5.03. Allocation of Losses.............................................................65
Section 5.04. Statements to Certificateholders.................................................66
Section 5.05. Tax Returns and Reports to Certificateholders....................................69
Section 5.06. Tax Matters Person...............................................................70
Section 5.07. Rights of the Tax Matters Person in Respect of the Trustee.......................70
Section 5.08. REMIC Related Covenants..........................................................70
Section 5.09. Determination of LIBOR...........................................................71
ARTICLE VI THE CERTIFICATES..........................................................................72
Section 6.01. The Certificates.................................................................72
Section 6.02. Registration of Transfer and Exchange of Certificates............................72
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates................................77
Section 6.04. Persons Deemed Owners............................................................77
ARTICLE VII THE DEPOSITOR AND THE SERVICER............................................................77
Section 7.01. Respective Liabilities of the Depositor and the Servicer.........................77
Section 7.02. Merger or Consolidation of the Depositor or the Servicer.........................77
Section 7.03. Limitation on Liability of the Depositor, the Servicer and Others................78
Section 7.04. Depositor and Servicer Not to Resign.............................................78
ARTICLE VIII DEFAULT...................................................................................79
Section 8.01. Events of Default................................................................79
Section 8.02. Remedies of Trustee..............................................................80
Section 8.03. Directions by Certificateholders and Duties of Trustee During Event of
Default..........................................................................80
Section 8.04. Action upon Certain Failures of the Servicer and upon Event of Default...........81
Section 8.05. Trustee to Act; Appointment of Successor.........................................81
Section 8.06. Notification to Certificateholders...............................................82
ARTICLE IX THE TRUSTEE...............................................................................82
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............................84
Section 9.04. Trustee May Own Certificates.....................................................86
Section 9.05. Eligibility Requirements for Trustee.............................................86
Section 9.06. Resignation and Removal of Trustee...............................................86
Section 9.07. Successor Trustee................................................................87
Section 9.08. Merger or Consolidation of Trustee...............................................87
Section 9.09. Appointment of Co-Trustee or Separate Trustee....................................87
Section 9.10. Authenticating Agents............................................................88
Section 9.11. Trustee’s Fees and Expenses......................................................89
Section 9.12. Appointment of Custodian.........................................................90
Section 9.13. Paying Agents....................................................................90
Section 9.14. Limitation of Liability..........................................................91
Section 9.15. Trustee May Enforce Claims Without Possession of Certificates....................91
Section 9.16. Suits for Enforcement............................................................91
Section 9.17. Waiver of Bond Requirement.......................................................91
Section 9.18. Waiver of Inventory, Accounting and Appraisal Requirement........................91
ARTICLE X TERMINATION...............................................................................92
Section 10.01. Termination upon Purchase by the Depositor or Liquidation of All Mortgage
Loans............................................................................92
Section 10.02. Additional Termination Requirements..............................................93
ARTICLE XI COMPLIANCE WITH REGULATION AB.............................................................94
Section 11.01. Intent of the Parties; Reasonableness............................................94
Section 11.02. Additional Representations and Warranties of the Trustee.........................94
Section 11.03. Information to Be Provided by the Trustee........................................95
Section 11.04. Report on Assessment of Compliance and Attestation...............................95
Section 11.05. Indemnification Remedies.........................................................96
ARTICLE XII MISCELLANEOUS PROVISIONS..................................................................96
Section 12.01. Amendment........................................................................96
Section 12.02. Recordation of Agreement.........................................................98
Section 12.03. Limitation on Rights of Certificateholders.......................................98
Section 12.04. Governing Law....................................................................99
Section 12.05. Notices..........................................................................99
Section 12.06. Severability of Provisions.......................................................99
Section 12.07. Certificates Nonassessable and Fully Paid........................................99
Section 12.08. Access to List of Certificateholders.............................................99
Section 12.09. Recharacterization..............................................................100
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of 1-A-R Certificate
Exhibit B Form of Class X-0, X-0 and B-3 Certificate
Exhibit C Form of Class X-0, X-0 and B-6 Certificate
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release of Documents
Exhibit F Form of Certification of Establishment of Account
Exhibit G-1 Form of Transferor’s Certificate
Exhibit G-2A Form 1 of Transferee’s Certificate
Exhibit G-2B Form 2 of Transferee’s Certificate
Exhibit H Form of Transferee Representation Letter for ERISA Restricted Certificates
Exhibit I-1 Form of Affidavit Regarding Transfer of Residual Certificates
Exhibit I-2 Form of Transferor Certificate Regarding Transfer of Residual Certificates
Exhibit J Form of Lost Note Affidavit
Exhibit K Form of Custodial Agreement
Exhibit L Form of Initial Certification
Exhibit M Form of Final Certification
Exhibit N Form of 10-K Certification
Exhibit O Servicing Criteria
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated [ ] [ ], 200 is hereby executed by and
among WACHOVIA ASSET FUNDING TRUST, LLC, as depositor (together with its permitted successors and assigns, the
“Depositor”), [ ], as servicer (together with its permitted successors and assigns, the “Servicer”),
and [ ], as trustee (together with its permitted successors and assigns, 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 Depositor, the Servicer and the
Trustee agree as follows:
PRELIMINARY STATEMENT
In exchange for the Certificates, the Depositor hereby conveys the Trust Estate to the Trustee
to create the Trust. The Trust Estate for federal income tax purposes will be treated as two separate real
estate mortgage investment conduits (the “Upper-Tier REMIC” and the “Lower-Tier REMIC,” respectively, and each, a
“REMIC”). The Class A Certificates (other than the Class A-R and Class A-LR Certificates) and the Class B
Certificates are referred to collectively as the “Regular Certificates” and shall constitute “regular interests”
in the Upper-Tier REMIC. The Uncertificated Lower-Tier Interests shall constitute the “regular interests” in the
Lower-Tier REMIC. The Class A-R Certificate shall be the “residual interest” in the Upper-Tier REMIC and the
Class A-LR Certificate shall be the “residual interest” in the Lower-Tier REMIC. The Certificates will represent
the entire beneficial ownership interest in the Trust. The “latest possible maturity date” for federal income
tax purposes of all interests created hereby will be the REMIC Certificate Maturity Date.
The following table sets forth characteristics of the Certificates, together with the minimum
denominations and integral multiples in excess thereof in which the Classes of Certificates shall be issuable
(except that one Certificate of each Class of Certificates may be issued in any amount in excess of the minimum
denomination):
Initial Class Integral Multiples
Certificate Balance Minimum In Excess
Classes or Notional Amount Pass-Through Rate Denomination Of Minimum
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-1 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-2 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-3 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-4 $ (1) $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-5 $ (2) $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-6 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-PO $ (4) $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-WIO $ (3) $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-R $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class A-LR $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class B-1 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class B-2 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class B-3 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class B-4 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class B-5 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Class B-6 $ % $ $
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
_______________
(1) During the initial Interest Accrual Period, interest will accrue on the Class A-4 Certificates at a rate
of % per annum. During each Interest Accrual Period thereafter, interest will accrue on the Class A-4
Certificates at a per annum rate equal to (i) % plus (ii) LIBOR, subject to a minimum rate of % and a maximum
rate of %.
(2) During the initial Interest Accrual Period, interest will accrue on the Class A-5 Certificates at a rate
of % per annum. During each Interest Accrual Period thereafter, interest will accrue on the Class A-5
Certificates at a per annum rate equal to (i) % minus (ii) LIBOR, subject to a minimum rate of % and a maximum
rate of %.
(3) Interest will accrue on the Class A-WIO Notional Amount as of any Distribution Date at a per annum rate
equal to (i) the weighted average of the Net Mortgage Interest Rates of the Premium Mortgage Loans (based on the
Stated Principal Balance of the Premium Mortgage Loans on the Due Date in the month preceding the month of such
Distribution Date minus (ii) %.
(4) Class A-PO Certificates will be Principal Only Certificates and will not bear interest.
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Accrued Certificate Interest: For any Distribution Date and each interest-bearing Class, one
month’s interest accrued during the related Interest Accrual Period at the applicable Pass-Through Rate on the
applicable Class Certificate Balance or Notional Amount, as applicable.
Adjusted Pool Amount: With respect to any Distribution Date, the Cut-Off Date Pool Principal
Balance of the Mortgage Loans minus the sum of (i) all amounts in respect of principal received in respect of the
Mortgage Loans (including, without limitation, amounts received as Monthly Payments, Periodic Advances, Principal
Prepayments, Liquidation Proceeds and Substitution Adjustment Amounts) and distributed to Holders of Certificates
on such Distribution Date and all prior Distribution Dates and (ii) the principal portion of all Realized Losses
(other than Debt Service Reductions) incurred on the Mortgage Loans from the Cut-Off Date through the end of the
month preceding such Distribution Date.
Adjusted Pool Amount (PO Portion): With respect to any Distribution Date, the sum of the
amounts, calculated as follows, with respect to all Outstanding Mortgage Loans: the product of (i) the PO
Percentage for each such Mortgage Loan and (ii) the remainder of (A) the Cut-Off Date Principal Balance of such
Mortgage Loan minus (B) the sum of (x) all amounts in respect of principal received in respect of such Mortgage
Loan (including, without limitation, amounts received as Monthly Payments, Periodic Advances, Principal
Prepayments, Liquidation Proceeds and Substitution Adjustment Amounts) and distributed to Holders of the
Certificates on such Distribution Date and all prior Distribution Dates and (y) the principal portion of any
Realized Loss (other than a Debt Service Reduction) incurred on such Mortgage Loan from the Cut-Off Date through
the end of the month preceding such Distribution Date.
Advance: A Periodic Advance or a Servicing Advance.
Agreement: This Pooling and Servicing Agreement together with all amendments hereof and
supplements hereto.
Amount Held for Future Distribution: As to any Distribution Date, the total of the amounts
held in the Servicer Custodial Account at the close of business on the preceding Determination Date on account of
(i) Principal Prepayments and Liquidation Proceeds received or made in the month of such Distribution Date and
(ii) payments which represent receipt of Monthly Payments in respect of a Due Date or Due Dates subsequent to the
related Due Date.
Appraised Value: With respect to any Mortgaged Property, either (i) the lesser of (a) the
appraised value determined in an appraisal obtained by the originator at origination of such Mortgage Loan and
(b) the sales price for such property, except that, in the case of Mortgage Loans the proceeds of which were used
to refinance an existing mortgage loan, the Appraised Value of the related Mortgaged Property is the appraised
value thereof determined in an appraisal obtained at the time of refinancing, or (ii) the appraised value
determined in an appraisal made at the request of a Mortgagor subsequent to origination in order to eliminate the
Mortgagor’s obligation to keep a Primary Insurance Policy in force.
Assignment of Mortgage: An individual assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related
Mortgaged Property is located to give record notice of the sale of the Mortgage.
Authenticating Agents: As defined in Section 9.10.
Book-Entry Certificate: All Classes of Certificates other than the Physical Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the State of North Carolina, the State of New York, the state in which the servicing offices of
the Servicer is located or the state in which the Corporate Trust Office is located are required or authorized by
law or executive order to be closed.
Certificate: Any of the Wachovia Asset Funding Trust, LLC Mortgage Pass-Through Certificates,
Series 200 - that are issued pursuant to this Agreement.
Certificate Account: The separate Eligible Account created and maintained by the Trustee
pursuant to Section 3.08(c) in the name of the Trustee for the benefit of the Certificateholders and designated
“ , in trust for registered holders of Wachovia Asset Funding Trust, LLC Mortgage Pass-Through Certificates,
Series 200 - .” Funds in the Certificate Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Certificate Balance: With respect to any Certificate at any date, the maximum dollar amount of
principal to which the Holder thereof is then entitled hereunder, such amount being equal to the product of the
Percentage Interest of such Certificate and the Class Certificate Balance of the Class of Certificates of which
such Certificate is a part.
Certificate Custodian: Initially, ; thereafter any other Certificate Custodian acceptable
to the Depository and selected by the Trustee.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who is the beneficial
owner of a Book-Entry Certificate. With respect to any Definitive Certificate, the Certificateholder of such
Certificate.
Certificate Register: The register maintained pursuant to Section 6.02.
Certificate Registrar: The registrar appointed pursuant to Section 6.02.
Certificateholder: The Person in whose name a Certificate is registered in the Certificate
Register, except that, solely for the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor, the Servicer or any affiliate thereof shall be deemed not to be
outstanding and the Percentage Interest and Voting Rights evidenced thereby shall not be taken into account in
determining whether the requisite amount of Percentage Interests or Voting Rights, as the case may be, necessary
to effect any such consent has been obtained, unless such entity is the registered owner of the entire Class of
Certificates, provided that the Trustee shall not be responsible for knowing that any Certificate is registered
in the name of such an affiliate unless one of its Responsible Officers has actual knowledge.
Class: As to the Certificates, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-PO, Class A-WIO, Class A-R, Class A-LR, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates, as the case may be.
Class A Certificates: The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-PO, Class A-WIO, Class A-R and Class A-LR Certificates.
Class A-5 Notional Amount: As to any Distribution Date and the Class A-5 Certificates, the
Class Certificate Balance of the Class A-4 Certificates.
Class A-PO Deferred Amount: As to any Distribution Date prior to the Senior Credit Support
Depletion Date, the aggregate of the applicable PO Percentage of each Realized Loss to be allocated to the Class
A-PO Certificates on such Distribution Date or previously allocated to the Class A-PO Certificates and not yet
paid to the Holders of the Class A-PO Certificates pursuant to Section 5.02(a)(iii) and the amount (without
duplication) of any reduction in the Class Certificate Balance of the Class A-PO Certificates pursuant to Section
5.03(b).
Class A-WIO Notional Amount: As to any Distribution Date and the Class A-WIO Certificates, the
aggregate Stated Principal Balances of the Premium Mortgage Loans on the Due Date in the month preceding the
month of such Distribution.
Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates.
Class Certificate Balance: With respect to any Class (other than the Class A-5 and Class A-WIO
Certificates) and any date of determination, the Initial Class Certificate Balance of such Class minus the sum of
(i) all distributions of principal made with respect thereto, (ii) all Realized Losses allocated thereto pursuant
to Section 5.03(a), and (iii) all other reductions in Class Certificate Balance previously allocated thereto
pursuant to Section 5.03(b). The Class A-5 and Class A-WIO Certificates are Interest-Only Certificates and have
no Class Certificate Balance.
Class Interest Shortfall: For any Distribution Date and each interest-bearing Class, the
amount by which Accrued Certificate Interest for such Class (as reduced pursuant to Section 5.02(c)) exceeds the
amount of interest actually distributed on such Class on such Distribution Date pursuant to clause (i) of the
definition of “Interest Distribution Amount.”
Class Unpaid Interest Shortfall: As to any Distribution Date and each interest-bearing Class,
the amount by which the aggregate Class Interest Shortfalls for such Class on prior Distribution Dates exceeds
the amount of interest actually distributed on such Class on such prior Distribution Dates pursuant to clause
(ii) of the definition of “Interest Distribution Amount.”
Closing Date: , 200 .
Code: The Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: As defined in Section 3.17.
Co-op Shares: Shares issued by private non-profit housing corporations.
Corporate Trust Office: The principal office of the Trustee at which at any particular time
its certificate transfer services are conducted, which office at the date of the execution of this instrument is
located at , , , Attention: .
Corresponding Upper-Tier Class or Classes: As to the following Uncertificated Lower-Tier
Interests, the Corresponding Upper-Tier Class or Classes, as follows:
Uncertificated Lower-Tier Interest Corresponding Upper-Tier Class or Classes
Class A-L1 Interest Class A-1 Certificates, Class A-2 Certificates and Class A-6
Certificates
Class A-L3 Interest Class A-3 Certificates
Class A-L4 Interest Class A-4 Certificates and Class A-5 Certificates
Class A-LPO Interest Class A-PO Certificates
Class A-LUR Interest Class A-R Certificate
Class A-LWIO Interest Class A-WIO Certificates
Class B-L1 Interest Class B-1 Certificates
Class B-L2 Interest Class B-2 Certificates
Class B-L3 Interest Class B-3 Certificates
Class B-L4 Interest Class B-4 Certificates
Class B-L5 Interest Class B-5 Certificates
Class B-L6 Interest Class B-6 Certificates
Custodian: Initially, the Trustee, and thereafter the Custodian, if any, hereafter appointed
by the Trustee pursuant to Section 9.12. The Custodian may (but need not) be the Trustee or any Person directly
or indirectly controlling or controlled by or under common control of either of them. Neither the Servicer nor
the Depositor, nor any Person directly or indirectly controlling or controlled by or under common control with
any such Person may be appointed Custodian.
Customary Servicing Procedures: With respect to the Servicer, procedures (including collection
procedures) that the Servicer customarily employs and exercises in servicing and administering mortgage loans for
its own account and which are in accordance with accepted mortgage servicing practices of prudent lending
institutions servicing mortgage loans of the same type as the Mortgage Loans in the jurisdictions in which the
related Mortgaged Properties are located.
Cut-Off Date: , 200 .
Cut-Off Date Pool Principal Balance: The aggregate of the Cut-Off Date Principal Balances of
the Mortgage Loans which is $ .
Cut-Off Date Principal Balance: As to any Mortgage Loan, the unpaid principal balance thereof
as of the close of business on the Cut-Off Date, reduced by all installments of principal due on or prior thereto
whether or not paid.
Debt Service Reduction: As to any Mortgage Loan and any Determination Date, the excess of (i)
the Monthly Payment due on the related Due Date under the terms of such Mortgage Loan over (ii) the amount of the
monthly payment of principal and/or interest required to be paid with respect to such Due Date by the Mortgagor
as established by a court of competent jurisdiction (pursuant to an order which has become final and
nonappealable) as a result of a proceeding initiated by or against the related Mortgagor under the Bankruptcy
Code, as amended from time to time (11 U.S.C.); provided that no such excess shall be considered a Debt Service
Reduction so long as (a) the Servicer is pursuing an appeal of the court order giving rise to any such
modification and (b)(1) such Mortgage Loan is not in default with respect to payment due thereunder in accordance
with the terms of such Mortgage Loan as in effect on the Cut-Off Date or (2) Monthly Payments are being advanced
by the Servicer in accordance with the terms of such Mortgage Loan as in effect on the Cut-Off Date.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that became the subject of a Debt
Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to be cured, repurchased or
substituted for pursuant to Sections 2.02 or 2.04.
Deficient Valuation: As to any Mortgage Loan and any Determination Date, the excess of (i) the
then outstanding indebtedness under such Mortgage Loan over (ii) the secured valuation thereof established by a
court of competent jurisdiction (pursuant to an order which has become final and nonappealable) as a result of a
proceeding initiated by or against the related Mortgagor under the Bankruptcy Code, as amended from time to time
(11 U.S.C.), pursuant to which such Mortgagor retained such Mortgaged Property; provided that no such excess
shall be considered a Deficient Valuation so long as (a) the Servicer is pursuing an appeal of the court order
giving rise to any such modification and (b)(1) such Mortgage Loan is not in default with respect to payments due
thereunder in accordance with the terms of such Mortgage Loan as in effect on the Cut-Off Date or (2) Monthly
Payments are being advanced by the Servicer in accordance with the terms of such Mortgage Loan as in effect on
the Cut-Off Date.
Deficient Valuation Mortgage Loan: Any Mortgage Loan that became the subject of a Deficient
Valuation.
Definitive Certificates: As defined in Section 6.02(c)(iii).
Depositor: Wachovia Asset Funding Trust, LLC, a Delaware limited liability company, or its
successor in interest, as depositor of the Trust Estate.
Depository: The Depository Trust Company, the nominee of which is Cede & Co., as the
registered Holder of the Book-Entry Certificates or any successor thereto appointed in accordance with this
Agreement. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the
Uniform Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other financial institution or other Person
for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date, the 16th day of the month of the related
Distribution Date or, if such 16th day is not a Business Day, the Business Day immediately preceding such 16th
day.
Discount Mortgage Loan: Any Mortgage Loan with a Net Mortgage Interest Rate that is less than
________% per annum.
Distribution Date: The th day of each month beginning in 200 (or, if such day is not
a Business Day, the next Business Day).
Due Date: As to any Distribution Date and each Mortgage Loan, the first day in the calendar
month of such Distribution Date.
Eligible Account: Any of (i) an account or accounts maintained with (a) , or (b) a
federal or state chartered depository institution or trust company the short-term unsecured debt obligations of
which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest short-term ratings of each Rating Agency
at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution
or trust company in which such accounts are insured by the FDIC (to the limits established by the FDIC) and the
uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Certificateholders have a claim with respect to the funds
in such account or a perfected first priority security interest against any collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which such account is maintained, or (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository institution or trust company,
acting in its fiduciary capacity or (iv) any other account acceptable to each Rating Agency. Eligible Accounts
may bear interest and may include, if otherwise qualified under this definition, accounts maintained with the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificates: Any Class B-4, Class B-5, or Class B-6 Certificate.
Escrow Account: As defined in Section 3.09.
Escrow Payments: The amounts constituting taxes, assessments, Primary Insurance Policy
premiums, fire and hazard insurance premiums and other payments as may be required to be escrowed by the
Mortgagor with the mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
Event of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the amount, if any, by which
the sum of any Liquidation Proceeds of such Mortgage Loan received in the calendar month in which such Mortgage
Loan became a Liquidated Mortgage Loan, net of any amounts previously reimbursed to the Servicer as
Nonrecoverable Advance(s) with respect to such Mortgage Loan pursuant to Section 3.11(a)(iii), exceeds (i) the
unpaid principal balance of such Liquidated Mortgage Loan as of the Due Date in the month in which such Mortgage
Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage Interest Rate from the Due Date
as to which interest was last paid or for which a Periodic Advance was made (and not reimbursed) up to the Due
Date applicable to the Distribution Date immediately following the calendar month during which such liquidation
occurred.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor thereto.
Final Distribution Date: The Distribution Date on which the final distribution in respect of
the Certificates will be made pursuant to Section 10.01.
Financial Market Service: Bloomberg Financial Service and any other financial information
provider designated by the Depositor by written notice to the Trustee.
FIRREA: The Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.
[Fitch: Fitch Ratings, and its successors in interest.]
FNMA: Xxxxxx Xxx, or any successor thereto.
Fractional Interest: As defined in Section 5.02(d).
Holder: A Certificateholder.
Independent: When used with respect to any specified Person means such a Person who (i) is in
fact independent of the Depositor and the Servicer, (ii) does not have any direct financial interest or any
material indirect financial interest in the Depositor or the Servicer or in an affiliate of either of them, and
(iii) is not connected with the Depositor or the Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Initial Class Certificate Balance: As to each Class of Certificates (other than the Class A-5
and Class A-WIO Certificates), the Class Certificate Balance set forth in the Preliminary Statement. The Class
A-5 and Class A-WIO Certificates are Interest-Only Certificates and have no Initial Class Certificate Balance.
Initial Notional Amount: As to each Class of Interest-Only Certificates, the Notional Amount
set forth in the Preliminary Statement.
Insurance Policy: With respect to any Mortgage Loan included in the Trust Estate, any related
insurance policy, including all riders and endorsements thereto in effect, including any replacement policy or
policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any Insurance Policy, in each case
other than any amount included in such Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other insurance policy with
respect to the Mortgage Loans.
Interest Accrual Period: As to any Distribution Date and each Class of Certificates (other
than the Class A-4, Class A-5 and A-PO Certificates), the period from and including the first day of the calendar
month preceding the calendar month of such Distribution Date to but not including the first day of the calendar
month of such Distribution Date. As to any Distribution Date and the Class A-4 and Class A-5 Certificates, the
period from and including the day of the calendar month preceding the calendar month in which such
Distribution Date occurs and ending on the day of the calendar month in which such Distribution Date
occurs.
Interest Distribution Amount: For any Distribution Date and each interest-bearing Class, the
sum of (i) the Accrued Certificate Interest, subject to reduction pursuant to Section 5.02(c) and (ii) any Class
Unpaid Interest Shortfall for such Class.
Interest-Only Certificates: Any Class of Certificates entitled to distributions of interest,
but no distributions of principal. The Class A-5 and Class A-WIO Certificates are the only Classes of
Interest-Only Certificates.
LIBOR: As to any Distribution Date, the arithmetic mean of the London Interbank offered rate
quotations for one-month U.S. Dollar deposits, as determined by the Trustee in accordance with Section 5.09.
LIBOR Business Day: Any Business Day on which banks are open for dealing in foreign currency
and exchange in London, England, the City of New York and the State where the Corporate Trust Office is located.
LIBOR Certificates: Any of the Class A-4 and Class A-5 Certificates.
Liquidated Mortgage Loan: With respect to any Distribution Date, a defaulted Mortgage Loan
(including any REO Property) that was liquidated in the calendar month preceding the month of such Distribution
Date and as to which the Servicer has certified (in accordance with this Agreement) that it has received all
proceeds it expects to receive in connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in connection with the
partial or complete liquidation of defaulted Mortgage Loans, whether through trustee’s sale, foreclosure sale or
otherwise or amounts received in connection with any condemnation or partial release of a Mortgaged Property and
any other proceeds received in connection with an REO Property, less the sum of related unreimbursed Servicing
Fees and Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and any date of determination, the
fraction, expressed as a percentage, the numerator of which is the outstanding principal balance of the related
Mortgage Loan at the date of determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Lower-Tier Distribution Amount: As defined in Section 5.02(a).
Lower-Tier REMIC: As defined in the Preliminary Statement, the assets of which consist of the
Mortgage Loans, such amounts as shall from time to time be held in the Certificate Account, the insurance
policies, if any, relating to a Mortgage Loan and property which secured a Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure.
MERS: As defined in Section 2.01(b)(iii).
Monthly Payment: The scheduled monthly payment on a Mortgage Loan due on any Due Date
allocable to principal and/or interest on such Mortgage Loan which, unless otherwise specified herein, shall give
effect to any related Debt Service Reduction and any Deficient Valuation that affects the amount of the monthly
payment due on such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument creating a first lien on a Mortgaged
Property securing a Mortgage Note or creating a first lien on a leasehold interest.
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 Interest Rate: As to any Mortgage Loan, the per annum rate of interest at which
interest accrues on the principal balance of such Mortgage Loan in accordance with the terms of the related
Mortgage Note.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement, dated , 200 ,
between the , as seller, and the Depositor, as purchaser.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time amended by the
Servicer to reflect the addition of Substitute Mortgage Loans and the deletion of Defective Mortgage Loans
pursuant to the provisions of this Agreement) transferred to the Trustee as part of the Trust Estate and from
time to time subject to this Agreement, attached hereto as Exhibit D, setting forth the following information
with respect to each Mortgage Loan: (i) the Mortgage Loan identifying number; (ii) a code indicating whether the
Mortgaged Property is owner-occupied; (iii) the property type for each Mortgaged Property; (iv) the original
months to maturity or the remaining months to maturity from the Cut-Off Date; (v) the Loan-to-Value Ratio at
origination; (vi) the Mortgage Interest Rate; (vii) the date on which the first Monthly Payment was due on the
Mortgage Loan, and, if such date is not the Due Date currently in effect, such Due Date; (viii) the stated
maturity date; (ix) the amount of the Monthly Payment as of the Cut-Off Date; (x) the paid-through date; (xi) the
original principal amount of the Mortgage Loan; (xii) the principal balance of the Mortgage Loan as of the close
of business on the Cut-Off Date, after application of payments of principal due on or before the Cut-Off Date,
whether or not collected, and after deduction of any payments collected of scheduled principal due after the
Cut-Off Date; (xiii) a code indicating the purpose of the Mortgage Loan; (xiv) a code indicating the
documentation style; and (xv) the Appraised Value. With respect to the Mortgage Loans in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the Cut-Off Date: (i) the number of
Mortgage Loans; (ii) the current aggregate outstanding principal balance of the Mortgage Loans; (iii) the
weighted average Mortgage Rate of the Mortgage Loans; and (iv) the weighted average months to maturity of the
Mortgage Loans.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the Trustee pursuant to
Section 2.01 as from time to time are held as a part of the Trust Estate (including any Substitute Mortgage Loans
and REO Property), the Mortgage Loans originally so held being identified in the Mortgage Loan Schedule.
Mortgage Note: The originally executed note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan, together with all riders thereto and amendments thereof.
Mortgaged Property: The underlying property securing a Mortgage Loan, which may include Co-op
Shares or residential long-term leases.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: As to any Mortgage Loan and Distribution Date, such Mortgage
Loan’s Mortgage Interest Rate thereon on the first day of the month preceding the month of the related
Distribution Date reduced by the Servicing Fee Rate and the Trustee Fee Rate.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction (expressed as a percentage),
the numerator of which is the Net Mortgage Interest Rate of such Discount Mortgage Loan and the denominator of
which is %. As to any Mortgage Loan that is not a Discount Mortgage Loan, 100%.
Non-PO Principal Amount: As to any Distribution Date, the sum of the applicable Non-PO
Percentage of (a) the principal portion of each Monthly Payment due on each Mortgage Loan on the related Due
Date, (b) the Stated Principal Balance, as of the date of repurchase, of each Mortgage Loan that was repurchased
by the Depositor pursuant to this Agreement as of such Distribution Date, (c) any Substitution Adjustment Amount
in connection with a Defective Mortgage Loan received with respect to such Distribution Date, (d) any Liquidation
Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans
received during the calendar month preceding the month of such Distribution Date, (e) with respect to each
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal received during the calendar month
preceding the month of such Distribution Date with respect to such Mortgage Loan and (f) all Principal
Prepayments received during the calendar month preceding the month of such Distribution Date.
Non-Supported Interest Shortfalls: As to any Distribution Date, the amount, if any, by which
the aggregate of Prepayment Interest Shortfalls exceeds Compensating Interest for such Distribution Date.
Non-U.S. Person: A Person other than a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously made or proposed to be made in
respect of a Mortgage Loan which has not been previously reimbursed and which, in the good faith judgment of the
Servicer, will not or, in the case of a proposed Advance, would not be ultimately recoverable from the related
Mortgagor, related Liquidation Proceeds, or other recoveries in respect of the related Mortgage Loan.
Notional Amount: With respect to: (i) the Class A-5 Certificates and any date of
determination, the Class A-5 Notional Amount and (ii) the Class A-WIO Certificates and any date of determination,
the Class A-WIO Notional Amount.
Offered Certificates: The Class A, Class B-1, Class B-2 and Class B-3 Certificates.
Officer’s Certificate: A certificate signed by the Chairman of the Board, Vice Chairman of the
Board, President or a Vice President and by the Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant Secretaries, or any other duly authorized officer of the Depositor or the Servicer, as the case may be,
and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel acceptable to the Trustee, who may be counsel
for the Depositor or the Servicer, except that any opinion of counsel relating to the qualification of the Trust
Estate as two separate REMICs or compliance with the REMIC Provisions must be an opinion of Independent counsel.
Original Fractional Interest: With respect to each of the following Classes of Subordinate
Certificates, the corresponding percentage described below, as of the Closing Date:
Class B-1 %
Class B-2 %
Class B-3 %
Class B-4 %
Class B-5 %
Class B-6 %
Original Subordinate Certificate Balance: $ .
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan which was not the subject of a
Principal Prepayment in Full prior to such Due Date, which did not become a Liquidated Mortgage Loan prior to
such Due Date and which was not purchased from the Trust prior to such Due Date pursuant to Sections 2.02 or 2.04.
Ownership Interest: As to any Certificate, any ownership or security interest in such
Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: As to each Class of interest-bearing Certificates, the per annum rate set
forth in the Preliminary Statement.
Paying Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate, the percentage obtained by dividing the initial
Certificate Balance of such Certificate (or the initial notional amount for a Class A-5 or Class A-WIO
Certificate) by the Initial Class Certificate Balance or Initial Notional Amount, as applicable, of the Class of
which such Certificate is a part.
Periodic Advance: The payment required to be made by the Servicer with respect to any
Distribution Date pursuant to Section 3.18, the amount of any such payment being equal to the aggregate of
Monthly Payments (net of the Servicing Fee) on the Mortgage Loans (including any REO Property) that were due on
the related Due Date and not received as of the close of business on the related Determination Date, less the
aggregate amount of any such delinquent payments that the Servicer has determined would constitute a
Nonrecoverable Advance if advanced.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United States, FHLMC, FNMA or any
agency or instrumentality of the United States when such obligations are backed by the full faith and
credit of the United States; provided that such obligations of FHLMC or FNMA shall be limited to senior
debt obligations and mortgage participation certificates other than investments in mortgage-backed or
mortgage participation securities with yields evidencing extreme sensitivity to the rate of principal
payments on the underlying mortgages, which shall not constitute Permitted Investments hereunder;
(ii) repurchase agreements on obligations specified in clause (i) maturing not more than one month from the
date of acquisition thereof with a corporation incorporated under the laws of the United States or any
state thereof rated not lower than “ ” by and “ ” by ;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and bankers’ acceptances (which
shall each have an original maturity of not more than 90 days and, in the case of bankers’ acceptances,
shall in no event have an original maturity of more than 365 days or a remaining maturity of more than
30 days) denominated in United States dollars of any U.S. depository institution or trust company
incorporated under the laws of the United States or any state thereof, rated not lower than “ ” by
and “ ” by ;
(iv) commercial paper (having original maturities of not more than 365 days) of any corporation incorporated
under the laws of the United States or any state thereof which is rated not lower than “ ” by
and “ ” by ;
(v) investments in money market funds (including funds of the Trustee or its affiliates, or funds for which
an affiliate of the Trustee acts as advisor, as well as funds for which the Trustee and its affiliates
may receive compensation) rated either “ ” by and “ ” by or otherwise approved in
writing by each Rating Agency; and
(vi) other obligations or securities that are acceptable to each Rating Agency and, as evidenced by an
Opinion of Counsel obtained by the Servicer, will not affect the qualification of the Trust Estate as
two separate REMICs;
provided, however, that no instrument shall be a Permitted Investment if it represents either (a) the right to
receive only interest payments with respect to the underlying debt instrument or (b) the right to receive both
principal and interest payments derived from obligations underlying such instrument and the principal and
interest with respect to such instrument provide a yield to maturity greater than 120% of the yield to maturity
at par of such underlying obligations.
Permitted Transferee: Any Person other than (i) the United States, or any State or any
political subdivision thereof, or any agency or instrumentality of any of the foregoing, (ii) a foreign
government, international organization or any agency or instrumentality of either of the foregoing, (iii) an
organization which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511
of the Code on unrelated business taxable income) (except certain farmers’ cooperatives described in Code Section
521), (iv) rural electric and telephone cooperatives described in Code Section 1381(a)(2)(C) and (v) any other
Person so designated by the Servicer based on an Opinion of Counsel to the effect that any transfer to such
Person may cause the Trust or any other Holder of a Residual Certificate to incur tax liability that would not be
imposed other than on account of such transfer. The terms “United States,” “State” and “international
organization” shall have the meanings set forth in Code Section 7701 or successor provisions.
Person: Any individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
Physical Certificates: The Class A-R, Class A-LR, Class B-4, Class B-5 and Class B-6
Certificates.
Plan: As defined in Section 6.02(e).
PO Percentage: As to any Discount Mortgage Loan, 100% minus the Non-PO Percentage for such
Mortgage Loan. As to any Mortgage Loan that is not a Discount Mortgage Loan, 0%.
PO Principal Amount: As to any Distribution Date, the sum of the applicable PO Percentage of
(a) the principal portion of each Monthly Payment due on each Mortgage Loan on the related Due Date, (b) the
Stated Principal Balance, as of the date of repurchase, of each Mortgage Loan that was repurchased by the related
Seller or the Depositor pursuant to this Agreement as of such Distribution Date, (c) any Substitution Adjustment
Amount in connection with any Defective Mortgage Loan received with respect to such Distribution Date, (d) any
Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage
Loans received during the calendar month preceding the month of such Distribution Date, (e) with respect to each
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan during the calendar month preceding the month of such Distribution Date with respect to such
Mortgage Loan and (f) all Principal Prepayments received during the calendar month preceding the month of such
Distribution Date.
Pool Distribution Amount: As to any Distribution Date, the excess of (a) the sum of (i) the
aggregate of (A) the interest portion of any Monthly Payment (net of the Servicing Fee) and the principal portion
of any Monthly Payment due on the Due Date in the month in which such Distribution Date occurs and which is
received prior to the related Determination Date and (B) all Periodic Advances and payments of Compensating
Interest made by the Servicer in respect of such Distribution Date deposited to the Servicer Custodial Account
pursuant to Section 3.08(b)(vii); (ii) all Liquidation Proceeds received during the preceding calendar month and
deposited to the Servicer Custodial Account pursuant to Section 3.08(b)(iii); (iii) all Principal Prepayments
received during the month preceding the month of such Distribution Date and deposited to the Servicer Custodial
Account pursuant to Section 3.08(b)(i) during such period; (iv) in connection with Defective Mortgage Loans, as
applicable, the aggregate of the Repurchase Prices and Substitution Adjustment Amounts deposited on the related
Remittance Date pursuant to Section 3.08(b)(vi); and (v) any other amounts in the Servicer Custodial Account
deposited therein pursuant to Sections 3.08(b)(iv), (v) and (viii) in respect of such Distribution Date; over (b)
any (i) amounts permitted to be withdrawn from the Servicer Custodial Account pursuant to clauses (i) through
(vii), inclusive, of Section 3.11(a) and (ii) amounts permitted to be withdrawn from the Certificate Account
pursuant to clauses (i) and (ii) of Section 3.11(b).
Pool Stated Principal Balance: As to any Distribution Date, the aggregate Stated Principal
Balances of all Mortgage Loans that were Outstanding Mortgage Loans immediately following the Due Date in the
month of such Distribution Date.
Premium Mortgage Loan: Any Mortgage Loan with a Net Mortgage Interest Rate that is equal to or
more than % per annum.
Prepayment Interest Shortfall: As to any Distribution Date and each Mortgage Loan subject to a
Principal Prepayment received during the calendar month preceding such Distribution Date, the amount, if any, by
which one month’s interest at the related Mortgage Interest Rate (net of the Servicing Fee) on such Principal
Prepayment exceeds the amount of interest paid in connection with such Principal Prepayment.
Primary Insurance Policy: Each policy of primary mortgage guaranty insurance or any
replacement policy therefor with respect to any Mortgage Loan, in each case issued by an insurer acceptable to
FNMA or FHLMC.
Principal-Only Certificates: Any Class of Certificates entitled to distributions of principal,
but to no distributions of interest. The Class A-PO Certificates are the only Principal-Only Certificates.
Principal Prepayment: Any payment or other recovery of principal on a Mortgage Loan (other
than Liquidation Proceeds) which is received in advance of its scheduled Due Date and is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the entire principal balance of a
Mortgage Loan.
Priority Amount: As to any Distribution Date, the lesser of (i) the Class Certificate Balance
of the Class A-6 Certificates and (ii) the product of (a) the Shift Percentage, (b) the Priority Percentage and
(c) the Non-PO Principal Amount.
Priority Percentage: As to any Distribution Date, the percentage equivalent (carried to six
places rounded up) of a fraction the numerator of which is the Class Certificate Balance of the Class A-6
Certificates immediately prior to such date and the denominator of which is the aggregate of the Class
Certificate Balances of all Classes of Certificates (other than the Class A-PO Certificates) immediately prior to
such date.
Private Certificates: The Class B-4, Class B-5 and Class B-6 Certificates.
Pro Rata Share: As to any Distribution Date and any Class of Subordinate Certificates that is
not a Restricted Class, the portion of the Subordinate Principal Distribution Amount allocable to such Class,
equal to the product of the Subordinate Principal Distribution Amount for such Distribution Date and a fraction,
the numerator of which is the related Class Certificate Balance thereof and the denominator of which is the
aggregate Class Certificate Balance of the Subordinate Certificates that are not Restricted Classes. The Pro
Rata Share of a Restricted Class shall be 0%.
Qualified Appraiser: An appraiser of a Mortgaged Property duly appointed by the originator of
the related Mortgage Loan, who had no interest, direct or indirect, in such Mortgaged Property or in any loan
made on the security thereof, whose compensation is not affected by the approval or disapproval of the related
Mortgage Loan and who met the minimum qualifications of FNMA or FHLMC.
Rate Determination Date: As to any Distribution Date and any Class of LIBOR Certificates, the
second LIBOR Business Day prior to the beginning of the applicable Interest Accrual Period for such Class and
such Distribution Date.
Rating Agency: Each of and . If either such organization or a successor is no
longer in existence, “Rating Agency” shall be such nationally recognized statistical rating organization, or
other comparable Person, as is designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating or rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount as of the date of such
liquidation, equal to (i) the unpaid principal balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Interest Rate from the Due Date as to which interest was last
paid or advanced (and not reimbursed) to Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of such Liquidated Mortgage Loan from
time to time, minus (iii) the Liquidation Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Net Mortgage Interest Rate and to principal of
the Liquidated Mortgage Loan. With respect to each Mortgage Loan that has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage Note has been reduced, the difference between
the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan
that has become the subject of a Debt Service Reduction and any Distribution Date, the amount, if any, by which
the principal portion of the related Monthly Payment has been reduced.
Record Date: The last day of the month (or, if such day is not a Business Day, the preceding
Business Day) preceding the month of the related Distribution Date.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of which were not used to purchase the
related Mortgaged Property.
Regular Certificates: As defined in the Preliminary Statement hereto.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to time.
Relief Act: The Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended.
Relief Act Reduction: With respect to any Distribution Date, for any Mortgage Loan as to which
there has been a reduction in the amount of interest collectible thereon for the most recently ended calendar
month as a result of the application of the Relief Act or comparable state legislation, the amount, if any, by
which (i) interest collectible on such Mortgage Loan for the most recently ended calendar month is less than
(ii) interest accrued pursuant to the terms of the Mortgage Note on the same principal amount and for the same
period as the interest collectible on such Mortgage Loan for the most recently ended calendar month.
REMIC: A “real estate mortgage investment conduit” within the meaning of Section 860D of the
Code.
REMIC Certificate Maturity Date: The “latest possible maturity date” of the Regular
Certificates as that term is defined in Section 2.07.
REMIC Provisions: Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and
related provisions, and regulations promulgated thereunder, as the foregoing may be in effect from time to time,
as well as provisions of applicable state laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m. Eastern time on the second Business
Day immediately preceding such Distribution Date.
REO Disposition Period: As defined in Section 3.14.
REO Proceeds: Proceeds, net of any related expenses of the Servicer, received in respect of
any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property)
which are received prior to the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of the Trust through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: As to any Defective Mortgage Loan repurchased on any date pursuant to
Sections 2.02 or 2.04, an amount equal to the sum of (i) the unpaid principal balance thereof and (ii) the unpaid
accrued interest thereon at the applicable Mortgage Interest Rate from the Due Date to which interest was last
paid by the Mortgagor to the first day of the month following the month in which such Mortgage Loan became
eligible to be repurchased.
Request for Release: The Request for Release submitted by the Servicer to the Trustee or the
Custodian on behalf of the Trustee, substantially in the form of Exhibit E.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy which is
required to be maintained from time to time under this Agreement in respect of such Mortgage Loan.
Reserve Interest Rate: As defined in Section 5.09.
Residual Certificates: The Class A-R and Class A-LR Certificates.
Responsible Officer: When used with respect to the Trustee, any officer of the Corporate Trust
Department of the Trustee, including any Senior Vice President, any Vice President, any Assistant Vice President,
any Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above designated officers and having
responsibility for the administration of this Agreement.
Restricted Classes: As defined in Section 5.02(d).
Securitization Transaction: Any transaction involving a sale or other transfer of mortgage
loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities.
[S&P: Standard & Poor’s, a Division of The XxXxxx-Xxxx Companies, Inc., and its successors in
interest.]
Seller: , a , or its successor in interest, as seller of the Mortgage Loans under
the Mortgage Loan Purchase Agreement.
Senior Certificates: The Class A Certificates.
Senior Credit Support Depletion Date: The date on which the aggregate Class Certificate
Balance of the Subordinate Certificates is reduced to zero.
Senior Percentage: With respect to any Distribution Date, the percentage, carried six places
rounded up, obtained by dividing the aggregate Class Certificate Balance of the Senior Certificates (other than
the Class A-PO Certificates) immediately prior to such Distribution Date by the aggregate Class Certificate
Balance of all Classes of Certificates (other than the Class A-PO Certificates) immediately prior to such
Distribution Date.
Senior Prepayment Percentage: For any Distribution Date during the five years beginning on the
first Distribution Date, %. The Senior Prepayment Percentage for any Distribution Date occurring on or
after the fifth anniversary of the first Distribution Date will, except as provided herein, be as follows: for
any Distribution Date in the first year thereafter, the Senior Percentage plus % of the Subordinate
Percentage for such Distribution Date; for any Distribution Date in the second year thereafter, the Senior
Percentage plus % of the Subordinate Percentage for such Distribution Date; for any Distribution Date in the
third year thereafter, the Senior Percentage plus % of the Subordinate Percentage for such Distribution
Date; for any Distribution Date in the fourth year thereafter, the Senior Percentage plus % of the
Subordinate Percentage for such Distribution Date; and for any Distribution Date in the fifth or later years
thereafter, the Senior Percentage for such Distribution Date (unless on any of the foregoing Distribution Dates
the Senior Percentage exceeds the initial Senior Percentage, in which case the Senior Prepayment Percentage for
such Distribution Date will once again equal 100%). Notwithstanding the foregoing, no decrease in the Senior
Prepayment Percentage will occur unless both of the Senior Step Down Conditions are satisfied.
Senior Principal Distribution Amount: As to any Distribution Date, the sum of (i) the Senior
Percentage of the applicable Non-PO Percentage of all amounts described in clauses (a) through (d) of the
definition of “Non-PO Principal Amount” for such Distribution Date and (ii) the Senior Prepayment Percentage of
the applicable Non-PO Percentage of the amounts described in clauses (e) and (f) of the definition of “Non-PO
Principal Amount” for such Distribution Date.
Senior Step Down Conditions: As of any Distribution Date as to which any decrease in the
Senior Prepayment Percentage applies, (i) the outstanding principal balance of all Mortgage Loans (including, for
this purpose, any Mortgage Loans in foreclosure or any REO Property) delinquent 60 days or more (averaged over
the preceding six month period), as a percentage of the aggregate Class Certificate Balance of the Subordinate
Certificates (averaged over the preceding six-month period), is not equal to or greater than 50% or (ii)
cumulative Realized Losses with respect to the Mortgage Loans as of the applicable Distribution Date do not
exceed the percentages of the Original Subordinate Certificate Balance set forth below:
Percentage of
Original Subordinate
Distribution Date Occurring Certificate Balance
20 through 20 %
20 through 20 %
20 through 20 %
20 through 20 %
20 and thereafter %
Servicer: , a , or its successor in interest, in its capacity as servicer of the
Mortgage Loans, or any successor servicer appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30 a.m., Eastern time, on the Business
Day immediately preceding such Distribution Date.
Servicer Custodial Account: The separate Eligible Account or Accounts created and maintained
by the Servicer pursuant to Section 3.08(b).
Servicer’s Certificate: The monthly report required by Section 4.01.
Servicing Advances: All customary, reasonable and necessary “out of pocket” costs and expenses
incurred in the performance by the Servicer of its servicing obligations, including, but not limited to (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) expenses reimbursable to the Servicer
pursuant to Section 3.14 and any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the obligations under Section 3.12.
Servicing Criteria: The “servicing criteria” set forth in Item 1122(d) of Regulation AB, as
such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan and Distribution Date, the amount of the fee
payable to the Servicer, which shall, for such Distribution Date, be equal to one-twelfth of the product of the
Servicing Fee Rate with respect to such Mortgage Loan and the Stated Principal Balance of such Mortgage Loan,
subject to reduction as provided in Section 3.17. Such fee shall be payable monthly, computed on the basis of
the same Stated Principal Balance and period respecting which any related interest payment on a Mortgage Loan is
computed. The Servicer’s right to receive the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation Proceeds and other proceeds, to the
extent permitted by Section 3.11) of related Monthly Payments collected by the Servicer, or as otherwise provided
under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, the per annum rate equal to (i) the
related Mortgage Interest Rate less (ii) the sum of % and the Trustee Fee Rate; provided, however, that the
Servicing Fee Rate will not be less than % per annum with respect to any Mortgage Loan.
Servicing File: The items pertaining to a particular Mortgage Loan referred to in Exhibit J
hereto, and any additional documents required to be added to the Servicing File pursuant to the Agreement.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans whose name appears on a list of servicing officers furnished
to the Trustee by the Servicer, as such list may from time to time be amended.
Shift Percentage: As to any Distribution Date, the percentage indicated below:
Distribution Date Occurring In Shift Percentage
20 through 20 ..................................... %
20 through 20 ..................................... %
20 through 20 ..................................... %
20 through 20 ..................................... %
20 through 20 ..................................... %
20 and thereafter.......................................... %
Similar Law: As defined in Section 6.02(e).
Stated Principal Balance: As to any Mortgage Loan and date, the unpaid principal balance of
such Mortgage Loan as of the Due Date immediately preceding such date as specified in the amortization schedule
at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous partial Principal Prepayments and Liquidation
Proceeds allocable to principal (other than with respect to any Liquidated Mortgage Loan) and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor, and after
giving effect to any Deficient Valuation.
Subordinate Certificates: The Class B Certificates.
Subordinate Percentage: As of any Distribution Date, 100% minus the Senior Percentage for such
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date, 100% minus the Senior
Prepayment Percentage for such Distribution Date.
Subordinate Principal Distribution Amount: With respect to any Distribution Date, an amount
equal to the sum of (i) the Subordinate Percentage of the applicable Non-PO Percentage of all amounts described
in clauses (a) through (d) of the definition of “Non-PO Principal Amount” for such Distribution Date and (ii) the
Subordinate Prepayment Percentage of the applicable Non-PO Percentage of the amounts described in clauses (e) and
(f) of the definition of “Non-PO Principal Amount” for such Distribution Date.
Subservicer: Any Person with which the Servicer has entered into a Subservicing Agreement and
which satisfies the requirements set forth therein.
Subservicing Agreement: Any subservicing agreement (which, in the event the Subservicer is an
affiliate of the Servicer, need not be in writing) between the Servicer and any Subservicer relating to servicing
and/or administration of certain Mortgage Loans as provided in Section 3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a Defective Mortgage Loan which
must, on the date of such substitution (i) have a Stated Principal Balance, after deduction of the principal
portion of the Monthly Payment due in the month of substitution, not in excess of, and not more than 10% less
than, the Stated Principal Balance of the Defective Mortgage Loan; (ii) have a Net Mortgage Interest Rate equal
to that of the Defective Mortgage Loan; (iii) have a Loan-to-Value Ratio not higher than that of the Defective
Mortgage Loan; (iv) have a remaining term to maturity not greater than (and not more than one year less than)
that of the Defective Mortgage Loan; and (v) comply with each Mortgage Loan representation and warranty set forth
in the Sale Agreement relating to the Defective Mortgage Loan. More than one Substitute Mortgage Loan may be
substituted for a Defective Mortgage Loan if such Substitute Mortgage Loans meet the foregoing attributes in the
aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
Tax Matters Person: Any person designated as “tax matters person” in accordance with Section
5.06 and the manner provided under Treasury Regulation § 1.860F-4(d) and Treasury Regulation § 301.6231(a)(7)-1.
Telerate page 3750: As defined in Section 5.09.
Transaction Party: As defined in Section 11.02(a).
Treasury Regulations: The final and temporary regulations promulgated under the Code by the
U.S. Department of the Treasury.
Trust: The trust created by this Agreement.
Trust Estate: The corpus of the Trust created to the extent described herein, consisting of
the Mortgage Loans, such assets as shall from time to time be identified as deposited in the Servicer Custodial
Account or the Certificate Account, in accordance with this Agreement, REO Property, the Primary Insurance
Policies and any other Required Insurance Policy.
Trustee: , and its successors-in-interest and, if a successor trustee is appointed
hereunder, such successor, as trustee.
Trustee Fee: As to any Distribution Date, an amount equal to one-twelfth of the Trustee Fee
Rate multiplied by the aggregate Stated Principal Balance of the Mortgage Loans immediately following the Due
Date in the month preceding the month in which such Distribution Date occurs.
Trustee Fee Rate: With respect to each Mortgage Loan, % per annum.
Trustee Information: As specified in Section 11.05(a)(i)(A).
Uncertificated Lower-Tier Interest: A regular interest in the Lower-Tier REMIC which is held
as an asset of the Upper-Tier REMIC and is entitled to monthly distributions as provided in Section 5.02(a)
hereof. Any of the Class A-L1, Class A-L3, Class A-L4, Class A-LPO, Class A-LUR, Class A-LWIO, Class B-L1, Class
B-L2, Class B-L3, Class B-L4, Class B-L5 and Class B-L6 Interests are Uncertificated Lower-Tier Interests.
Underwriting Guidelines: The underwriting guidelines of .
Upper-Tier Certificate: Any one of the Class A Certificates (other than the Class A-LR
Certificate) and the Class B Certificates.
Upper-Tier Certificate Account: The separate Eligible Account established and maintained by
the Trustee pursuant to Section 3.08(f).
Upper-Tier REMIC: As defined in the Preliminary Statement, the assets of which consist of the
Uncertificated Lower-Tier Interests and such amounts as shall from time to time be held in the Upper-Tier
Certificate Account.
U.S. Person: A citizen or resident of the United States, a corporation or partnership (unless,
in the case of a partnership, Treasury Regulations are adopted that provide otherwise) created or organized in or
under the laws of the United States, any state thereof or the District of Columbia, including an entity treated
as a corporation or partnership for federal income tax purposes, an estate whose income is subject to United
States federal income tax regardless of its source, or a trust if a court within the United States is able to
exercise primary supervision over the administration of such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of such trust (or, to the extent provided in applicable Treasury
Regulations, certain trusts in existence on August 20, 1996 which are eligible to elect to be treated as U.S.
Persons).
Voting Rights: The portion of the voting rights of all of the Certificates which is allocated
to any Certificate. As of any date of determination, (a) % of all Voting Rights shall be allocated to the
Holders of the Residual Certificates, (b) % of all Voting Rights shall be allocated to the Holders of the
Class A-5 Certificates, (c) % of all Voting Rights shall be allocated to the Holders of the Class A-WIO
Certificates and (d) the remaining Voting Rights shall be allocated among Holders of the remaining Classes of
Certificates in proportion to the Certificate Balances of their respective Certificates on such date.
Section 1.02. Interest Calculations. All calculations of interest will be made on a 360-day year consisting
of twelve 30-day months. All dollar amounts calculated hereunder shall be rounded to the nearest xxxxx with
one-half of one xxxxx being rounded down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof, hereby sells,
transfers, assigns, sets over and otherwise conveys to the Trustee on behalf of the Trust for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Mortgage
Loans, including all interest and principal received on or with respect to the Mortgage Loans (other than
payments of principal and interest due and payable on the Mortgage Loans on or before the Cut-Off Date). The
foregoing sale, transfer, assignment and set over does not and is not intended to result in a creation of an
assumption by the Trustee of any obligation of the Depositor or any other Person in connection with the Mortgage
Loans or any agreement or instrument relating thereto, except as specifically set forth herein.
(b) In connection with such transfer and assignment, the Depositor has delivered or caused
to be delivered to the Trustee, for the benefit of the Certificateholders, the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed by manual or facsimile signature in the following form: “Pay to
the order of , as Trustee, without recourse,” with all necessary intervening
endorsements showing a complete chain of endorsement from the originator to the Trustee (each such
endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note);
(ii) except as provided below, the original recorded Mortgage with evidence of a recording thereon, or if any
such Mortgage has not been returned from the applicable recording office or has been lost, or if such
public recording office retains the original recorded Mortgage, a copy of such Mortgage certified by the
Depositor as being a true and correct copy of the Mortgage;
(iii) subject to the provisos at the end of this paragraph, a duly executed Assignment of Mortgage to
“ , as trustee for the holders of the Wachovia Mortgage Loan Trust, Xxx.XXX Mortgage
Pass-Through Certificates, Series 200 - Certificates” (which may be included in a blanket assignment
or assignments), together with, except as provided below, originals of all interim recorded assignments
of such mortgage or a copy of such interim assignment certified by the Depositor as being a true and
complete copy of the original recorded intervening assignments of Mortgage (each such assignment, when
duly and validly completed, to be in recordable form and sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment relates); provided that, if
the related Mortgage has not been returned from the applicable public recording office, such Assignment
of Mortgage may exclude the information to be provided by the recording office; and provided, further,
if the related Mortgage has been recorded in the name of Mortgage Electronic Registration Systems, Inc.
(“MERS”) or its designee, no Assignment of Mortgage in favor of the Trustee will be required to be
prepared or delivered and instead, the Servicer shall take all actions as are necessary to cause the
Trust to be shown as the owner of the related Mortgage Loan on the records of MERS for purposes of the
system of recording transfers of beneficial ownership of mortgages maintained by MERS;
(iv) the originals of all assumption, modification, consolidation or extension agreements, if any, with
evidence of recording thereon, if any;
(v) the original or duplicate original mortgagee title insurance policy and all riders thereto;
(vi) the original of any guarantee executed in connection with the Mortgage Note;
(vii) for each Mortgage Loan, if any, which is secured by a residential long-term lease, a copy of the lease
with evidence of recording indicated thereon, or, if the lease is in the process of being recorded, a
photocopy of the lease, certified by an officer of the respective prior owner of such Mortgage Loan or
by the applicable title insurance company, closing/settlement/escrow agent or company or closing
attorney to be a true and correct copy of the lease transmitted for recordation;
(viii) the original of any security agreement, chattel mortgage or equivalent document executed in connection
with the Mortgage; and
(ix) for each Mortgage Loan secured by Co-op Shares, the originals of the following documents or instruments:
(A) The stock certificate;
(B) The stock power executed in blank;
(C) The executed proprietary lease;
(D) The executed recognition agreement;
(E) The executed assignment of recognition agreement, if any;
(F) The executed UCC-1 financing statement with evidence of recording thereon; and
(G) Executed UCC-3 financing statements or other appropriate UCC financing statements required by state law,
evidencing a complete and unbroken line from the mortgagee to the Trustee with evidence of recording
thereon (or in a form suitable for recordation).
provided, however, that on the Closing Date, with respect to item (iii), the Depositor has delivered to the
Trustee a copy of such Assignment of Mortgage in blank and has caused the Servicer to retain the completed
Assignment of Mortgage for recording as described below, unless such Mortgage has been recorded in the name of
MERS or its designee. In addition, if the Depositor is unable to deliver or cause the delivery of any original
Mortgage Note due to the loss of such original Mortgage Note, the Depositor may deliver a copy of such Mortgage
Note, together with a lost note affidavit, and shall thereby be deemed to have satisfied the document delivery
requirements of this Section 2.01(b). As set forth on Exhibit L attached hereto is a list of all states where
recordation is required by either Rating Agency to obtain the initial ratings of the Certificates. The Trustee
may rely and shall be protected in relying upon the information contained in such Exhibit L.
If in connection with any Mortgage Loans, the Depositor cannot deliver (A) the Mortgage,
(B) all interim recorded assignments, (C) all assumption, modification, consolidation or extension agreements, if
any, or (D) the lender’s title policy (together with all riders thereto) satisfying the requirements of clause
(ii), (iii), (iv) or (v) above, respectively, concurrently with the execution and delivery hereof because such
document or documents have not been returned from the applicable public recording office in the case of clause
(ii), (iii) or (iv) above, or because the title policy has not been delivered to either the Servicer or the
Depositor by the applicable title insurer in the case of clause (v) above, the Depositor shall promptly deliver
or cause to be delivered to the Trustee or the Custodian on behalf of the Trustee, in the case of clause (ii),
(iii) or (iv) above, such Mortgage, such interim assignment or such assumption, modification, consolidation or
extension agreement, as the case may be, with evidence of recording indicated thereon upon receipt thereof from
the public recording office, but in no event shall any such delivery of any such documents or instruments be made
later than one year following the Closing Date, unless, in the case of clause (ii), (iii) or (iv) above, there
has been a continuing delay at the applicable recording office or, in the case of clause (v), there has been a
continuing delay at the applicable insurer and the Depositor has delivered the Officer’s Certificate to such
effect to the Trustee. The Depositor shall forward or cause to be forwarded to the Trustee (1) from time to time
additional original documents evidencing an assumption or modification of a Mortgage Loan and (2) any other
documents required to be delivered by the Depositor or the Servicer to the Trustee or the Custodian on the
Trustee’s behalf. In the event that the original Mortgage is not delivered and in connection with the payment in
full of the related Mortgage Loan the public recording office requires the presentation of a “lost instruments
affidavit and indemnity” or any equivalent document, because only a copy of the Mortgage can be delivered with
the instrument of satisfaction or reconveyance, the Servicer shall prepare, execute and deliver or cause to be
prepared, executed and delivered, on behalf of the Trust, such a document to the public recording office.
As promptly as practicable subsequent to such transfer and assignment, and in any event, within
30 days thereafter, the Servicer shall (except for any Mortgage which has been recorded in the name of MERS or
its designee) (I) cause each Assignment of Mortgage to be in proper form for recording in the appropriate public
office for real property records within 30 days of the Closing Date and (II) at the Depositor’s expense, cause to
be delivered for recording in the appropriate public office for real property records the Assignments of the
Mortgages to the Trustee, except that, with respect to any Assignment of a Mortgage as to which the Servicer has
not received the information required to prepare such assignment in recordable form, the Servicer’s obligation to
do so and to deliver the same for such recording shall be as soon as practicable after receipt of such
information and in any event within 30 days after the receipt thereof and, no recording of an Assignment of
Mortgage will be required in a state if either (i) the Depositor furnishes to the Trustee an unqualified Opinion
of Counsel reasonably acceptable to the Trustee to the effect that recordation of such assignment is not
necessary under applicable state law to preserve the Trustee’s interest in the related Mortgage Loan against the
claim of any subsequent transferee of such Mortgage Loan or any successor to, or creditor of, the Depositor or
the originator of such Mortgage Loan or (ii) the recordation of an Assignment of Mortgage in such state is not
required by either Rating Agency in order to obtain the initial ratings on the Certificates on the Closing Date.
In the case of Mortgage Loans that have been prepaid in full as of the Closing Date, the
Depositor, in lieu of delivering the above documents to the Trustee, or the Custodian on the Trustee’s behalf,
will cause the Servicer to deposit in the Servicer Custodial Account the portion of such payment that is required
to be deposited in the Servicer Custodial Account pursuant to Section 3.08.
Section 2.02. Acceptance by the Trustee of the Mortgage Loans. Subject to the provisions of the following
paragraph, the Trustee declares that it, or the Custodian as its agent, will hold the documents referred to in
Section 2.01 and the other documents delivered to it constituting the Mortgage Files, and that it will hold such
other assets as are included in the Trust Estate, in trust for the exclusive use and benefit of all present and
future Certificateholders.
Within 90 days after the execution and delivery of this Agreement, the Trustee shall review, or
cause the Custodian to review, the Mortgage Files in its possession. If, in the course of such review, the
Trustee or the Custodian finds any document constituting a part of a Mortgage File which does not meet the
requirements of Section 2.01 or is omitted from such Mortgage File, the Trustee shall promptly so notify the
Servicer and the Depositor, or shall cause the Custodian to promptly so notify the Servicer and the Depositor.
In performing any such review, the Trustee or the Custodian may conclusively rely on the purported genuineness of
any such document and any signature thereon. It is understood that the scope of the Trustee’s or the Custodian’s
review of the Mortgage Files is limited solely to confirming that the documents listed in Section 2.01 have been
received and further confirming that any and all documents delivered pursuant to Section 2.01 appear on their
face to have been executed and relate to the Mortgage Loans identified in the Mortgage Loan Schedule. Neither
the Trustee nor the Custodian shall have any responsibility for determining whether any document is valid and
binding, whether the text of any assignment or endorsement is in proper or recordable form, 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. The Depositor hereby covenants and agrees that it will
promptly correct or cure such defect within 90 days from the date it was so notified of such defect and, if the
Depositor does not correct or cure such defect within such period, the Depositor will either (a) substitute for
the related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth below or (b) purchase such Mortgage Loan from the Trustee at the Repurchase
Price for such Mortgage Loan; provided, however, that in no event shall such a substitution occur more than two
years from the Closing Date; provided, further, that such substitution or repurchase shall occur within 90 days
of when such defect was discovered if such defect will cause the Mortgage Loan not to be a “qualified mortgage”
within the meaning of Section 860G(a)(3) of the Code.
With respect to each Substitute Mortgage Loan the Depositor shall deliver to the Trustee, for
the benefit of the Certificateholders, the Mortgage Note, the Mortgage, the related Assignment of Mortgage
(except for any Mortgage which has been recorded in the name of MERS or its designee), and such other documents
and agreements as are otherwise required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution is permitted to be made in any calendar month after the
Determination Date for such month. Monthly Payments due with respect to any such Substitute Mortgage Loan in the
month of substitution shall not be part of the Trust Estate and will be retained by the Depositor. For the month
of substitution, distributions to Certificateholders will include the Monthly Payment due for such month on any
Defective Mortgage Loan for which the Depositor has substituted a Substitute Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders
to reflect the removal of each Mortgage Loan that has become a Defective Mortgage Loan and the substitution of
the Substitute Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan Schedule to the
Trustee and the Custodian. Upon such substitution, each Substitute Mortgage Loan shall be subject to the terms
of this Agreement in all respects, and the Depositor shall be deemed to have made to the Trustee with respect to
such Substitute Mortgage Loan, as of the date of substitution, the representations and warranties made pursuant
to Section 2.04. Upon any such substitution and the deposit to the Servicer Custodial Account of any required
Substitution Adjustment Amount (as described in the next paragraph) and receipt of a Request for Release, the
Trustee shall release, or shall direct the Custodian to release, the Mortgage File relating to such Defective
Mortgage Loan to the Depositor and shall execute and deliver at the Depositor’s direction such instruments of
transfer or assignment prepared by the Depositor, in each case without recourse, as shall be necessary to vest
title in the Depositor, or its designee, to the Trustee’s interest in any Defective Mortgage Loan substituted for
pursuant to this Section 2.02.
For any month in which the Depositor substitutes one or more Substitute Mortgage Loans for one
or more Defective Mortgage Loans, the amount (if any) by which the aggregate principal balance of all such
Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of
all such Defective Mortgage Loans (after application of the principal portion of the Monthly Payments due in the
month of substitution) (the “Substitution Adjustment Amount”) plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Defective Mortgage Loans shall be deposited into the Certificate
Account by the Depositor on or before the Remittance Date for the Distribution Date in the month succeeding the
calendar month during which the related Mortgage Loan is required to be purchased or replaced hereunder.
The Trustee shall retain or shall cause the Custodian to retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set forth herein. The Servicer shall
promptly deliver to the Trustee, upon the execution or, in the case of documents requiring recording, receipt
thereof, the originals of such other documents or instruments constituting the Mortgage File as come into the
Servicer’s possession from time to time.
It is understood and agreed that the obligation of the Depositor to substitute for or to
purchase any Mortgage Loan which does not meet the requirements of Section 2.01 shall constitute the sole remedy
respecting such defect available to the Trustee and any Certificateholder against the Depositor.
The Trustee or the Custodian, on behalf of the Trustee, shall be under no duty or obligation
(i) to inspect, review or examine any such documents, instruments, certificates or other papers to determine that
they are genuine, enforceable, or appropriate for the represented purpose or that they are other than what they
purport to be on their face or (ii) to determine whether any Mortgage File should include any of the documents
specified in Section 2.01(b)(iv), (vi), (vii) and (viii).
Section 2.03. Representations, Warranties and Covenants of the Servicer.
The Servicer hereby makes the following representations and warranties to the Depositor and the
Trustee, as of the Closing Date:
(i) The Servicer is a national banking association duly organized, validly existing, and in good standing
under the federal laws of the United States of America and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good standing in each of the states
where a Mortgaged Property is located if the laws of such state require licensing or qualification in
order to conduct business of the type conducted by the Servicer. The Servicer has power and authority
to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be delivered pursuant to this
Agreement) by the Servicer and the consummation of the transactions contemplated hereby have been duly
and validly authorized. This Agreement, assuming due authorization, execution and delivery by the other
parties hereto, evidences the valid, binding and enforceable obligation of the Servicer, subject to
applicable law except as enforceability may be limited by (A) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the enforcement of the rights
of creditors and (B) general principles of equity, whether enforcement is sought in a proceeding in
equity or at law. All requisite corporate action has been taken by the Servicer to make this Agreement
valid and binding upon the Servicer in accordance with its terms.
(ii) No consent, approval, authorization or order is required for the transactions contemplated by this
Agreement from any court, governmental agency or body, or federal or state regulatory authority having
jurisdiction over the Servicer is required or, if required, such consent, approval, authorization or
order has been or will, prior to the Closing Date, be obtained.
(iii) The consummation of the transactions contemplated by this Agreement are in the ordinary course of
business of the Servicer and will not result in the breach of any term or provision of the charter or
by-laws of the Servicer or result in the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which the Servicer or its property is
subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject.
(iv) There is no action, suit, proceeding or investigation pending or, to the best knowledge of the Servicer,
threatened against the Servicer which, either individually or in the aggregate, would result in any
material adverse change in the business, operations, financial condition, properties or assets of the
Servicer, or in any material impairment of the right or ability of the Servicer to carry on its business
substantially as now conducted or which would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with the obligations of the Servicer
contemplated herein, or which would materially impair the ability of the Servicer to perform under the
terms of this Agreement.
The representations and warranties made pursuant to this Section 2.03 shall survive delivery of
the respective Mortgage Files to the Trustee for the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor as to the Mortgage Loans.
The Depositor hereby represents and warrants to the Trustee with respect to the Mortgage Loans
or each Mortgage Loan, as the case may be, as of the date hereof or such other date set forth herein that as of
the Closing Date:
(i) The information set forth in the Mortgage Loan Schedule is true and correct in all material respects.
(ii) There are no delinquent taxes, ground rents, governmental assessments, insurance premiums, leasehold
payments, including assessments payable in future installments or other outstanding charges affecting
the lien priority of the related Mortgaged Property.
(iii) The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in
any respect, except by written instruments, recorded in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage, and which have been delivered to the Trustee;
the substance of any such waiver, alteration or modification has been approved by the insurer under the
Primary Insurance Policy, if any, the title insurer, to the extent required by the related policy, and
is reflected on the Mortgage Loan Schedule. No instrument of waiver, alteration or modification has
been executed, and no Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement approved by the insurer under the Primary Insurance Policy, if any, the title
insurer, to the extent required by the policy, and which assumption agreement has been delivered to the
Trustee.
(iv) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note
and the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto.
(v) All buildings upon the Mortgaged Property are insured by an insurer generally acceptable to prudent
mortgage lending institutions against loss by fire, hazards of extended coverage and such other hazards
as are customary in the area the Mortgaged Property is located, pursuant to insurance policies
conforming to the requirements of Customary Servicing Procedures and this Agreement. All such insurance
policies contain a standard mortgagee clause naming the originator of the Mortgage Loan, its successors
and assigns as mortgagee and all premiums thereon have been paid. If the Mortgaged Property is in an
area identified on a flood hazard map or flood insurance rate map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has been made available), a
flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements of FNMA or FHLMC. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense,
and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor.
(vi) Any and all requirements of any federal, state or local law including, without limitation, usury, truth
in lending, real estate settlement procedures, consumer credit protections, equal credit opportunity or
disclosure laws applicable to the origination and servicing of Mortgage Loan have been complied with.
(vii) The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part (other
than as to Principal Prepayments in full which may have been received prior to the Closing Date), and
the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such satisfaction, cancellation, subordination,
rescission or release.
(viii) The Mortgage is a valid, existing and enforceable first lien on the Mortgaged Property, including all
improvements on the Mortgaged Property subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording being acceptable to
mortgage lending institutions generally and specifically referred to in the lender’s title insurance
policy delivered to the originator of the Mortgage Loan and which do not adversely affect the Appraised
Value of the Mortgaged Property, (C) if the Mortgaged Property consists of Co-op Shares, any lien for
amounts due to the cooperative housing corporation for unpaid assessments or charges or any lien of any
assignment of rents or maintenance expenses secured by the real property owned by the cooperative
housing corporation, and (D) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property. Any security agreement,
chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first lien and first priority security
interest on the property described therein and the Depositor has the full right to sell and assign the
same to the Trustee.
(ix) The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding
obligation of the maker thereof, enforceable in accordance with its terms except as enforceability may
be limited by (A) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the rights of creditors and (B) general principles of equity,
whether enforcement is sought in a proceeding in equity or at law.
(x) All parties to the Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage Loan and
to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties.
(xi) The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor and
there is no obligation for the Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvements and as to disbursements of any
escrow funds therefor have been complied with. All costs fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage have been paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage Note or
Mortgage.
(xii) To the best of the Depositor’s knowledge, all parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and
disposed of such interest, were) in compliance with any and all applicable “doing business” and
licensing requirements of the laws of the state wherein the Mortgaged Property is located.
(xiii) The Mortgage Loan is covered by an ALTA lender’s title insurance policy, acceptable to FNMA or FHLMC,
issued by a title insurer acceptable to FNMA or FHLMC and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions contained in (viii)(A) and
(B) above) the Seller, its successors and assigns as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. The Depositor is the sole insured of such lender’s
title insurance policy, and such lender’s title insurance policy is in full force and effect and will be
in full force and effect upon the consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender’s title insurance policy, and the Depositor has not done, by act
or omission, anything which would impair the coverage of such lender’s title insurance policy.
(xiv) There is no default, breach, violation or event of acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of acceleration, and the
Seller has not waived any default, breach, violation or event of acceleration.
(xv) As of the date of origination of the Mortgage Loan, there had been no mechanics’ or similar liens or
claims filed for work, labor or material (and no rights are outstanding that under law could give rise
to such lien) affecting the relating Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage.
(xvi) All improvements which were considered in determining the Appraised Value of the related Mortgaged
Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property, and
no improvements on adjoining properties encroach upon the Mortgaged Property.
(xvii) The Mortgage Loan was originated by a commercial bank or similar banking institution which is supervised
and examined by a federal or state authority, or by a mortgagee approved by the Secretary of HUD.
(xviii) Principal payments on the Mortgage Loan commenced no more than sixty days after the proceeds of the
Mortgaged Loan were disbursed. The Mortgage Loans are 30-year fixed rate mortgage loans having an
original term to maturity of not more than 30 years, with interest payable in arrears on the first day
of the month. Each Mortgage Note requires a monthly payment which is sufficient to fully amortize the
original principal balance over the original term thereof and to pay interest at the related Mortgage
Interest Rate. The Mortgage Note does not permit negative amortization.
(xix) There is no proceeding pending or, to the Depositor’s knowledge, threatened for the total or partial
condemnation of the Mortgaged Property and such property is in good repair and is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended.
(xx) The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render
the rights and remedies of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (B) otherwise by judicial foreclosure. To the
best of the Depositor’s knowledge, following the date of origination of the Mortgage Loan, the Mortgaged
Property has not been subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor
has not filed for protection under applicable bankruptcy laws. There is no homestead or other exemption
or right available to the Mortgagor or any other person which would interfere with the right to sell the
Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage.
(xxi) The Mortgage Note and Mortgage are on forms acceptable to FNMA or FHLMC.
(xxii) The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding
Mortgage on the Mortgaged Property and the security interest of any applicable security agreement or
chattel mortgage referred to in (viii) above.
(xxiii) The Mortgage File contains an appraisal of the related Mortgaged Property, in a form acceptable to FNMA
or FHLMC and such appraisal complies with the requirements of FIRREA, and was made and signed, prior to
the approval of the Mortgage Loan application, by a Qualified Appraiser.
(xxiv) In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to
serve as such, has been properly designated and currently so serves, and no fees or expenses are or will
become payable by the Trustee to the trustee under the deed of trust, except in connection with a
trustee’s sale after default by the Mortgagor.
(xxv) No Mortgage Loan is a graduated payment mortgage loan, no Mortgage Loan has a shared appreciation or
other contingent interest feature, and no Mortgage Loan contains any “buydown” provision.
(xxvi) The Mortgagor has received all disclosure materials required by applicable law with respect to the
making of mortgage loans of the same type as the Mortgage Loan and rescission materials required by
applicable law if the Mortgage Loan is a Refinance Mortgage Loan.
(xxvii) Each Mortgage Loan with a Loan-to-Value Ratio at origination in excess of 80% will be subject to a
Primary Insurance Policy, issued by an insurer acceptable to FNMA or FHLMC, which insures that portion
of the Mortgage Loan in excess of the portion of the Appraised Value of the Mortgaged Property required
by FNMA. All provisions of such Primary Insurance Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Insurance Policy obligates the Mortgagor thereunder to maintain such
insurance and to pay all premiums and charges in connection therewith at least until Loan-to-Value Ratio
of such Mortgage Loan is reduced to less than 80%. The Mortgage Interest Rate for the Mortgage Loan
does not include any such insurance premium.
(xxviii) To the best of the Depositor’s knowledge as of the date of origination of the Mortgage Loan, (A) the
Mortgaged Property is lawfully occupied under applicable law, (B) all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the appropriate authorities and (C) no
improvement located on or part of the Mortgaged Property is in violation of any zoning law or regulation.
(xxix) The Assignment of Mortgage (except with respect to any Mortgage that has been recorded in the name of
MERS or its designee) is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(xxx) All payments required to be made prior to the Cut-Off Date for such Mortgage Loan under the terms of the
Mortgage Note have been made and no Mortgage Loan has been more than 30 days delinquent more than once
in the twelve month period immediately prior to the Cut-Off Date.
(xxxi) With respect to each Mortgage Loan, the Depositor or Servicer is in possession of a complete Mortgage
File except for the documents which have been delivered to the Trustee or which have been submitted for
recording and not yet returned.
(xxxii) Immediately prior to the transfer and assignment contemplated herein, the Depositor was the sole owner
and holder of the Mortgage Loans. The Mortgage Loans were not assigned or pledged by the Depositor and
the Depositor had good and marketable title thereto, and the Depositor had full right to transfer and
sell the Mortgage Loans to the Trustee free and clear of any encumbrance, participation interest, lien,
equity, pledge, claim or security interest and had full right and authority subject to no interest or
participation in, or agreement with any other party to sell or otherwise transfer the Mortgage Loans.
(xxxiii) Any future advances made prior to the Cut-Off Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to
the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to FNMA
and FHLMC. The consolidated principal amount does not exceed the original principal amount of the
Mortgage Loan.
(xxxiv) The Mortgage Loan was underwritten in accordance with the applicable Underwriting Guidelines in effect
at the time of origination with exceptions thereto exercised in a reasonable manner.
(xxxv) If the Mortgage Loan is secured by a long-term residential lease, (1) the lessor under the lease holds a
fee simple interest in the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor’s consent and the acquisition by the
holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of foreclosure
or provide the holder of the Mortgage with substantially similar protections; (3) the terms of such
lease do not (a) allow the termination thereof upon the lessee’s default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to cure, such default, (b) allow
the termination of the lease in the event of damage or destruction as long as the Mortgage is in
existence, (c) prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the Mortgaged Property or (d)
permit any increase in the rent other than pre-established increases set forth in the lease; (4) the
original term of such lease in not less than 15 years; (5) the term of such lease does not terminate
earlier than five years after the maturity date of the Mortgage Note; and (6) the Mortgaged Property is
located in a jurisdiction in which the use of leasehold estates in transferring ownership in residential
properties is a widely accepted practice.
(xxxvi) The Mortgaged Property is located in the state identified in the Mortgage Loan Schedule and consists of
a parcel of real property with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit, or an individual unit in a planned unit
development, or, in the case of Mortgage Loans secured by Co-op Shares, leases or occupancy agreements;
provided, however, that any condominium project or planned unit development generally conforms with the
applicable Underwriting Guidelines regarding such dwellings, and no residence or dwelling is a mobile
home or a manufactured dwelling.
(xxxvii) The Depositor used no adverse selection procedures in selecting the Mortgage Loan for inclusion in the
Trust Estate.
(xxxviii) Each Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the Code.
(xxxix) With respect to each Mortgage where a lost note affidavit has been delivered to the Trustee in place of
the related Mortgage Note, the related Mortgage Note is no longer in existence.
Notwithstanding the foregoing, no representations or warranties are made by the Depositor as to
the environmental condition of any Mortgaged Property; the absence, presence or effect of hazardous wastes or
hazardous substances on any Mortgaged Property; any casualty resulting from the presence or effect of hazardous
wastes or hazardous substances on, near or emanating from any Mortgaged Property; the impact on
Certificateholders of any environmental condition or presence of any hazardous substance on or near any Mortgaged
Property; or the compliance of any Mortgaged Property with any environmental laws, nor is any agent, Person or
entity otherwise affiliated with the Depositor authorized or able to make any such representation, warranty or
assumption of liability relative to any Mortgaged Property. In addition, no representations or warranties are
made by the Depositor with respect to the absence or effect of fraud in the origination of any Mortgage Loan.
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 or the Custodian and shall inure to
the benefit of the Trustee, notwithstanding any restrictive or qualified endorsement or assignment.
Upon discovery by either the Depositor, the Servicer, the Trustee or the Custodian that any of
the representations and warranties set forth in this Section 2.04 is not accurate (referred to herein as a
“breach”) and that such breach materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties
(any Custodian being so obligated under a Custodial Agreement); provided that any such breach that causes the
Mortgage Loan not to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code shall be
deemed to materially and adversely affect the interests of the Certificateholders. Within 90 days of its
discovery or its receipt of notice of any such breach, the Depositor shall cure such breach in all material
respects or shall either (i) repurchase the Mortgage Loan or any property acquired in respect thereof from the
Trustee at a price equal to the Repurchase Price or (ii) if within two years of the Closing Date, substitute for
such Mortgage Loan in the manner described in Section 2.02; provided that if the breach would cause the Mortgage
Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such repurchase or
substitution must occur within 90 days from the date the breach was discovered. The Repurchase Price of any
repurchase described in this paragraph and the Substitution Adjustment Amount, if any, shall be deposited in the
Certificate Account. It is understood and agreed that the obligation of the Depositor to repurchase or
substitute for any Mortgage Loan or Mortgaged Property as to which such a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to Certificateholders, or to the Trustee on
behalf of Certificateholders, and such obligation shall survive until termination of the Trust hereunder.
Section 2.05. Designation of Interests in the REMIC. The Depositor hereby designates the Classes of Class A
Certificates (other than the Class A-R and Class A-LR Certificates) and the Classes of Class B Certificates as
classes of “regular interests” and the Class A-R Certificate as the single class of “residual interest” in the
Upper-Tier REMIC for the purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively. The Depositor hereby
further designates the Class A-L1 Interest, Class A-L3 Interest, Class A-L4 Interest, Class A-LPO Interest, Class
A-LUR Interest, Class A-LWIO Interest, Class B-L1 Interest, Class B-L2 Interest, Class B-L3 Interest, Class B-L4
Interest, Class B-L5 Interest and Class B-L6 Interest as classes of “regular interests” and the Class A-LR
Certificate as the single class of “residual interest” in the Lower-Tier REMIC for the purposes of Code Sections
860G(a)(1) and 860G(a)(2), respectively.
Section 2.06. Designation of Start-up Day. The Closing Date is hereby designated as the “start-up day” of
each of the Upper-Tier REMIC and Lower-Tier REMIC within the meaning of Section 860G(a)(9) of the Code.
Section 2.07. REMIC Certificate Maturity Date. Solely for purposes of satisfying Section 1.860G-1(a)(4)(iii)
of the Treasury Regulations, the “latest possible maturity date” of the regular interests in the Upper-Tier REMIC
and Lower-Tier REMIC is [______], 20 .
Section 2.08. Execution and Delivery of Certificates. The Trustee (i) acknowledges the issuance of and
hereby declares that it holds the Uncertificated Lower-Tier Interests on behalf of the Upper-Tier REMIC and the
Certificateholders and (ii) has executed and delivered to or upon the order of the Depositor, in exchange for the
Mortgage Loans and Uncertificated Lower-Tier Interests together with all other assets included in the definition
of “Trust Estate,” receipt of which is hereby acknowledged, Certificates in authorized denominations which,
together with the Uncertificated Lower-Tier Interests, evidence ownership of the entire Trust Estate.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage Loans. For and on behalf of the Certificateholders, the Servicer
shall service and administer the Mortgage Loans, all in accordance with the terms of this Agreement, Customary
Servicing Procedures, applicable law and the terms of the Mortgage Notes and Mortgages. In connection with such
servicing and administration, the Servicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 3.02, to do or cause to be done any and all things that it may deem necessary
or desirable in connection with such servicing and administration including, but not limited to, the power and
authority, subject to the terms hereof, (a) to execute and deliver, on behalf of the Certificateholders and the
Trustee, customary consents or waivers and other instruments and documents, (b) to consent, with respect to the
Mortgage Loans it services, to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and
related Mortgages (but only in the manner provided in this Agreement), (c) to collect any Insurance Proceeds and
other Liquidation Proceeds relating to the Mortgage Loans it services, and (d) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage Loan it services. The Servicer shall
represent and protect the interests of the Trust in the same manner as it protects its own interests in mortgage
loans in its own portfolio in any claim, proceeding or litigation regarding a Mortgage Loan and shall not make or
permit any modification, waiver or amendment of any term of any Mortgage Loan, except as provided pursuant to
Section 3.19. Without limiting the generality of the foregoing, the Servicer, in its own name or in the name of
any Subservicer or the Depositor and the Trustee, is hereby authorized and empowered by the Depositor and the
Trustee, when the Servicer or any Subservicer, as the case may be, believes it appropriate in its reasonable
judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any of them,
any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all
other comparable instruments, with respect to the Mortgage Loans it services, and with respect to the related
Mortgaged Properties held for the benefit of the Certificateholders. The Servicer shall prepare and deliver to
the Depositor and/or the Trustee such documents requiring execution and delivery by either or both of them as are
necessary or appropriate to enable the Servicer to service and administer the Mortgage Loans it services to the
extent that the Servicer is not permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee, upon the direction of the Servicer,
shall promptly execute such documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the Servicer shall advance or
cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and assessments on the
Mortgaged Properties relating to the Mortgage Loans it services, which Servicing Advances shall be reimbursable
in the first instance from related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11. The costs incurred by the Servicer, if any, in effecting the timely payments of taxes
and assessments on the Mortgaged Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the Stated Principal Balances of the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
The relationship of the Servicer (and of any successor to the Servicer as 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.
Section 3.02. Subservicing; Enforcement of the Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan it services by a
Subservicer pursuant to a Subservicing Agreement; provided, however, that such subservicing arrangement and the
terms of the related Subservicing Agreement must provide for the servicing of such Mortgage Loan in a manner
consistent with the servicing arrangements contemplated hereunder. Notwithstanding the provisions of any
Subservicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between
the Servicer and a Subservicer or reference to actions taken through a Subservicer or otherwise, the Servicer
shall remain obligated and liable to the Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans it services in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering those Mortgage Loans. All actions of each Subservicer performed
pursuant to the related Subservicing Agreement shall be performed as agent of the Servicer with the same force
and effect as if performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to have received any
collections, recoveries or payments with respect to the Mortgage Loans it services that are received by a
Subservicer regardless of whether such payments are remitted by the Subservicer to the Servicer.
(c) As part of its servicing activities hereunder, the Servicer, for the benefit of the
Trustee and the Certificateholders, shall use its best reasonable efforts to enforce the obligations of each
Subservicer engaged by the Servicer under the related Subservicing Agreement, to the extent that the
non-performance of any such obligation would have a material and adverse effect on a Mortgage Loan. Such
enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing
Agreements and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the
related Mortgage Loans. The Servicer shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such enforcement to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Mortgage Loan or (ii) from a specific recovery of
costs, expenses or attorneys fees against the party against whom such enforcement is directed.
(d) Any Subservicing Agreement entered into by the Servicer shall provide that it may be
assumed or terminated by the Trustee, if the Trustee has assumed the duties of the Servicer, or any successor
Servicer, at the Trustee’s or successor Servicer’s option, as applicable, without cost or obligation to the
assuming or terminating party or the Trust Estate, upon the assumption by such party of the obligations of the
Servicer pursuant to Section 8.05.
Any Subservicing Agreement, and any other transactions or services relating to the Mortgage
Loans involving a Subservicer, shall be deemed to be between the Servicer and such Subservicer alone, and the
Trustee and the Certificateholders shall not be deemed parties thereto and shall have no claims or rights of
action against, rights, obligations, duties or liabilities to or with respect to the Subservicer or its officers,
directors or employees, except as set forth in Section 3.01.
Section 3.03. Fidelity Bond; Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and
omissions insurance policy, with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers relating to the Mortgage Loans it
services. These policies must insure the Servicer against losses resulting from dishonest or fraudulent acts
committed by the Servicer’s personnel, any employees of outside firms that provide data processing services for
the Servicer, and temporary contract employees or student interns. Such fidelity bond shall also protect and
insure the Servicer against losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No provision of this Section 3.03 requiring
such fidelity bond and errors and omissions insurance shall diminish or relieve the Servicer from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such bond and insurance policy shall
be at least equal to the corresponding amounts required by FNMA in the FNMA Servicing Guide or by FHLMC in the
FHLMC Sellers’ & Servicers’ Guide, as amended or restated from time to time, or in an amount as may be permitted
to the Servicer by express waiver of FNMA or FHLMC.
Section 3.04. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable regulatory authorities
supervising Holders of Subordinate Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation required by applicable regulations of the OTS and the FDIC
with respect to the Mortgage Loans. Such access shall be afforded without charge, but only upon reasonable and
prior written request and during normal business hours at the offices designated by the Servicer. Nothing in
this Section 3.04 shall limit the obligation of the Servicer to observe any applicable law and the failure of the
Servicer to provide access as provided in this Section 3.04 as a result of such obligation shall not constitute a
breach of this Section 3.04.
Section 3.05. Maintenance of Primary Mortgage Insurance Policy; Claims.
With respect to each Mortgage Loan with a Loan-to-Value Ratio in excess of 80% or such other
Loan-to-Value Ratio as may be required by law, the Servicer responsible for servicing such Mortgage Loan shall,
without any cost to the Trust Estate, maintain or cause the Mortgagor to maintain in full force and effect a
Primary Insurance Policy insuring that portion of the Mortgage Loan in excess of a percentage in conformity with
FNMA requirements. The Servicer shall pay or shall cause the Mortgagor to pay the premium thereon on a timely
basis, at least until the Loan-to-Value Ratio of such Mortgage Loan is reduced to 80% or such other Loan-to-Value
Ratio as may be required by law. If such Primary Insurance Policy is terminated, the Servicer shall obtain from
another insurer a comparable replacement policy, with a total coverage equal to the remaining coverage of such
terminated Primary Insurance Policy. If the insurer shall cease to be an insurer acceptable to FNMA, the
Servicer shall notify the Trustee in writing, it being understood that the Servicer shall not have any
responsibility or liability for any failure to recover under the Primary Insurance Policy for such reason. If
the Servicer determines that recoveries under the Primary Insurance Policy are jeopardized by the financial
condition of the insurer, the Servicer shall obtain from another insurer which meets the requirements of this
Section 3.05 a replacement insurance policy. The Servicer shall not take any action that would result in
noncoverage under any applicable Primary Insurance Policy of any loss that, but for the actions of the Servicer,
would have been covered thereunder. In connection with any assumption or substitution agreement entered into or
to be entered into pursuant to Section 3.13, the Servicer shall promptly notify the insurer under the related
Primary Insurance Policy, if any, of such assumption or substitution of liability in accordance with the terms of
such Primary Insurance Policy and shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under such Primary Insurance Policy. If such Primary Insurance Policy is terminated
as a result of such assumption or substitution of liability, the Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees to prepare and present, on
behalf of itself, the Trustee and the Certificateholders, claims to the insurer under any Primary Insurance
Policy in a timely fashion in accordance with the terms of such Primary Insurance Policy and, in this regard, to
take such action as shall be necessary to permit recovery under any Primary Insurance Policy respecting a
defaulted Mortgage Loan. Pursuant to Section 3.09(a), any amounts collected by the Servicer under any Primary
Insurance Policy shall be deposited in the related Escrow Account, subject to withdrawal pursuant to Section
3.09(b).
The Servicer will comply with all provisions of applicable state and federal law relating to
the cancellation of, or collection of premiums with respect to, Primary Mortgage Insurance, including, but not
limited to, the provisions of the Homeowners Protection Act of 1998, and all regulations promulgated thereunder,
as amended from time to time.
Section 3.06. Rights of the Depositor and the Trustee in Respect of the Servicer.
The Depositor may, but is not obligated to, enforce the obligations of the Servicer hereunder
and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the
Servicer hereunder and in connection with any such defaulted obligation to exercise the related rights of the
Servicer hereunder; provided that the Servicer shall not be relieved of any of its obligations hereunder by
virtue of such performance by the Depositor or its designee. Neither the Trustee nor the Depositor shall have
any responsibility or liability for any action or failure to act by the Servicer nor shall the Trustee or the
Depositor be obligated to supervise the performance of the Servicer hereunder or otherwise.
Any Subservicing Agreement that may be entered into and any transactions or services relating
to the Mortgage Loans involving a Subservicer in its capacity as such shall be deemed to be between the
Subservicer and the Servicer alone, and the Trustee and Certificateholders shall not be deemed parties thereto
and shall have no claims, rights, obligations, duties or liabilities with respect to the Subservicer except as
set forth in Section 3.07. The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.
Section 3.07. Trustee to Act as Servicer.
If the Servicer shall for any reason no longer be the Servicer hereunder (including by reason
of an Event of Default), the Trustee shall thereupon assume, if it so elects, or shall appoint a successor
Servicer to assume, all of the rights and obligations of the Servicer hereunder arising thereafter (except that
the Trustee shall not be (a) liable for losses of the Servicer pursuant to Section 3.12 or any acts or omissions
of the predecessor Servicer hereunder, (b) obligated to make Advances if it is prohibited from doing so by
applicable law or (c) deemed to have made any representations and warranties of the Servicer hereunder). Any
such assumption shall be subject to Section 7.02. If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee or the successor Servicer may elect to succeed to any
rights and obligations of the Servicer under each Subservicing Agreement or may terminate each Subservicing
Agreement. If it has elected to assume the Subservicing Agreement, the Trustee or the successor Servicer shall
be deemed to have assumed all of the Servicer’s interest therein and to have replaced the Servicer as a party to
any Subservicing Agreement entered into by the Servicer as contemplated by Section 3.02 to the same extent as if
the Subservicing Agreement had been assigned to the assuming party except that the Servicer shall not be relieved
of any liability or obligations under any such Subservicing Agreement.
The Servicer that is no longer the Servicer hereunder shall, upon request of the Trustee, but
at the expense of the Servicer, deliver to the assuming party all documents and records relating to each
Subservicing Agreement or substitute servicing agreement and the Mortgage Loans then being serviced thereunder
and an accounting of amounts collected or held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of such substitute Subservicing Agreement to the assuming party.
Section 3.08. Collection of Mortgage Loan Payments; Servicer Custodial Account; Certificate Account; and
Upper-Tier Certificate Account.
(a) Continuously from the date hereof until the principal and interest on all Mortgage
Loans are paid in full, the Servicer will proceed diligently, in accordance with this Agreement, to collect all
payments due under each of the Mortgage Loans it services when the same shall become due and payable. Further,
the Servicer will in accordance with all applicable law and Customary Servicing Procedures ascertain and estimate
taxes, assessments, fire and hazard insurance premiums, mortgage insurance premiums and all other charges with
respect to the Mortgage Loans it services that, as provided in any Mortgage, will become due and payable to the
end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they
become due and payable. Consistent with the foregoing, the Servicer may in its discretion (i) waive any late
payment charge or any prepayment charge or penalty interest in connection with the prepayment of a Mortgage Loan
it services and (ii) extend the due dates for payments due on a Mortgage Note for a period not greater than 120
days; provided, however, that the Servicer cannot extend the maturity of any such Mortgage Loan past the date on
which the final payment is due on the latest maturing Mortgage Loan as of the Cut-Off Date. In the event of any
such arrangement, the Servicer shall make Periodic Advances on the related Mortgage Loan in accordance with the
provisions of Section 3.18 during the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements. The Servicer shall not be required to
institute or join in litigation with respect to collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise or against any public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other instrument pursuant to which such
payment is required is prohibited by applicable law.
(b) The Servicer shall establish and maintain the Servicer Custodial Account. The
Servicer shall deposit or cause to be deposited into the Servicer Custodial Account, all on a daily basis within
one Business Day of receipt, except as otherwise specifically provided herein, the following payments and
collections remitted by Subservicers or received by the Servicer in respect of the Mortgage Loans subsequent to
the Cut-Off Date (other than in respect of principal and interest due on the Mortgage Loans on or before the
Cut-Off Date) and the following amounts required to be deposited hereunder with respect to the Mortgage Loans it
services:
(i) all payments on account of principal of the Mortgage Loans, including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans, net of the Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds, other than Insurance Proceeds to be
(1) applied to the restoration or repair of the Mortgaged Property, (2) released to the Mortgagor in
accordance with Customary Servicing Procedures or (3) required to be deposited to an Escrow Account
pursuant to Section 3.09(a) and (B) any Insurance Proceeds released from an Escrow Account pursuant to
Section 3.09(b)(iv);
(iv) any amount required to be deposited by the Servicer pursuant to Section 3.08(d) in connection with any
losses on Permitted Investments with respect to the Servicer Custodial Account;
(v) any amounts required to be deposited by the Servicer pursuant to Section 3.14;
(vi) all Repurchase Prices and all Substitution Adjustment Amounts received by the Servicer;
(vii) Periodic Advances made by the Servicer pursuant to Section 3.18 and any payments of Compensating
Interest; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to the Servicer Custodial Account by the Servicer shall
be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment penalties, late payment charges or assumption fees, if collected, need not be deposited
by the Servicer. If the Servicer shall deposit in the Servicer Custodial Account any amount not required to be
deposited, it may at any time withdraw or direct the institution maintaining the Servicer Custodial Account to
withdraw such amount from the Servicer Custodial Account, any provision herein to the contrary notwithstanding.
The Servicer Custodial Account may contain funds that belong to one or more trust funds created for mortgage
pass-through certificates of other series and may contain other funds respecting payments on mortgage loans
belonging to the Servicer or serviced by the Servicer on behalf of others. Notwithstanding such commingling of
funds, the Servicer shall keep records that accurately reflect the funds on deposit in the Servicer Custodial
Account that have been identified by it as being attributable to the Mortgage Loans it services. The Servicer
shall maintain adequate records with respect to all withdrawals made pursuant to this Section 3.08. All funds
required to be deposited in the Servicer Custodial Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.11.
(c) The Trustee shall establish and maintain, on behalf of the Certificateholders, the
Certificate Account. The Trustee shall, promptly upon receipt, deposit in the Certificate Account and retain
therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee pursuant to Section 3.11(a)(viii);
(ii) any amount paid by the Trustee pursuant to Section 3.08(d) in connection with any losses on Permitted
Investments with respect to the Certificate Account; and
(iii) any other amounts deposited hereunder which are required to be deposited in the Certificate Account.
If the Servicer shall remit any amount not required to be remitted, it may at any time direct
the Trustee to withdraw such amount from the Certificate Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer’s Certificate to the Trustee which
describes the amounts deposited in error in the Certificate Account. All funds required to be deposited in the
Certificate Account shall be held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.11. In no event shall the Trustee incur
liability for withdrawals from the Certificate Account at the direction of a the Servicer.
(d) Each institution at which the Servicer Custodial Account or the Certificate Account is
maintained shall invest the funds therein as directed in writing by the Servicer in Permitted Investments, which
shall mature not later than (i) in the case of the Servicer Custodial Account, the Business Day next preceding
the related Remittance Date (except that if such Permitted Investment is an obligation of the institution that
maintains such account, then such Permitted Investment shall mature not later than such Remittance Date) and (ii)
in the case of the Certificate Account, the Business Day next preceding the Distribution Date (except that if
such Permitted Investment is an obligation of the institution that maintains such account, then such Permitted
Investment shall mature not later than such Distribution Date) and, in each case, shall not be sold or disposed
of prior to its maturity. All such Permitted Investments shall be made in the name of the Trustee, for the
benefit of the Certificateholders. All income or gain (net of any losses) realized from any such investment of
funds on deposit in the Servicer Custodial Account shall be for the benefit of the Servicer as servicing
compensation and shall be retained by it monthly as provided herein. All income or gain (net of any losses)
realized from any such investment of funds on deposit in the Certificate Account shall be for the benefit of the
Trustee as additional compensation and shall be retained by it monthly as provided herein. The amount of any
losses realized in the Servicer Custodial Account or the Certificate Account incurred in any such account in
respect of any such investments shall promptly be deposited by the Servicer in the Servicer Custodial Account or
by the Trustee in the Certificate Account, as applicable.
(e) The Servicer shall give notice to the Trustee of any proposed change of the location
of the Servicer Custodial Account maintained by the Servicer not later than 30 days and not more than 45 days
prior to any change thereof. The Trustee shall give notice to the Servicer, each Rating Agency and the Depositor
of any proposed change of the location of the Certificate Account not later than 30 days and not more than 45
days prior to any change thereof. The creation of the Servicer Custodial Account shall be evidenced by a
certification substantially in the form of Exhibit F hereto. A copy of such certification shall be furnished to
the Trustee.
(f) The Trustee shall establish and maintain the Upper-Tier Certificate Account. On each
Distribution Date (other than the Final Distribution Date, if such Final Distribution Date is in connection with
a purchase of the assets of the Trust Estate by the Depositor), the Trustee shall, from funds available on
deposit in the Certificate Account, deposit, in immediately available funds, by wire transfer or otherwise, into
the Upper-Tier Certificate Account, the Lower-Tier Distribution Amount.
Section 3.09. Collection of Taxes, Assessments and Similar Items; Escrow Accounts.
(a) To the extent required by the related Mortgage Note and not violative of current law,
the Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan which
constitute Escrow Payments in trust separate and apart from any of its own funds and general assets and for such
purpose shall establish and maintain one or more escrow accounts (collectively, the “Escrow Account”), titled
“[Insert name of Servicer], in trust for registered holders of Wachovia Asset Funding Trust, LLC Mortgage
Pass-Through Certificates, Series 200 - and various Mortgagors.” The Escrow Account shall be established with
a commercial bank, a savings bank or a savings and loan association that meets the guidelines set forth by FNMA
or FHLMC as an eligible institution for escrow accounts and which is a member of the Automated Clearing House.
In any case, the Escrow Account shall be insured by the FDIC to the fullest extent permitted by law. The
Servicer shall deposit in the appropriate Escrow Account on a daily basis, and retain therein: (i) all Escrow
Payments collected on account of the Mortgage Loans, (ii) all amounts representing proceeds of any hazard
insurance policy which are to be applied to the restoration or repair of any related Mortgaged Property and (iii)
all amounts representing proceeds of any Primary Insurance Policy. Nothing herein shall require the Servicer to
compel a Mortgagor to establish an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may be made by the
Servicer only (i) to effect timely payment of taxes, assessments, mortgage insurance premiums, fire and hazard
insurance premiums, condominium or PUD association dues, or comparable items constituting Escrow Payments for the
related Mortgage, (ii) to reimburse the Servicer out of related Escrow Payments made with respect to a Mortgage
Loan for any Servicing Advance made by the Servicer pursuant to Section 3.09(c) with respect to such Mortgage
Loan, (iii) to refund to any Mortgagor any sums determined to be overages, (iv) for transfer to the Servicer
Custodial Account upon default of a Mortgagor or in accordance with the terms of the related Mortgage Loan and if
permitted by applicable law, (v) for application to restore or repair the Mortgaged Property, (vi) to pay to the
Mortgagor, to the extent required by law, any interest paid on the funds deposited in the Escrow Account,
(vii) to pay to itself any interest earned on funds deposited in the Escrow Account (and not required to be paid
to the Mortgagor), (viii) to the extent permitted under the terms of the related Mortgage Note and applicable
law, to pay late fees with respect to any Monthly Payment which is received after the applicable grace period,
(ix) to withdraw suspense payments that are deposited into the Escrow Account, (x) to withdraw any amounts
inadvertently deposited in the Escrow Account or (xi) to clear and terminate the Escrow Account upon the
termination of this Agreement in accordance with Section 10.01. Any Escrow Account shall not be a part of the
Trust Estate.
(c) With respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of taxes, assessments and other charges which are or may become a lien upon the Mortgaged
Property and the status of Primary Insurance Policy premiums and fire and hazard insurance coverage. The Servicer
shall obtain, from time to time, all bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account, if any,
which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. To the extent that a Mortgage does not provide for Escrow Payments, the
Servicer shall determine that any such payments are made by the Mortgagor. The Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely payments of all such bills
irrespective of each Mortgagor’s faithful performance in the payment of same or the making of the Escrow
Payments. The Servicer shall advance any such payments that are not timely paid, but the Servicer shall be
required so to advance only to the extent that such Servicing Advances, in the good faith judgment of the
Servicer, will be recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.10. Access to Certain Documentation and Information Regarding the Mortgage Loans.
The Servicer shall afford the Trustee reasonable access to all records and documentation
regarding the Mortgage Loans and all accounts, insurance information and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable request and during normal business
hours at the office designated by the Servicer.
Upon reasonable advance notice in writing, the Servicer will provide to each Certificateholder
which is a savings and loan association, bank or insurance company certain reports and reasonable access to
information and documentation regarding the Mortgage Loans sufficient to permit such Certificateholder to comply
with applicable regulations of the OTS or other regulatory authorities with respect to investment in the
Certificates; provided that the Servicer shall be entitled to be reimbursed by each such Certificateholder for
actual expenses incurred by the Servicer in providing such reports and access.
Section 3.11. Permitted Withdrawals from the Servicer Custodial Account; Certificate Account and Upper-Tier
Certificate Account.
(a) The Servicer may from time to time make withdrawals from the Servicer Custodial
Account, for the following purposes:
(i) to pay to the Servicer (to the extent not previously retained), the servicing compensation to which it
is entitled pursuant to Section 3.17, and to pay to the Servicer, as additional servicing compensation,
earnings on or investment income with respect to funds in or credited to the Servicer Custodial Account;
(ii) to reimburse the Servicer for unreimbursed Advances made by it, such right of reimbursement pursuant to
this clause (ii) being limited to amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable Advance previously made;
(iv) to reimburse the Servicer for Insured Expenses from the related Insurance Proceeds;
(v) to pay to the purchaser, with respect to each Mortgage Loan or REO Property that has been purchased
pursuant to Section 2.02 or 2.04, all amounts received thereon after the date of such purchase;
(vi) to reimburse the Servicer or the Depositor for expenses incurred by any of them and reimbursable
pursuant to Section 7.03;
(vii) to withdraw any amount deposited in the Servicer Custodial Account and not required to be deposited
therein;
(viii) on or prior to the Remittance Date, to withdraw an amount equal to the related Pool Distribution Amount,
the related Trustee Fee and any other amounts due to the Trustee under this Agreement for such
Distribution Date, to the extent on deposit, and remit such amount in immediately available funds to the
Trustee for deposit in the Certificate Account; and
(ix) to clear and terminate the Servicer Custodial Account upon termination of this Agreement pursuant to
Section 10.01.
The Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan
basis, for the purpose of justifying any withdrawal from the Servicer Custodial Account pursuant to clauses (i),
(ii), (iv) and (v). Prior to making any withdrawal from the Servicer Custodial Account pursuant to clause (iii),
the Servicer shall deliver to the Trustee an Officer’s Certificate of a Servicing Officer indicating the amount
of any previous Advance determined by the Servicer to be a Nonrecoverable Advance and identifying the related
Mortgage Loan(s) and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Certificate Account for distributions to
Certificateholders in the manner specified in this Agreement. In addition, the Trustee may from time to time
make withdrawals from the Certificate Account for the following purposes:
(i) to pay to itself the Trustee Fee and any other amounts due to the Trustee under this Agreement for the
related Distribution Date;
(ii) to pay to itself as additional compensation earnings on or investment income with respect to funds in
the Certificate Account;
(iii) to withdraw and return to the Servicer any amount deposited in the Certificate Account and not required
to be deposited therein; and
(iv) to clear and terminate the Certificate Account upon termination of the Agreement pursuant to Section
10.01.
(c) Notwithstanding anything herein to the contrary, the Regular Certificates and the
Class A-R Certificate shall not receive distributions directly from the Certificate Account. On each
Distribution Date, funds on deposit in the Upper-Tier Certificate Account shall be used to make payments on the
Regular Certificates and the Class A-R Certificate as provided in Sections 5.01 and 5.02. The Upper-Tier
Certificate Account shall be cleared and terminated upon termination of this Agreement pursuant to Section 10.01.
Section 3.12. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan, fire and hazard insurance
with extended coverage customary in the area where the Mortgaged Property is located in an amount which is at
least equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b) the greater of (i) the
outstanding principal balance owing on the Mortgage Loan and (ii) an amount such that the proceeds of such
insurance shall be sufficient to avoid the application to the Mortgagor or loss payee of any coinsurance clause
under the policy. If the Mortgaged Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards (and such flood insurance has been made available)
the Servicer will cause to be maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration and the requirements of FNMA or FHLMC. The Servicer shall also
maintain on REO Property, fire and hazard insurance with extended coverage in an amount which is at least equal
to the maximum insurable value of the improvements which are a part of such property, liability insurance and, to
the extent required, flood insurance in an amount required above. Any amounts collected by the Servicer under
any such policies (other than amounts to be deposited in an Escrow Account and applied to the restoration or
repair of the property subject to the related Mortgage or property acquired in liquidation of the Mortgage Loan,
or to be released to the Mortgagor in accordance with Customary Servicing Procedures) shall be deposited in the
Servicer Custodial Account, subject to withdrawal pursuant to Section 3.11(a). It is understood and agreed that
no earthquake or other additional insurance need be required by the Servicer of any Mortgagor or maintained on
REO Property, other than pursuant to such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. All policies required hereunder shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer, and shall provide for at least 30 days prior written notice
of any cancellation, reduction in amount or material change in coverage to the Servicer.
The hazard insurance policies for each Mortgage Loan secured by a unit in a condominium
development or planned unit development shall be maintained with respect to such Mortgage Loan and the related
development in a manner which is consistent with FNMA requirements.
Notwithstanding the foregoing, the Servicer may maintain a blanket policy insuring against
hazard losses on all of the Mortgaged Properties relating to the Mortgage Loans in lieu of maintaining the
required hazard insurance policies for each Mortgage Loan and may maintain a blanket policy insuring against
special flood hazards in lieu of maintaining any required flood insurance. Any such blanket policies shall (A)
be consistent with prudent industry standards, (B) name the Servicer as loss payee, (C) provide coverage in an
amount equal to the aggregate unpaid principal balance on the related Mortgage Loans without co-insurance, and
(D) otherwise comply with the requirements of this Section 3.12. Any such blanket policy may contain a
deductible clause; provided that if any Mortgaged Property is not covered by a separate policy otherwise
complying with this Section 3.12 and a loss occurs with respect to such Mortgaged Property which loss would have
been covered by such a policy, the Servicer shall deposit in the Servicer Custodial Account the difference, if
any, between the amount that would have been payable under a separate policy complying with this Section 3.12 and
the amount paid under such blanket policy.
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.13, when any Mortgaged Property subject
to a Mortgage has been conveyed by the Mortgagor, the Servicer shall use reasonable efforts, to the extent that
it has actual knowledge of such conveyance, to enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental regulations, but only to the extent that
such enforcement will not adversely affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to exercise such rights with respect to a Mortgage
Loan if the Person to whom the related Mortgaged Property has been conveyed or is proposed to be conveyed
satisfies the terms and conditions contained in the Mortgage Note and Mortgage related thereto and the consent of
the mortgagee under such Mortgage Note or Mortgage is not otherwise required under such Mortgage Note or Mortgage
as a condition to such transfer. If (i) the Servicer is prohibited by law from enforcing any such due-on-sale
clause, (ii) coverage under any Required Insurance Policy would be adversely affected, (iii) the Mortgage Note
does not include a due-on-sale clause or (iv) nonenforcement is otherwise permitted hereunder, the Servicer is
authorized, subject to Section 3.13(b), 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 Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon; provided that the Mortgage Loan shall continue to be covered (if so covered before the
Servicer enters such agreement) by the applicable Required Insurance Policies. The Servicer, subject to Section
3.13(b), is also authorized with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to which the original Mortgagor is
released from liability and such Person is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Servicer shall not be deemed to be in default under this Section 3.13 by
reason of any transfer or assumption which the Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.
(b) Subject to the Servicer’s duty to enforce any due-on-sale clause to the extent set
forth in Section 3.13(a), in any case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person is to enter into an assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument of release signed by the Trustee
is required releasing the Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and deliver
or cause to be prepared and delivered to the Trustee for signature and shall direct, in writing, the Trustee to
execute the assumption agreement with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other instruments as are reasonable or
necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person. In no event shall the Trustee
incur liability for executing any document under this Section 3.13 at the direction of the Servicer. In
connection with any such assumption, no material term of the Mortgage Note may be changed. In addition, the
substitute Mortgagor and the Mortgaged Property must be acceptable to the Servicer in accordance with its
underwriting standards as then in effect. Together with each such substitution, assumption or other agreement or
instrument delivered to the Trustee for execution by it, the Servicer shall deliver an Officer’s Certificate
signed by a Servicing Officer stating that the requirements of this subsection have been met. The Servicer shall
notify the Trustee that any such substitution or assumption agreement has been completed by forwarding to the
Trustee (or at the direction of the Trustee, the Custodian) the original of such substitution or assumption
agreement, which in the case of the original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Servicer for entering into an assumption or substitution
of liability agreement may be retained by the Servicer as additional master servicing compensation.
Notwithstanding the foregoing, to the extent permissible under applicable law and at the request of the Servicer,
the Trustee shall execute and deliver to the Servicer any powers of attorney and other documents prepared by the
Servicer that are reasonably necessary or appropriate to enable the Servicer to execute any assumption agreement
or modification agreement required to be executed by the Trustee under this Section 3.13.
Section 3.14. Realization Upon Defaulted Mortgage Loans; REO Property.
(a) The Servicer shall use reasonable efforts to foreclose upon or otherwise comparably
convert the ownership of Mortgaged Properties securing such of the Mortgage Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow Customary Servicing Procedures
and shall meet the requirements of the insurer under any Required Insurance Policy; provided, however, that the
Servicer may enter into a special servicing agreement with an unaffiliated Holder of 100% Percentage Interest of
a Class of Class B Certificates or a holder of a class of securities representing interests in the Class B
Certificates alone or together with other subordinated mortgage pass-through certificates. Such agreement shall
be substantially in the form attached hereto as Exhibit K or subject to each Rating Agency’s acknowledgment that
the ratings of the Certificates in effect immediately prior to the entering into such agreement would not be
qualified, downgraded or withdrawn and the Certificates would not be placed on credit review status (except for
possible upgrading) as a result of such agreement. Any such agreement may contain provisions whereby such holder
may instruct the Servicer to commence or delay foreclosure proceedings with respect to delinquent Mortgage Loans
and will contain provisions for the deposit of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have been had the Servicer acted in
accordance with its normal procedures. Notwithstanding the foregoing, the Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards the restoration of any Mortgaged Property
unless it shall determine (i) that such restoration and/or foreclosure will increase the proceeds of liquidation
of the Mortgage Loan after reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through proceeds of the liquidation of the Mortgage Loan (respecting which it shall have
priority for purposes of withdrawals from the Servicer Custodial Account). Any such expenditures shall
constitute Servicing Advances for purposes of this Agreement.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a
determination by the Servicer that the proceeds of such foreclosure would exceed the costs and expenses of
bringing such a proceeding.
With respect to any REO Property, the deed or certificate of sale shall be taken in the name of
the Trustee for the benefit of the Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee’s name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its
individual capacity. The Servicer shall ensure that the title to such REO Property references this Agreement and
the Trustee’s capacity hereunder. Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer manage, conserve, protect and operate such REO Property in
the same manner that it manages, conserves, protects and operates other foreclosed property for its own account
and in the same manner that similar property in the same locality as the REO Property is managed. Incident to
its conservation and protection of the interests of the Certificateholders, the Servicer may rent the same, or
any part thereof, as the Servicer deems to be in the best interest of the Certificateholders for the period prior
to the sale of such REO Property. The Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented, if any, showing the aggregate rental income received and all
expenses incurred in connection with the management and maintenance of such REO Property at such times as is
necessary to enable the Trustee to comply with the reporting requirements of the REMIC Provisions; provided,
however, that the Servicer shall have no duty to rent any REO Property on behalf of the Trust. The net monthly
rental income, if any, from such REO Property shall be deposited in the Servicer Custodial Account no later than
the close of business on each Determination Date. The Servicer shall perform, with respect to the Mortgage Loans,
the tax reporting and withholding required by Sections 1445 and 6050J of the Code with respect to foreclosures
and abandonments, the tax reporting required by Section 6050H of the Code with respect to the receipt of mortgage
interest from individuals and, if required by Section 6050P of the Code with respect to the cancellation of
indebtedness by certain financial entities, by preparing such tax and information returns as may be required, in
the form required. The Servicer shall deliver copies of such reports to the Trustee.
If the Trust acquires any Mortgaged Property as described above or otherwise in connection with
a default or a default which is reasonably foreseeable on a Mortgage Loan, the Servicer shall dispose of such
Mortgaged Property prior to the end of the third calendar year following the year of its acquisition by the Trust
(such period, the “REO Disposition Period”) unless (A) the Trustee shall have been supplied by the Servicer with
an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to the
REO Disposition Period will not result in the imposition of taxes on “prohibited transactions” (as defined in
Section 860F of the Code) on either the Upper-Tier REMIC or the Lower-Tier REMIC or cause either REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding, or (B) the Trustee (at the Servicer’s
expense) or the Servicer shall have applied for, prior to the expiration of the REO Disposition Period, an
extension of the REO Disposition Period in the manner contemplated by Section 856(e)(3) of the Code. If such an
Opinion of Counsel is provided or such an exemption is obtained, the Trust may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel) for the applicable period.
Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust shall be
rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of
the Trust in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject either
REMIC to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged
Property under Section 860G(c) of the Code or otherwise, unless the Servicer has agreed to indemnify and hold
harmless the Trust with respect to the imposition of any such taxes. The Servicer shall identify to the Trustee
any Mortgaged Property relating to a Mortgage Loan held by the Trust for 30 months for which no plans to dispose
of such Mortgaged Property by the Servicer have been made. After delivery of such identification, the Servicer
shall proceed to dispose of any such Mortgaged Property by holding a commercially reasonable auction for such
property.
The income earned from the management of any REO Properties, net of reimbursement to the
Servicer for expenses incurred (including any property or other taxes) in connection with such management and net
of unreimbursed Servicing Fees, Periodic Advances and Servicing Advances, shall be applied to the payment of
principal of and interest on the related defaulted Mortgage Loans (solely for the purposes of allocating
principal and interest, interest shall be treated as accruing as though such Mortgage Loans were still current)
and all such income shall be deemed, for all purposes in this Agreement, to be payments on account of principal
and interest on the related Mortgage Notes and shall be deposited into the Servicer Custodial Account. To the
extent the net income received during any calendar month is in excess of the amount attributable to amortizing
principal and accrued interest at the related Mortgage Interest Rate on the related Mortgage Loan for such
calendar month, such excess shall be considered to be a partial prepayment of principal of the related Mortgage
Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any income from an REO
Property, will be applied in the following order of priority: first, to reimburse the Servicer for any related
unreimbursed Servicing Advances and Servicing Fees; second, to reimburse the Servicer for any unreimbursed
Periodic Advances and to reimburse the Servicer Custodial Account for any Nonrecoverable Advances (or portions
thereof) that were previously withdrawn by the Servicer pursuant to Section 3.11(a)(iii) that related to such
Mortgage Loan; third, to accrued and unpaid interest (to the extent no Periodic Advance has been made for such
amount or any such Periodic Advance has been reimbursed) on the Mortgage Loan or related REO Property, at the
Mortgage Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and
fourth, as a recovery of principal of the Mortgage Loan. Excess Proceeds, if any, from the liquidation of a
Liquidated Mortgage Loan will be retained by the Servicer as additional servicing compensation pursuant to
Section 3.17.
(b) The Servicer shall promptly notify the Depositor of any Mortgage Loan which comes into
default. The Depositor shall be entitled, at its option, to repurchase (i) any such defaulted Mortgage Loan from
the Trust Estate if (a) in the Depositor’s judgment, the default is not likely to be cured by the Mortgagor and
(b) such Mortgage Loan is 180 days or more delinquent or (ii) any Mortgage Loan in the Trust Estate which
pursuant to Section 4(b) of the Mortgage Loan Purchase Agreement the Seller requests the Depositor to repurchase
and to sell to the Seller to facilitate the exercise of the Seller’s rights against the originator or prior
holder of such Mortgage Loan. The purchase price for any such Mortgage Loan shall be 100% of the unpaid
principal balance of such Mortgage Loan plus accrued interest thereon at the Mortgage Interest Rate (less the
Servicing Fee Rate for such Mortgage Loan) through the last day of the month in which such repurchase occurs.
Upon the receipt of such purchase price, the Servicer shall provide to the Trustee the notification required by
Section 3.15 and the Trustee or the Custodian shall promptly release to the Depositor the Mortgage File relating
to the Mortgage Loan being repurchased.
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer of a notification
that payment in full will be escrowed in a manner customary for such purposes, the Servicer will immediately
notify the Trustee (or, at the direction of the Trustee, the Custodian) by delivering, or causing to be
delivered, two copies (one of which will be returned to the Servicer with the Mortgage File) of a Request for
Release (which may be delivered in an electronic format acceptable to the Trustee and the Servicer). Upon
receipt of such request, the Trustee or the Custodian, as applicable, shall within seven Business Days release
the related Mortgage File to the Servicer. The Trustee shall at the Servicer’s direction execute and deliver to
the Servicer the request for reconveyance, deed of reconveyance or release or satisfaction of mortgage or such
instrument releasing the lien of the Mortgage, in each case provided by the Servicer, together with the Mortgage
Note with written evidence of cancellation thereon. If the Mortgage has been recorded in the name of MERS or its
designee, the Servicer shall take all necessary action to reflect the release of the Mortgage on the records of
MERS. Expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the related Mortgagor. From time to time and as shall be appropriate for the servicing or
foreclosure of any Mortgage Loan, including for such purpose collection under any policy of flood insurance, any
fidelity bond or errors or omissions policy, or for the purposes of effecting a partial release of any Mortgaged
Property from the lien of the Mortgage or the making of any corrections to the Mortgage Note or the Mortgage or
any of the other documents included in the Mortgage File, the Trustee or the Custodian, as applicable, shall,
upon delivery to the Trustee (or, at the direction of the Trustee, the Custodian) of a Request for Release signed
by a Servicing Officer, release the Mortgage File within seven Business Days to the Servicer. Subject to the
further limitations set forth below, the Servicer shall cause the Mortgage File so released to be returned to the
Trustee or the Custodian, as applicable, when the need therefor by the Servicer no longer exists, unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited in the Servicer Custodial Account, in which
case the Servicer shall deliver to the Trustee or the Custodian, as applicable, a Request for Release, signed by
a Servicing Officer.
The Trustee shall execute and deliver to the Servicer any powers of attorney and other
documents prepared by the Servicer that are reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement, upon the request of the Servicer. In addition,
upon prepayment in full of any Mortgage Loan or the receipt of notice that funds for such purpose have been
placed in escrow, the Servicer is authorized to give, as attorney-in-fact for the Trustee and the mortgagee under
the Mortgage, an instrument of satisfaction (or Assignment of Mortgage without recourse) regarding the Mortgaged
Property relating to such Mortgage Loan, which instrument of satisfaction or Assignment of Mortgage, as the case
may be, shall be delivered to the Person entitled thereto against receipt of the prepayment in full. If the
Mortgage is registered in the name of MERS or its designee, the Servicer shall take all necessary action to
reflect the release on the records of MERS. In lieu of executing such satisfaction or Assignment of Mortgage, or
if another document is required to be executed by the Trustee, the Servicer may deliver or cause to be delivered
to the Trustee, for signature, as appropriate, any court pleadings, requests for trustee’s sale or other
documents necessary to effectuate such foreclosure or any legal action brought to obtain judgment against the
Mortgagor on the Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce any other
remedies or rights provided by the Mortgage Note or the Mortgage or otherwise available at law or in equity.
Section 3.16. Documents, Records and Funds in Possession of the Servicer to be Held for the Trustee.
The Servicer shall transmit to the Trustee or, at the direction of the Trustee, the Custodian
as required by this Agreement all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Servicer from time to time and shall account fully to the Trustee for any funds received by the
Servicer or which otherwise are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan. The documents constituting the Servicing File shall be held by the Servicer as
custodian and bailee for the Trustee. All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection of principal and interest payments
or from Liquidation Proceeds, including but not limited to, any funds on deposit in the Servicer Custodial
Account, shall be held by the Servicer for and on behalf of the Trustee and shall be and remain the sole and
exclusive property of the Trustee, subject to the applicable provisions of this Agreement. The Servicer also
agrees that it shall not knowingly create, incur or subject any Mortgage File or any funds that are deposited in
the Servicer Custodial Account, Certificate Account or any Escrow Account, or any funds that otherwise are or may
become due or payable to the Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance created by the Servicer, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File or any funds collected on, or in
connection with, a Mortgage Loan, except, however, that the Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to the Servicer under this Agreement.
Section 3.17. Servicing Compensation.
The Servicer shall be entitled out of each payment of interest on a Mortgage Loan (or portion
thereof) and included in the Trust Estate to retain or withdraw from the Servicer Custodial Account an amount
equal to the Servicing Fee for such Distribution Date.
Additional servicing compensation in the form of Excess Proceeds, prepayment penalties,
assumption fees, late payment charges and all income and gain net of any losses realized from Permitted
Investments and all other customary and ancillary income and fees shall be retained by the Servicer to the extent
not required to be deposited in the Servicer Custodial Account pursuant to Section 3.08(b). The Servicer shall be
required to pay all expenses incurred by it in connection with its servicing activities hereunder and shall not
be entitled to reimbursement therefor except as specifically provided in this Agreement.
Notwithstanding the foregoing, with respect to the payment of the Servicing Fee on any
Distribution Date, the aggregate Servicing Fee for the Servicer for such Distribution Date shall be reduced (but
not below zero) by an amount equal to the lesser of (a) the Prepayment Interest Shortfall for such Distribution
Date relating to the Mortgage Loans and (b) one-twelfth of % of the aggregate Stated Principal Balance of
such Mortgage Loans for such Distribution Date (any such reduction, “Compensating Interest”).
Section 3.18. Advances.
The Servicer shall determine on or before each Servicer Advance Date whether it is required to
make a Periodic Advance pursuant to the definition thereof. If the Servicer determines it is required to make a
Periodic Advance, it shall, on or before the Servicer Advance Date, either (a) deposit into the Servicer
Custodial Account an amount equal to the Advance and/or (b) make an appropriate entry in its records relating to
the Servicer Custodial Account that any portion of the Amount Held for Future Distribution in the Servicer
Custodial Account has been used by the Servicer in discharge of its obligation to make any such Periodic
Advance. Any funds so applied shall be replaced by the Servicer by deposit in the Servicer Custodial Account no
later than the close of business on the Business Day preceding the next Servicer Advance Date. The Servicer shall
be entitled to be reimbursed from the Servicer Custodial Account for all Advances of its own funds made pursuant
to this Section 3.18 as provided in Section 3.11(a). The obligation to make Periodic Advances with respect to
any Mortgage Loan shall continue until the ultimate disposition of the REO Property or Mortgaged Property
relating to such Mortgage Loan. The Servicer shall inform the Trustee of the amount of the Periodic Advance to be
made by the Servicer on each Servicer Advance Date no later than the related Remittance Date.
The Servicer shall deliver to the Trustee on the related Servicer Advance Date an Officer’s
Certificate of a Servicing Officer indicating the amount of any proposed Periodic Advance determined by the
Servicer to be a Nonrecoverable Advance. Notwithstanding anything to the contrary, the Servicer shall not be
required to make any Periodic Advance or Servicing Advance that would be a Nonrecoverable Advance.
Section 3.19. Modifications, Waivers, Amendments and Consents.
(a) Subject to this Section 3.19, the Servicer may agree to any modification, waiver,
forbearance, or amendment of any term of any Mortgage Loan without the consent of the Trustee or any
Certificateholder. All modifications, waivers, forbearances or amendments of any Mortgage Loan shall be in
writing and shall be consistent with Customary Servicing Procedures.
(b) The Servicer shall not agree to enter into, and shall not enter into, any
modification, waiver (other than a waiver referred to in Section 3.13, which waiver, if any, shall be governed by
Section 3.13), forbearance or amendment of any term of any Mortgage Loan if such modification, waiver,
forbearance, or amendment would:
(i) affect the amount or timing of any related payment of principal, interest or other amount payable
thereunder;
(ii) in the Servicer’s judgment, materially impair the security for such Mortgage Loan or reduce the
likelihood of timely payment of amounts due thereon; or
(iii) otherwise constitute a “significant modification” within the meaning of Treasury Regulations Section
1.860G-2(b);
unless, in either case, (A) such Mortgage Loan is 90 days or more past due or (B) the Servicer delivers to the
Trustee an Opinion of Counsel to the effect that such modification, waiver, forbearance or amendment would not
affect the REMIC status of either the Upper-Tier REMIC or the Lower-Tier REMIC and, in either case, such
modification, waiver, forbearance or amendment is reasonably likely to produce a greater recovery with respect to
such Mortgage Loan than would liquidation. Subject to Customary Servicing Procedures, the Servicer may permit a
forbearance for a Mortgage Loan which in the Servicer’s judgment is subject to imminent default.
(c) Any payment of interest, which is deferred pursuant to any modification, waiver,
forbearance or amendment permitted hereunder, shall not, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or such modification, waiver or amendment so
permit.
(d) The Servicer may, as a condition to granting any request by a Mortgagor for consent,
modification, waiver, forbearance or amendment, the granting of which is within the Servicer’s discretion
pursuant to the Mortgage Loan and is permitted by the terms of this Agreement, require that such Mortgagor pay to
the Servicer, as additional servicing compensation, a reasonable or customary fee for the additional services
performed in connection with such request, together with any related costs and expenses incurred by the Servicer,
which amount shall be retained by the Servicer as additional servicing compensation.
(e) The Servicer shall notify the Trustee, in writing, of any modification, waiver,
forbearance or amendment of any term of any Mortgage Loan and the date thereof, and shall deliver to the Trustee
(or, at the direction of the Trustee, the Custodian) for deposit in the related Mortgage File, an original
counterpart of the agreement relating to such modification, waiver, forbearance or amendment, promptly (and in
any event within ten Business Days) following the execution thereof; provided, however, that if any such
modification, waiver, forbearance or amendment is required by applicable law to be recorded, the Servicer (i)
shall deliver to the Trustee a copy thereof and (ii) shall deliver to the Trustee such document, with evidence of
notification upon receipt thereof from the public recording office.
ARTICLE IV
SERVICER’S CERTIFICATE AND 1934 ACT REPORTING
Section 4.01. Servicer’s Certificate.
Each month, not later than 12:00 noon Eastern time on the Business Day following each
Determination Date, the Servicer shall deliver to the Trustee, a Servicer’s Certificate (in substance and format
mutually acceptable to the Servicer and the Trustee) certified by a Servicing Officer setting forth the
information necessary in order for the Trustee to perform its obligations under this Agreement. The Trustee may
conclusively rely upon the information contained in a Servicer’s Certificate for all purposes hereunder and shall
have no duty to verify or re-compute any of the information contained therein.
Each such statement shall be provided by the Trustee to any Holder of a Certificate upon
request and shall also, to the extent available, include information regarding delinquencies on Mortgage Loans
providing such statement, indicating the number and aggregate principal amount of Mortgage Loans which are either
one, two, three or more than three months delinquent and the book value of any REO Property.
Section 4.02. Reports to the Securities and Exchange Commission.
The Trustee shall, on behalf of the Trust, cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the 1934 Act and the rules and regulations of the Commission
thereunder, for so long as any Certificates registered under the 1933 Act are outstanding (other than the Current
Report on Form 8-K to be filed by the Depositor in connection with computational materials and the initial
Current Report on Form 8-K to be filed by the Depositor in connection with the issuance of the Certificates).
Upon the request of the Trustee, the Servicer and the Depositor 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 4.03. Annual Xxxxxxxx-Xxxxx Certification.
The Servicer will deliver to the Depositor and the Trustee on or before the earlier of (a)
March 15 of each year or (b) with respect to any calendar year during which the Depositor’s annual report on Form
10-K is required to be filed in accordance with the 1934 Act and the rules and regulations of the Commission,
five Business Days prior to the date on which the annual report on Form 10-K is required to be filed, a
certification, signed by the senior officer in charge of the servicing functions of the Servicer, in the form
attached as Exhibit N hereto or such other form as may be required or permitted by the Commission (the “Form 10-K
Certification”), in compliance with Rules 13a-14 and 15d-14 under the 1934 Act and any additional directives of
the Commission.
Section 4.04. Annual Servicing Criteria Assessment Report.
The Servicer will deliver to the Depositor and the Trustee on or before the earlier of (a)
March 15 of each year or (b) with respect to any calendar year during which the Depositor’s annual report on Form
10-K is required to be filed in accordance with the 1934 Act and the rules and regulations of the Commission,
five Business Days prior to the date on which the annual report on Form 10-K is required to be filed, a report
regarding its assessment of compliance during the preceding calendar year with all applicable servicing criteria
set forth in relevant Commission regulations with respect to mortgage-backed securities transactions taken as a
whole involving the Servicer that are backed by the same types of assets as those backing the Certificates, as
well as similar reports on assessment of compliance received from other parties participating in the servicing
function as required by relevant Commission regulations, as described in Item 1122(a) of Regulation AB. The
[Servicer] shall obtain from all other parties participating in the servicing function any required assessments.
Section 4.05. Annual Independent Public Accountants’ Attestation.
On or before the earlier of (a) March 15 of each year or (b) with respect to any calendar year
during which the Depositor’s annual report on Form 10-K is required to be filed in accordance with the 1934 Act
and the rules and regulations of the Commission, five Business Days prior to the date on which the annual report
is required to be filed, the Servicer at its expense shall cause a firm of independent public accountants, which
shall be members of the American Institute of Certified Public Accountants, to furnish a report to the Depositor
and the Trustee the attestation required under Item 1122(b) of Regulation AB. In rendering such statement, such
firm may rely, as to matters relating to the direct servicing of mortgage loans by Subservicers, upon comparable
statements for examinations conducted by independent public accountants substantially in accordance with
standards established by the American Institute of Certified Public Accountants (rendered within one year of such
statement) with respect to such Subservicers.
Section 4.06. Annual Statement as to Compliance.
The Servicer will deliver to the Depositor and the Trustee on or before the earlier of (a)
March 15 of each year or (b) with respect to any calendar year during which the Depositor’s annual report on Form
10-K is required to be filed in accordance with the 1934 Act and the rules and regulations of the Commission,
five Business Days prior to the date on which the annual report on Form 10-K is required to be filed, a servicer
compliance statement, signed by an authorized officer of the Servicer, as described in Item 1123 of Regulation
AB, to the effect that:
(i) A review of the Servicer’s activities during the reporting period and of its
performance under this Agreement has been made under such officer’s supervision.
(ii) To the best of such officer’s knowledge, based on such review, the Servicer has
fulfilled all of its obligations under this Agreement in all material respects throughout the reporting period
or, if there has been a failure to fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status thereof.
The [Servicer] [Trustee] shall use commercially reasonable efforts to obtain from all other
servicers any additional certifications required under Item 1123 of Regulation AB to the extent required to be
included in a Report on Form 10-K; provided, however, that a failure to obtain such certifications shall not be a
breach of the [Trustee] [Servicer]’s duties hereunder if any such party fails to deliver such a certification.
Section 4.07. Required Information for Form 10-D.
In addition to such information as the Company, as servicer, is obligated to provide pursuant
to other provisions of the Agreement, not later than ten days prior to the deadline for the filing of any
distribution report on Form 10-D in respect of the Certificates, the Servicer shall provide to the Depositor and
the Trustee notice of the occurrence of any of the following events along with all information, data, and
materials related thereto as may be required to be included in the related distribution report on Form 10-D (as
specified in the provisions of Regulation AB referenced below):
(i) any material modifications, extensions or waivers of pool asset terms, fees, penalties or payments
during the distribution period or that have cumulatively become material over time (Item 1121(a)(11) of
Regulation AB);
(ii) material breaches of pool asset representations or warranties or transaction covenants (Item 1121(a)(12)
of Regulation AB); and
(iii) information regarding any material pool asset changes (such as additions, substitutions or repurchases)
(Item 1121(a)(14) of Regulation AB).
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01. Distributions. On each Distribution Date, based solely on the information in the Servicer’s
Certificate, the Trustee shall distribute out of the Upper-Tier Certificate Account or the Certificate Account,
as applicable, (to the extent funds are available therein) to each Certificateholder of record on the related
Record Date (other than as provided in Section 10.01 respecting the final distribution) (a) by check mailed to
such Certificateholder entitled to receive a distribution on such Distribution Date at the address appearing in
the Certificate Register, or (b) upon written request by the Holder of a Regular Certificate (in the event such
Certificateholder owns of record 100% of a Class of Certificates or holds Certificates of any Class having
denominations aggregating $1,000,000 or more), by wire transfer or by such other means of payment as such
Certificateholder and the Trustee shall agree upon, such Certificateholder’s Percentage Interest in the amount to
which the related Class of Certificates is entitled in accordance with the priorities set forth below in
Section 5.02.
None of the Holders of any Class of Certificates, the Depositor, the Servicer or the Trustee
shall in any way be responsible or liable to Holders of any Class of Certificates in respect of amounts properly
previously distributed on any such Class.
Amounts distributed with respect to any Class of Certificates shall be applied first to the
distribution of interest thereon and then to principal thereon.
Section 5.02. Priorities of Distributions.
(a) On each Distribution Date, based solely on the information contained in the Servicer’s
Certificate, the Trustee shall withdraw from the Certificate Account (to the extent funds are available therein)
(1) the amounts payable to the Trustee pursuant to Sections 3.11(b)(i) and 3.11(b)(ii) and shall pay such funds
to itself, and (2) the Pool Distribution Amount, in an amount as specified in written notice received by the
Trustee from the Servicer no later than the related Determination Date, and shall apply such funds, first, to
distributions in respect of the Uncertificated Lower-Tier Interests as specified in this Section 5.02(a) for
deposit in the Upper-Tier Certificate Account and to the Class A-LR Certificate, and then from the Upper-Tier
Certificate Account to distributions on the Certificates in the following order of priority and to the extent of
such funds:
(i) to each Class of Senior Certificates (other than the Class A-PO and Class A-LR Certificates), an amount
allocable to interest equal to the Interest Distribution Amount for such Class and any shortfall being
allocated among such Classes in proportion to the amount of the Interest Distribution Amount that would
have been distributed in the absence of such shortfall;
(ii) concurrently to the Class A Certificates (other than the Class A-PO and Class A-LR Certificates) and the
Class A-PO Certificates, pro rata, based on their respective Senior Principal Distribution Amount and PO
Principal Amount, (A) to the Class A Certificates (other than the Class A-PO Certificates), in an
aggregate amount up to the Senior Principal Distribution Amount, such distribution to be allocated among
such Classes in accordance with Section 5.02(b) and (B) to the Class A-PO Certificates in an aggregate
amount up to the PO Principal Amount;
(iii) to the Class A-PO Certificates, any Class A-PO Deferred Amount, up to the Subordinate Principal
Distribution Amount for such Distribution Date from amounts otherwise distributable first to the Class
B-6 Certificates pursuant to clause (iv)(L) below, second to the Class B-5 Certificates pursuant to
clause (iv)(J) below, third to the Class B-4 Certificates pursuant to clause (iv)(H) below, fourth to
the Class B-3 Certificates pursuant to clause (iv)(F) below, fifth to the Clause B-2 Certificates
pursuant to clause (iv)(D) below and finally to the Class B-1 Certificates pursuant to clause (iv)(B)
below;
(iv) to each Class of Subordinate Certificates, subject to paragraph (d) below, in the following order of
priority:
(A) to the Class B-1 Certificates, an amount allocable to interest equal to the Interest Distribution Amount
for such Class for such Distribution Date;
(B) to the Class B-1 Certificates, an amount allocable to principal equal to its Pro Rata Share for such
Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been reduced to zero;
(C) to the Class B-2 Certificates, an amount allocable to interest equal to the Interest Distribution Amount
for such Class for such Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to principal equal to its Pro Rata Share for such
Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been reduced to zero;
(E) to the Class B-3 Certificates, an amount allocable to interest equal to the Interest Distribution Amount
for such Class for such Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to principal equal to its Pro Rata Share for such
Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been reduced to zero;
(G) to the Class B-4 Certificates, an amount allocable to interest equal to the Interest Distribution Amount
for such Class for such Distribution Date;
(H) to the Class B-4 Certificates, an amount allocable to principal equal to its Pro Rata Share for such
Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been reduced to zero;
(I) to the Class B-5 Certificates, an amount allocable to interest equal to the Interest Distribution Amount
for such Class for such Distribution Date;
(J) to the Class B-5 Certificates, an amount allocable to principal equal to its Pro Rata Share for such
Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been reduced to zero;
(K) to the Class B-6 Certificates, an amount allocable to interest equal to the Interest Distribution Amount
for such Class for such Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to principal equal to its Pro Rata Share for such
Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been reduced to zero; and
(v) to the Holder of the Class A-R Certificate, any amounts remaining in the Upper-Tier Certificate Account,
and to the Holder of the Class A-LR Certificate, any remaining Pool Distribution Amount.
On any Distribution Date, amounts distributed in respect of Class A-PO Deferred Amounts will
not reduce the Class Certificate Balance of the Class A-PO Certificates.
All distributions in respect of the Interest Distribution Amount for a Class will be applied
first with respect to the amount payable pursuant to clause (i) of the definition of “Interest Distribution
Amount,” and second with respect to the amount payable pursuant to clause (ii) of such definition.
On each Distribution Date, each Uncertificated Lower-Tier Interest shall receive distributions
in respect of principal in an amount equal to the amount of principal distributed to their respective
Corresponding Upper-Tier Class or Classes as provided herein. On each Distribution Date, each Uncertificated
Lower-Tier Interest shall receive distributions in respect of interest in an amount equal to the Interest
Distribution Amounts in respect of its Corresponding Upper-Tier Class or Classes, in each case to the extent
actually distributed thereon. Such amounts distributed to the Uncertificated Lower-Tier Interests in respect of
principal and interest with respect to any Distribution Date are referred to herein collectively as the
“Lower-Tier Distribution Amount.”
As of any date, the principal balance (or, in the case of the Class A-LWIO Interest, the
notional amount) of each Uncertificated Lower-Tier Interest equals the aggregate of the Class Certificate
Balances of the respective Corresponding Upper-Tier Class or Classes (or, in the case of the Class A-WIO
Certificates, the Class A-WIO Notional Amount). The initial principal balance of each Uncertificated Lower-Tier
Interest equals the aggregate of the Initial Class Certificate Balances (or notional amount) of the respective
Corresponding Upper-Tier Class or Classes.
The pass-through rate with respect to the Class A-L1 Interest, Class A-LUR Interest, Class B-L1
Interest, Class B-L2 Interest, Class B-L3 Interest, Class B-L4 Interest, Class B-L5 Interest and Class B-L6
Interest shall be % per annum. The pass-through rate with respect to the Class A-L3 Interest shall be %
per annum. The pass-through rate with respect to the Class A-L4 Interest shall be % per annum. The
pass-through rate with respect to the Class A-LWIO Interest shall be a per annum rate equal to (i) the weighted
average of the Net Mortgage Interest Rates of the Premium Mortgage Loans (based on the Stated Principal Balance
of the Premium Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date minus
(ii) %. The Class A-LPO Interest is a principal-only interest and is not entitled to distributions of
interest. Any Non-Supported Interest Shortfalls will be allocated to each Uncertificated Lower-Tier Interest in
the same relative proportions as interest is allocated to such Uncertificated Lower-Tier Interest.
(b) (i) On each Distribution Date prior to the Senior Credit Support Depletion Date,
the amount distributable to the Class A Certificates (other than the Class A-PO Certificates) pursuant to Section
5.02(a)(ii) for such Distribution Date, will be distributed in the following order of priority:
[To Be Provided]
On each Distribution Date on or after the Senior Credit Support Depletion Date, notwithstanding
the allocation and priority set forth above, the portion of the Pool Distribution Amount available to be
distributed as principal of the Class A Certificates (other than the Class A-PO Certificates) shall be
distributed concurrently, as principal, on such Classes, pro rata, on the basis of their respective Class
Certificate Balances, until the Class Certificate Balances thereof are reduced to zero.
(c) On each Distribution Date, Accrued Certificate Interest for each Class of Certificates
for such Distribution Date shall be reduced by such Class’s pro rata share, based on such Class’s Interest
Distribution Amount for such Distribution Date, without taking into account the allocation made by this Section
5.02(c), of (A) Non-Supported Interest Shortfalls, (B) any Excess Losses allocable to interest, (C) on and after
the Senior Credit Support Depletion Date, any other Realized Loss allocable to interest and (D) each Relief Act
Reduction incurred during the calendar month preceding the month of such Distribution Date.
(d) Notwithstanding the priority and allocation contained in Section 5.02(a)(iv), if with
respect to any Class of Subordinate Certificates on any Distribution Date, (i) the aggregate of the Class
Certificate Balances immediately prior to such Distribution Date of all Classes of Subordinate Certificates which
have a higher numerical Class designation than such Class, divided by (ii) the aggregate Class Certificate
Balance of all the Certificates (other than the Class A-PO Certificates) immediately prior to such Distribution
Date (the “Fractional Interest”) is less than the Original Fractional Interest for such Class, no distribution of
principal will be made to any Classes junior to such Class (the “Restricted Classes”) and the Class Certificate
Balances of the Restricted Classes will not be used in determining the Pro Rata Share for the Subordinate
Certificates that are not Restricted Classes. Any funds remaining will be distributed in the order provided in
Section 5.02(a)(iv).
Section 5.03. Allocation of Losses.
(a) On or prior to each Determination Date, the Servicer shall inform the Trustee in
writing with respect to each Mortgage Loan: (1) whether any Realized Loss is a Deficient Valuation or a Debt
Service Reduction, (2) of the amount of such loss or Deficient Valuation, or of the terms of such Debt Service
Reduction and (3) of the total amount of Realized Losses. Based on such information, the Trustee shall determine
the total amount of Realized Losses with respect to the related Distribution Date.
The principal portion of Realized Losses with respect to any Distribution Date shall be
allocated as follows:
(i) the applicable PO Percentage of the principal portion of any Realized Loss with respect to a Discount
Mortgage Loan shall be allocated to the Class A-PO Certificates until the Class Certificate Balance
thereof is reduced to zero; and
(ii) the applicable Non-PO Percentage of the principal portion of any Realized Loss shall be allocated first
to the Subordinate Certificates in reverse order of their respective numerical Class designations
(beginning with the Class of Subordinate Certificates then outstanding with the highest numerical Class
designation) until the respective Class Certificate Balance of each such Class is reduced to zero, and
second to the Senior Certificates (other than the Class A-PO Certificates), pro rata, on the basis of
their respective Class Certificate Balances immediately prior to the related Distribution Date, until
the Class Certificate Balances thereof have been reduced to zero; and
(b) The Class Certificate Balance of the Class A-PO Certificates shall be reduced on each
Distribution Date by the amount, if any, by which the Class Certificate Balance of the Class A-PO Certificates
(after giving effect to the amount to be distributed as a distribution of principal and the allocation of
Realized Losses on such Distribution Date) exceeds the Adjusted Pool Amount (PO Portion) for such Distribution
Date.
The Class Certificate Balance of the Class of Subordinate Certificates then outstanding with
the highest numerical Class designation shall be reduced on each Distribution Date by the amount, if any, by
which the aggregate of the Class Certificate Balances of all outstanding Classes of Certificates (after giving
effect to the amount to be distributed as a distribution of principal and the allocation of Realized Losses and
Class A-PO Deferred Amounts on such Distribution Date) exceeds the Adjusted Pool Amount for such Distribution
Date.
After the Senior Credit Support Depletion Date, the Class Certificate Balances of the Senior
Certificates in the aggregate (other than the Class Certificate Balance of the Class A-PO Certificates) shall be
reduced on each Distribution Date by the amount, if any, by which the aggregate of the Class Certificate Balances
of all outstanding Classes of Senior Certificates (other than Class A-PO Certificates) (after giving effect to
the amount to be distributed as a distribution of principal and the allocation of Realized Losses on such
Distribution Date) exceeds the difference between (i) the Adjusted Pool Amount for such Distribution Date and
(ii) the Adjusted Pool Amount (PO Portion) for such Distribution Date.
Any such reduction shall be allocated among the Senior Certificates (other than the Class A-PO
Certificates) based on the Class Certificate Balances immediately prior to such Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or any reduction in the Class
Certificate Balance of a Class of Certificates pursuant to Section 5.03(b) above shall be allocated among the
Certificates of such Class in proportion to their respective Percentage Interests.
(d) Any allocation of Realized Losses to a Class of Certificates or any reduction in the
Class Certificate Balance of a Class pursuant to Section 5.03(b) above shall be accomplished by reducing the
Class Certificate Balance thereof prior to the distributions made on the related Distribution Date in accordance
with the definition of “Class Certificate Balance.”
(e) With respect to any Distribution Date, Realized Losses allocated pursuant to this
Section 5.03 will be allocated to each Uncertificated Lower-Tier Interest in an amount equal to the amount
allocated to its respective Corresponding Upper-Tier Class or Classes as provided above.
Section 5.04. Statements to Certificateholders.
(a) Prior to the Distribution Date in each month, based upon the information provided to
the Trustee on the Servicer’s Certificates delivered to the Trustee pursuant to Section 4.01, the Trustee shall
determine the following information with respect to such Distribution Date:
(i) the amount allocable to principal, separately identifying the aggregate amount of any Principal
Prepayments and Liquidation Proceeds included therein;
(ii) the amount allocable to interest, any Class Unpaid Interest Shortfall included in such distribution and
any remaining Class Unpaid Interest Shortfall after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of Certificates is less than the full amount that would
be distributable to such Holders if there were sufficient funds available therefor, the amount of the
shortfall and the allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of Certificates after giving effect to the distribution of
principal on such Distribution Date;
(v) the Pool Stated Principal Balance for the following Distribution Date;
(vi) the Senior Percentage, the Priority Percentage and the Subordinate Percentage for the following
Distribution Date;
(vii) the amount of the Servicing Fee paid to or retained by the Servicer with respect to such Distribution
Date;
(viii) the Pass-Through Rate for each such Class of Certificates with respect to such Distribution Date;
(ix) the amount of Periodic Advances included in the distribution on such Distribution Date and the aggregate
amount of Periodic Advances outstanding as of the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage Loans (A) delinquent (exclusive of Mortgage Loans
in foreclosure) (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days and (B) in
foreclosure, as of the close of business on the last day of the calendar month preceding such
Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO Property during the preceding calendar month, the
loan number and Stated Principal Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of acquisition thereof;
(xii) the total number and principal balance of any REO Properties (and market value, if available) as of the
close of business on the Determination Date preceding such Distribution Date;
(xiii) the Senior Prepayment Percentage and the Subordinate Prepayment Percentage for the following
Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred during the preceding calendar month or any Class A-PO
Deferred Amounts for such Distribution Date.
(xv) in the case of the Class A-5 Certificates, the Class A-5 Notional Amount;
(xvi) in the case of the Class A-WIO Certificates, the Class A-WIO Notional Amount for such Distribution Date.
(b) No later than each Distribution Date, the Trustee, based upon information supplied to
it on the Servicer’s Certificates, shall prepare and deliver (by mail, fax or electronically) to each Holder of a
Certificate, each Rating Agency and the Servicer a statement setting forth the information set forth in Section
5.04(a).
In the case of information furnished pursuant to clauses (i), (ii) and (ix) of Section 5.04(a),
the amounts shall be expressed as a dollar amount per Certificate with a $1,000 denomination.
On each Distribution Date, the Trustee shall prepare and furnish to each Financial Market
Service, in electronic or such other format and media mutually agreed upon by the Trustee, the Financial Market
Service and the Depositor, the information contained in the statement described in Section 5.04(a) for such
Distribution Date.
The Trustee shall make available on the Internet each month, to any interested party, the
monthly statement to Certificateholders and each of the reports filed with the Commission by or on behalf of the
Depositor under the 1934 Act with respect to the Certificates as soon as reasonably practicable after the
applicable filing date via the Trustee’s website.
Within a reasonable period of time after the end of each calendar year, the Trustee shall
furnish to each Person who at any time during the calendar year was the Holder of a Certificate, if requested in
writing by such Person, a statement containing the information set forth in clauses (i), (ii) and (vii) of
Section 5.04(a), in each case aggregated for such calendar year or applicable portion thereof during which such
Person was a Certificateholder. Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Trustee pursuant to any requirements of
the Code as from time to time in force.
The Trustee shall deliver to the Holders of Certificates any reports or information the Trustee
is required by this Agreement or the Code, Treasury Regulations or REMIC Provisions to deliver to the Holders of
Certificates, and the Trustee shall prepare and provide to the Certificateholders (by mail, telephone, or
publication as may be permitted by applicable Treasury Regulations) such other reasonable information as the
Trustee deems necessary or appropriate or is required by the Code, Treasury Regulations, and the REMIC Provisions
including, but not limited to, (i) information to be reported to the Holders of the Residual Certificates for
quarterly notices on Schedule Q (Form 1066) (which information shall be forwarded to the Holders of the Residual
Certificates by the Trustee), (ii) information to be provided to the Holders of Certificates with respect to
amounts which should be included as interest and original issue discount in such Holders’ gross income and (iii)
information to be provided to all Holders of Certificates setting forth the percentage of each REMIC’s assets,
determined in accordance with Treasury Regulations using a convention, not inconsistent with Treasury
Regulations, selected by the Trustee in its absolute discretion, that constitute real estate assets under Section
856 of the Code, and assets described in Section 7701(a)(19)(C) of the Code; provided, however, that in setting
forth the percentage of such assets of each REMIC, nothing contained in this Agreement, including without
limitation Section 7.03 hereof, shall be interpreted to require the Trustee periodically to appraise the fair
market values of the assets of the Trust Estate or to indemnify the Trust Estate or any Certificateholders from
any adverse federal, state or local tax consequences associated with a change subsequently required to be made in
the Depositor’s initial good faith determinations of such fair market values (if subsequent determinations are
required pursuant to the REMIC Provisions) made from time to time.
Section 5.05. Tax Returns and Reports to Certificateholders.
(a) For federal income tax purposes, each REMIC shall have a calendar year taxable year
and shall maintain its books on the accrual method of accounting.
(b) The Trustee shall prepare or cause to be prepared, shall execute and shall file or
cause to be filed with the Internal Revenue Service and applicable state or local tax authorities income tax
information returns for each taxable year with respect to each REMIC containing such information at the times and
in the manner as may be required by the Code, the Treasury Regulations or state or local tax laws, regulations,
or rules, and shall furnish or cause to be furnished to each REMIC and the Certificateholders the schedules,
statements or information at such times and in such manner as may be required thereby. Within 30 days of the
Closing Date, the Trustee shall furnish or cause to be furnished to the Internal Revenue Service, on Form 8811 or
as otherwise required by the Code or the Treasury Regulations, the name, title, address and telephone number of
the person that Holders of the Certificates may contact for tax information relating thereto, together with such
additional information at the time or times and in the manner required by the Code or the Treasury Regulations.
Such federal, state, or local income tax or information returns shall be signed by the Trustee, or such other
Person as may be required to sign such returns by the Code, the Treasury Regulations or state or local tax laws,
regulations, or rules.
(c) In the first federal income tax return of each REMIC for its short taxable year ending
December 31, 200 , REMIC status shall be elected for such taxable year and all succeeding taxable years.
(d) The Trustee will maintain or cause to be maintained such records relating to each
REMIC, including but not limited to records relating to the income, expenses, assets and liabilities of the Trust
Estate, and the initial fair market value and adjusted basis of the Trust Estate property and assets determined
at such intervals as may be required by the Code or the Treasury Regulations, as may be necessary to prepare the
foregoing returns, schedules, statements or information.
Section 5.06. Tax Matters Person. The Tax Matters Person shall have the same duties with respect to each
REMIC as those of a “tax matters partner” under Subchapter C of Chapter 63 of Subtitle F of the Code. The Holder
of the Class A-R Certificate is hereby designated as the Tax Matters Person for the Upper-Tier REMIC. The Holder
of the Class A-LR Certificate is hereby designated as the Tax Matters Person for the Lower-Tier REMIC. By their
acceptance of the Class A-R or Class A-LR Certificate, as applicable, each such Holder irrevocably appoints the
Trustee as its agent to perform all of the duties of the Tax Matters Person for the Upper-Tier REMIC and the
Lower-Tier REMIC.
Section 5.07. Rights of the Tax Matters Person in Respect of the Trustee. The Trustee shall afford the Tax
Matters Person, upon reasonable notice during normal business hours, access to all records maintained by the
Trustee in respect of its duties hereunder and access to officers of the Trustee responsible for performing such
duties. Upon request, the Trustee shall furnish the Tax Matters Person with its most recent report of condition
published pursuant to law or to the requirements of its supervisory or examining authority publicly available.
The Trustee shall make available to the Tax Matters Person such books, documents or records relating to the
Trustee’s services hereunder as the Tax Matters Person shall reasonably request. The Tax Matters Person shall
not have any responsibility or liability for any action or failure to act by the Trustee and is not obligated to
supervise the performance of the Trustee under this Agreement or otherwise.
Section 5.08. REMIC Related Covenants. For as long as the Trust shall exist, the Trustee, the Depositor and
the Servicer shall act in accordance herewith to assure continuing treatment of the Upper-Tier REMIC and the
Lower-Tier REMIC as REMICs and avoid the imposition of tax on either REMIC. In particular:
(a) The Trustee shall not create, or permit the creation of, any “interests” in either
REMIC within the meaning of Code Section 860D(a)(2) other than the interests represented by the Regular
Certificates, the Residual Certificates and the Uncertificated Lower-Tier Interests.
(b) Except as otherwise provided in the Code, (i) the Depositor and the Servicer shall not
contribute to the Trust Estate and the Trustee shall not accept property unless substantially all of the property
held in each REMIC constitutes either “qualified mortgages” or “permitted investments” as defined in Code
Sections 860G(a)(3) and (5), respectively, and (ii) no property shall be contributed to each REMIC after the
start-up day unless such contribution would not subject the Trust Estate to the 100% tax on contributions to a
REMIC after the start-up day of the REMIC imposed by Code Section 860G(d).
(c) The Trustee shall not accept on behalf of either REMIC any fee or other compensation
for services and neither the Trustee nor the Servicer shall knowingly accept, on behalf of the Trust Estate any
income from assets other than those permitted to be held by a REMIC.
(d) The Trustee shall not sell or permit the sale of all or any portion of the Mortgage
Loans (other than in accordance with Sections 2.02, 2.04 or 3.14(b)), unless such sale is pursuant to a
“qualified liquidation” of the applicable REMIC as defined in Code Section 860F(a)(4)(A) and in accordance with
Article X.
(e) The Trustee shall maintain books with respect to the Trust and each REMIC on a
calendar year taxable year and on an accrual basis.
Neither the Servicer nor the Trustee shall engage in a “prohibited transaction” (as defined in
Code Section 860F(a)(2)), except that, with the prior written consent of the Servicer and the Depositor, the
Trustee may engage in the activities otherwise prohibited by the foregoing paragraphs (b), (c) and (d); provided
that the Servicer shall have delivered to the Trustee an Opinion of Counsel to the effect that such transaction
will not result in the imposition of a tax on either REMIC and will not disqualify the Trust Estate from
treatment as two REMICs; and, provided further, that the Servicer shall have demonstrated to the satisfaction of
the Trustee that such action will not adversely affect the rights of the Holders of the Certificates and the
Trustee and that such action will not adversely impact the rating of the Certificates.
Section 5.09. Determination of LIBOR. On each Rate Determination Date for a Class of LIBOR Certificates, the
Trustee shall determine LIBOR for the applicable Distribution Date on the basis of the British Bankers’
Association (“BBA”) “Interest Settlement Rate” for one-month deposits in U.S. Dollars as found on Telerate page
3750 as of 11:00 A.M. London time on such Rate Determination Date. As used herein, “Telerate page 3750” means the
display designated as page 3750 on the Bridge Telerate Service.
If on any Rate Determination Date for a Class of LIBOR Certificates, the Trustee is unable to
determine LIBOR on the basis of the method set forth in the preceding paragraph, LIBOR for the applicable
Distribution Date will be whichever is higher of (x) LIBOR as determined on the previous Rate Determination Date
for such Class of LIBOR Certificates or (y) the Reserve Interest Rate. The “Reserve Interest Rate” will be the
rate per annum which the Trustee determines to be either (A) the arithmetic mean (rounding such arithmetic mean
upwards if necessary to the nearest whole multiple of 1/16%) of the one-month U.S. Dollar lending rates that New
York City banks selected by the Trustee are quoting, on the relevant Rate Determination Date, to the principal
London offices of at least two leading banks in the London interbank market or (B) in the event that the Trustee
can determine no such arithmetic mean, the lowest one-month U.S. Dollar lending rate that the New York City banks
selected by the Trustee are quoting on such Rate Determination Date to leading European banks.
If on any Rate Determination Date for a Class of LIBOR Certificates, the Trustee is required
but is unable to determine the Reserve Interest Rate in the manner provided in the preceding paragraph, LIBOR for
the applicable Distribution Date will be LIBOR as determined on the previous Rate Determination Date for such
Class of LIBOR Certificates, or, in the case of the first Rate Determination Date, % per annum.
The establishment of LIBOR by the Trustee and the Trustee’s subsequent calculation of the rates
of interest applicable to each of the LIBOR Certificates in the absence of manifest error, will be final and
binding. After a Rate Determination Date, the Trustee shall provide the Pass-Through Rates of the LIBOR
Certificates for the related Distribution Date to Beneficial Owners or Holders of LIBOR Certificates who place a
telephone call to the Trustee at and make a request therefor.
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates. The Classes of Senior Certificates and the Subordinate Certificates shall be
substantially in the forms set forth in Exhibits X-0, X-0, X-0, X-0, X-0, X-0, A-PO, A-WIO, A-R, A-LR, X-0, X-0,
X-0, X-0, X-0, B-6 and C (reverse of all Certificates) and shall, on original issue, be executed by the Trustee
and shall be countersigned and delivered by the Trustee to or upon the order of the Depositor upon receipt by the
Trustee of the documents specified in Section 2.01. The Senior Certificates (other than the Class A-PO, Class
A-WIO and Class A-R Certificates) shall be available to investors in interests representing minimum dollar
Certificate Balances (or notional amounts) of $ and integral multiples of $ in excess thereof. The
Class A-WIO Certificates shall be available to investors in interests representing minimum dollar Certificate
Balances of $ and integral multiples of $ in excess thereof. The Subordinate Certificates and the
Class A-PO Certificates shall be available to investors in interests representing minimum dollar Certificate
Balances of $ and integral dollar multiples of $ in excess thereof (except one Certificate of such
Class may be issued with a different Certificate Balance. The Class A-R and Class A-LR Certificates shall be in
a minimum denomination of $ . The Senior Certificates (other than the Class A-R and Class A-LR Certificates)
and the Class B-1, Class B-2 and Class B-3 Certificates shall initially be issued in book-entry form through the
Depository and delivered to the Depository or, pursuant to the Depository’s instructions on behalf of the
Depository to, and deposited with, the Certificate Custodian, and all other Classes of Certificates shall
initially be issued in definitive, fully-registered form.
The Certificates shall be executed by manual or facsimile signature on behalf of the Trustee by
an authorized officer or signatory. Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on behalf of the Trustee shall bind the
Trustee, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the
execution and delivery of such Certificates or did not hold such offices or positions at the date of such
Certificate. No Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose,
unless such Certificate shall have been manually countersigned by the Trustee substantially in the form provided
for herein, and such countersignature 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 countersignature.
Section 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at an office or agency in the city in which the
Corporate Trust Office of the Trustee is located a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Trustee shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee shall initially serve as Certificate Registrar for
the purpose of registering Certificates and transfers and exchanges of Certificates as herein provided.
(b) At the option of the Certificateholders, Certificates may be exchanged for other
Certificates of authorized denominations of a like Class, tenor and aggregate Percentage Interest, upon surrender
of the Certificates to be exchanged at any such office or agency. Whenever any Certificates are so surrendered
for exchange, the Trustee shall execute and the Trustee shall authenticate, countersign and deliver the
Certificates which the Certificateholder making the exchange is entitled to receive. Every 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 its attorney duly authorized in writing.
(c) (i) Except as provided in paragraph (c)(iii) below, the Book-Entry Certificates shall
at all times remain registered in the name of the Depository or its nominee and at all times: (A) registration of
the Certificates may not be transferred by the Trustee except to another Depository; (B) the Depository shall
maintain book-entry records with respect to the Certificate Owners and with respect to ownership and transfers of
such Book-Entry Certificates; (C) ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by the Depository; (D) the Depository
may collect its usual and customary fees, charges and expenses from its Depository Participants; (E) the Trustee
shall deal with the Depository as the representative of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of Holders under this Agreement, and requests and directions for and votes of
the Depository shall not be deemed to be inconsistent if they are made with respect to different Certificate
Owners; and (F) the Trustee may rely and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and 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.
(ii) 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 Owner. Each Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as agent in accordance with the
Depository’s normal procedures.
(iii) If (A) (1) the Depository or the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its responsibilities as Depository, and
(2) the Trustee or the Depositor is unable to locate a qualified successor, (B) the Depositor at its
option advises the Trustee in writing that it elects to terminate the book-entry system through the
Depository or (C) after the occurrence of an Event of Default, Certificate Owners representing at least
51% of the aggregate Class Certificate Balances of the Book-Entry Certificates together advise the
Trustee and the Depository through the Depository Participants in writing that the continuation of a
book-entry system through the Depository is no longer in the best interests of the Certificate Owners,
the Trustee shall notify all Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates (the “Definitive
Certificates”) to Certificate Owners requesting the same. Upon surrender to the Trustee of the related
Class of Certificates by the Depository (or by the Certificate Custodian, if it holds such Class on
behalf of the Depository), accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the Servicer, the Depositor or the Trustee
shall be liable for any delay in delivery of such instruction and may conclusively rely on, and shall be
protected in relying on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of certificates to facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates, the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) No transfer of a Private Certificate shall be made unless such transfer is exempt from
the registration requirements of the 1933 Act and any applicable state securities laws or is made in accordance
with the 1933 Act and such laws. In the event of any such transfer, (i) unless such transfer is made in reliance
on Rule 144A under the 1933 Act, the Trustee or the Depositor may require a written Opinion of Counsel (which may
be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Trustee and the
Depositor that such transfer may be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the 1933 Act and such laws or is being made pursuant to the 1933 Act and such laws, which
Opinion of Counsel shall not be an expense of the Trustee or the Depositor and (ii) the Trustee shall require a
certificate from the Certificateholder desiring to effect such transfer substantially in the form attached hereto
as Exhibit G-1 and a certificate from such Certificateholder’s prospective transferee substantially in the form
attached hereto either as Exhibit G-2A or as Exhibit G-2B, which certificates shall not be an expense of the
Trustee or the Depositor; provided that the foregoing requirements under clauses (i) and (ii) shall not apply to
a transfer of a Private Certificate between or among the Depositor, the Seller, their affiliates or both. The
Depositor shall provide to any Holder of a Private Certificate and any prospective transferees designated by any
such Holder, information regarding the related Certificates and the Mortgage Loans and such other information as
shall be necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such
certificate without registration thereof under the 1933 Act pursuant to the registration exemption provided by
Rule 144A. The Holder of a Private Certificate desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if the transfer is not so exempt or
is not made in accordance with such federal and state laws.
(e) No transfer of an ERISA Restricted Certificate shall be made unless the transferee
delivers to the Trustee either (i) a representation letter in the form of Exhibit H from the transferee of such
Certificate, which representation letter shall not be an expense of the Depositor, the Trustee or the Servicer,
or (ii) in the case of any ERISA Restricted Certificate presented for registration in the name of an employee
benefit plan or arrangement, including an individual retirement account, subject to ERISA, the Code, or any
federal, state or local law (“Similar Law”) which is similar to ERISA or the Code (collectively, a “Plan”), or a
trustee or custodian of any of the foregoing, an Opinion of Counsel in form and substance satisfactory to the
Trustee and the Servicer to the effect that the purchase or holding of such ERISA Restricted Certificate by or on
behalf of such Plan will not result in the assets of the Trust Estate being deemed to be “plan assets” and
subject to the prohibited transaction provisions of ERISA, the Code or Similar Law and will not subject the
Trustee, the Depositor or the Servicer 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 Servicer. Any transferee of an ERISA Restricted
Certificate that does not comply with either clause (i) or (ii) of the preceding sentence will be deemed to have
made one of the representations set forth in Exhibit H. Notwithstanding anything else to the contrary herein,
any purported transfer of an ERISA Restricted Certificate to or on behalf of a Plan without the delivery to the
Trustee and the Servicer of an Opinion of Counsel satisfactory to the Trustee and the Servicer as described above
shall be void and of no effect.
Neither the Trustee nor the Certificate Registrar shall have any liability for transfers of
Book-Entry Certificates made through the book-entry facilities of the Depository or between or among any
Depository Participants or Certificate Owners, made in violation of applicable restrictions. 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.
To the extent permitted under applicable law (including, but not limited to, ERISA), the
Trustee shall be under no liability to any Person for any registration of transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 6.02 or for making any payments due on such Certificate
to the Holder thereof or taking any other action with respect to such Holder under the provisions of this
Agreement so long as the transfer was registered by the Trustee in accordance with the foregoing requirements.
(f) Each Person who has or who acquires any Ownership Interest in a Residual Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership Interest in a Residual Certificate
are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual Certificate unless such Ownership Interest
is a pro rata undivided interest.
(iii) In connection with any proposed transfer of any Ownership Interest in a Residual Certificate, the
Trustee shall require delivery to it, in form and substance satisfactory to it, of an affidavit in the
form of Exhibit I hereto from the proposed transferee.
(iv) Notwithstanding the delivery of an affidavit by a proposed transferee under clause (iii) above, if a
Responsible Officer of the Trustee has actual knowledge that the proposed transferee is not a Permitted
Transferee, no transfer of any Ownership Interest in a Residual Certificate to such proposed transferee
shall be effected.
(v) No Ownership Interest in a Residual Certificate may be purchased by or transferred to any Person that is
not a U.S. Person, unless (A) such Person holds such Residual Certificate in connection with the conduct
of a trade or business within the United States and furnishes the transferor and the Trustee with an
effective Internal Revenue Service Form W-8ECI (or successor thereto) or (B) the transferee delivers to
both the transferor and the Trustee an Opinion of Counsel from a nationally-recognized tax counsel to
the effect that such transfer is in accordance with the requirements of the Code and the regulations
promulgated thereunder and that such transfer of a Residual Certificate will not be disregarded for
federal income tax purposes.
(vi) Any attempted or purported transfer of any Ownership Interest in a Residual Certificate in violation of
the provisions of this Section 6.02 shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of the provisions of this Section
6.02, become a Holder of a Residual Certificate, then the prior Holder of such Residual Certificate that
is a Permitted Transferee shall, upon discovery that the registration of transfer of such Residual
Certificate was not in fact permitted by this Section 6.02, be restored to all rights as Holder thereof
retroactive to the date of registration of transfer of such Residual Certificate. The Trustee shall be
under no liability to any Person for any registration of transfer of a Residual Certificate that is in
fact not permitted by this Section 6.02 or for making any distributions due on such Residual Certificate
to the Holder thereof or taking any other action with respect to such Holder under the provisions of the
Agreement so long as the transfer was registered in accordance with this Section 6.02. The Trustee
shall be entitled to recover from any Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions made on such Residual
Certificate. Any such distributions so recovered by the Trustee shall be distributed and delivered by
the Trustee to the prior Holder of such Residual Certificate that is a Permitted Transferee.
(vii) If any Person other than a Permitted Transferee acquires any Ownership Interest in a Residual
Certificate in violation of the restrictions in this Section 6.02, then the Trustee, based on
information provided to the Trustee by the Servicer, will provide to the Internal Revenue Service, and
to the Persons specified in Section 860E(e)(3) and (6) of the Code, information needed to compute the
tax imposed under Section 860E(e) of the Code on transfers of residual interests to disqualified
organizations. The expenses of the Trustee under this clause (vii) shall be reimbursable by the Trust.
(viii) No Ownership Interest in a Residual Certificate shall be acquired by a Plan or any Person acting on
behalf of a Plan.
(g) [Reserved]
(h) No service charge shall be imposed for any transfer or exchange of Certificates of any
Class, but the Trustee 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.
(i) All Certificates surrendered for transfer and exchange shall be destroyed by the
Certificate Registrar.
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) 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 (b) there is delivered to the Trustee, the Depositor and
the Certificate Registrar such security or indemnity reasonably satisfactory to each, to save each of them
harmless, then, in the absence of actual notice to the Trustee or the Certificate Registrar that such Certificate
has been acquired by a bona fide purchaser, the Trustee shall countersign and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor, Class and
Percentage Interest but bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee and the Certificate Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.
Section 6.04. Persons Deemed Owners. Prior to due presentation of a Certificate for registration of
transfer, the Depositor, the Servicer, the Trustee, the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee or the Certificate Registrar may treat the Person 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 Depositor, the Servicer, the Trustee, the Certificate
Registrar or any agent of the Servicer, the Trustee or the Certificate Registrar shall be affected by notice to
the contrary.
ARTICLE VII
THE DEPOSITOR AND THE SERVICER
Section 7.01. Respective Liabilities of the Depositor and the Servicer. The Depositor and the Servicer shall
each be liable in accordance herewith only to the extent of the obligations specifically and respectively imposed
upon and undertaken by the Depositor and the Servicer herein. By way of illustration and not limitation, the
Depositor is not liable for the servicing and administration of the Mortgage Loans, nor is it obligated by
Section 8.01 to assume any obligations of the Servicer or to appoint a designee to assume such obligations, nor
is it liable for any other obligation hereunder that it may, but is not obligated to, assume unless it elects to
assume such obligation in accordance herewith.
Section 7.02. Merger or Consolidation of the Depositor or the Servicer. The Depositor and the Servicer will
each keep in full effect its existence, rights and franchises as a separate entity under the laws governing its
organization, and will each obtain and preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of
this Agreement, the Certificates or any of the Mortgage Loans and to perform its respective duties under this
Agreement.
Any Person into which the Depositor or the Servicer may be merged or consolidated, or any
corporation or other organization resulting from any merger or consolidation to which the Depositor or the
Servicer shall be a party, or any Person succeeding to the business of the Depositor or the Servicer, shall be
the successor of the Depositor or the Servicer, as the case may be, hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to the Servicer shall be qualified to
service mortgage loans on behalf of FNMA or FHLMC.
Section 7.03. Limitation on Liability of the Depositor, the Servicer and Others. None of the Depositor, the
Servicer or any of the directors, officers, employees or agents of the Depositor or of the Servicer shall be
under any liability to the Trust Estate or the Certificateholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Servicer or any such Person against any breach of warranties
or representations made herein or any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director, officer, employee or agent of
the Depositor or the Servicer may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The Depositor, the Servicer and any
director, officer, employee or agent of the Depositor or the Servicer shall be indemnified by the Trust Estate
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 willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. Neither of the Depositor nor the Servicer shall be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that the Depositor or the Servicer may in
its discretion undertake any such action which it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs
and liabilities of the Trust Estate, and the Depositor and the Servicer shall be entitled to be reimbursed
therefor out of amounts attributable to the Mortgage Loans on deposit in the Servicer Custodial Account as
provided by Section 3.11.
Section 7.04. Depositor and Servicer Not to Resign. Subject to the provisions of Section 7.02, neither the
Depositor nor the Servicer shall resign from its respective obligations and duties hereby imposed on it except
upon determination that its duties hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Depositor or the Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee. No such resignation by the Servicer shall become effective
until the Trustee or a successor Servicer shall have assumed the Servicer’s responsibilities and obligations in
accordance with Section 8.05 hereof.
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default. If any one of the following events (“Events of Default”) shall occur and be
continuing:
(a) any failure by the Servicer to deposit amounts in the Servicer Custodial Account in
the amount and manner provided herein so as to enable the Trustee to distribute to Holders of Certificates any
payment required to be made under the terms of such Certificates and this Agreement (other than the payments
required to be made under Section 3.18) which continues unremedied for a period of five days; or
(b) failure on the part of the Servicer duly to observe or perform in any material respect
any other covenants or agreements of the Servicer set forth in the Certificates or in this Agreement, which
covenants and agreements continue unremedied for a period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the Servicer by the Trustee or the
Depositor, or to the Servicer, the Depositor and the Trustee by the Holders of Certificates evidencing Voting
Rights aggregating not less than 25% of all Certificates affected thereby; or
(c) the entry of a decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar proceedings against the Servicer, or for
the winding up or liquidation of the Servicer’s affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(d) the consent by the Servicer to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings
of or relating to the Servicer or of or relating to substantially all of its property; or the Servicer shall
admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(e) the failure of the Servicer to remit any Periodic Advance required to be remitted by
the Servicer pursuant to Section 3.18 which failure continues unremedied at 3:00 p.m. on the related Distribution
Date;
then, and in each and every such case, so long as an Event of Default shall not have been remedied by the
Servicer, either the Trustee or the Depositor may, and at the direction of the Holders of Certificates evidencing
Voting Rights aggregating not less than 51% of all Certificates affected thereby shall, by notice then given in
writing to the Servicer (and to the Trustee, if given by the Depositor, and to the Depositor, if given by the
Trustee), terminate all of the rights and obligations of the Servicer under this Agreement. If an Event of
Default described in clause (e) hereof shall occur, the Trustee shall, by notice to the Servicer, terminate all
of the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and proceeds
thereof and the Trustee or a successor Servicer appointed pursuant to Section 8.05 shall make the Advance which
the Servicer failed to make. On or after the receipt by the Servicer of such written notice, all authority and
power of the 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, unless and until
such time as the Trustee shall appoint a successor Servicer pursuant to Section 8.05, and, without limitation,
the Trustee is hereby authorized and empowered to execute and deliver, on behalf of the 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 the Mortgage Loans and related documents, or otherwise, including, without
limitation, the recordation of the assignments of the Mortgage Loans to it. The Servicer agrees to cooperate with
the Trustee in effecting the termination of the responsibilities and rights of the Servicer hereunder, including,
without limitation, the transfer to the Trustee for the administration by it of all cash amounts that have been
deposited by the Servicer in the Servicer Custodial Account or thereafter received by the Servicer with respect
to the Mortgage Loans. Upon obtaining notice or knowledge of the occurrence of any Event of Default, the Person
obtaining such notice or knowledge shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating Agency. All costs and expenses
(including attorneys’ fees) incurred in connection with transferring the Mortgage Files to the successor Servicer
and amending this Agreement to reflect such succession as Servicer pursuant to this Section 8.01 shall be paid by
the predecessor Servicer. Notwithstanding the termination of the Servicer pursuant hereto, the Servicer shall
remain liable for any causes of action arising out of any Event of Default occurring prior to such termination.
Section 8.02. Remedies of Trustee. During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights specified in Section 8.01, shall
have the right, in its own name as trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect the interests, and enforce the
rights and remedies, of the Certificateholders (including the institution and prosecution of all judicial,
administrative and other proceedings and the filing of proofs of claim and debt in connection therewith). Except
as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of
any other remedy, and each and every remedy shall be cumulative and in addition to any other remedy and no delay
or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a
waiver of any Event of Default.
Section 8.03. Directions by Certificateholders and Duties of Trustee During Event of Default. During the
continuance of any Event of Default, Holders of Certificates evidencing Voting Rights aggregating not less than
25% of each Class of Certificates affected thereby may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee
under this Agreement; provided, however, that the Trustee shall be under no obligation to pursue any such remedy,
or to exercise any of the trusts or powers vested in it by this Agreement (including, without limitation, (a) the
conducting or defending of any administrative action or litigation hereunder or in relation hereto, and (b) the
terminating of the Servicer or any successor Servicer from its rights and duties as servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby and, provided further, that, subject to the provisions of Section 9.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee, based upon an Opinion of Counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith determines
that the action or proceeding so directed would involve it in personal liability or be unjustly prejudicial to
the non-assenting Certificateholders.
Section 8.04. Action upon Certain Failures of the Servicer and upon Event of Default. In the event that the
Trustee shall have actual knowledge of any failure of the Servicer specified in Section 8.01(a) or (b) which
would become an Event of Default upon the Servicer’s failure to remedy the same after notice, the Trustee shall
give notice thereof to the Servicer. If the Trustee shall have knowledge of an Event of Default, the Trustee
shall give prompt written notice thereof to the Certificateholders.
Section 8.05. Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of termination pursuant to
Section 8.01, the Trustee shall be the successor in all respects to the Servicer in its capacity as servicer
under this Agreement and the transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions
hereof or shall appoint a successor pursuant to Section 3.07. Notwithstanding anything provided herein to the
contrary, under no circumstances shall any provision of this Agreement be construed to require the Trustee,
acting in its capacity as successor to the Servicer in its obligation to make Advances, to advance, expend or
risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder if it
shall have reasonable grounds for believing that such funds are non-recoverable. Subject to Section 8.05(b), as
compensation therefor, the Trustee shall be entitled to such compensation as the terminated Servicer would have
been entitled to hereunder if no such notice of termination had been given. Notwithstanding the above, the
Trustee may, if it shall be unwilling so to act, or shall, if it is legally unable so to act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing and home finance institution
having a net worth of not less than $10,000,000 as the successor to the terminated Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of the Servicer hereunder; provided,
however, that any such institution appointed as successor Servicer shall not, as evidenced in writing by each
Rating Agency, adversely affect the then current rating of any Class of Certificates immediately prior to the
termination of the terminated Servicer. The appointment of a successor Servicer shall not affect any liability
of the predecessor Servicer which may have arisen under this Agreement prior to its termination as Servicer, nor
shall any successor Servicer be liable for any acts or omissions of the predecessor Servicer or for any breach by
the Servicer of any of its representations or warranties contained herein or in any related document or
agreement. Pending appointment of a successor to the terminated Servicer hereunder, unless the Trustee is
prohibited by law from so acting, the Trustee shall act in such capacity as provided above. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such
succession.
(b) In connection with the appointment of a successor Servicer or the assumption of the
duties of the Servicer, as specified in Section 8.05(a), the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans serviced by the predecessor Servicer as it and
such successor shall agree; provided, however, that any Person assuming the duties of the Servicer shall pay to
such predecessor an amount equal to the market value of the portion of the Servicing Fee that will accrue in the
future due to the Servicing Fee Rate exceeding % per annum with respect to any Mortgage Loan. The “market
value” of such portion of the Servicing Fee shall be determined by , on the basis of at least two quotations
from third parties actively engaged in the servicing of single-family mortgage loans. If the successor Servicer
does not agree that such market value is a fair price, such successor shall obtain two quotations of market value
from third parties actively engaged in the servicing of single-family mortgage loans. The market value of the
excess portion of the Servicing Fee will then be equal to the average of (i) the lowest figure obtained by ,
and (ii) the highest figure obtained by the successor Servicer. Payment of the amount calculated above shall be
made to , by the successor Servicer no later than the last Business Day of the month in which such successor
Servicer becomes entitled to receive the Servicing Fee under this Agreement. In no event will any portion of the
Trust Estate be used to pay amounts due to under this Section 8.05(b).
(c) Any successor, including the Trustee, to the Servicer as servicer shall during the
term of its service as servicer maintain in force (i) a policy or policies of insurance covering errors and
omissions in the performance of its obligations as servicer hereunder and (ii) a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required pursuant to Section 3.03.
Section 8.06. Notification to Certificateholders. Upon any termination or appointment of a successor to the
Servicer pursuant to this Article VIII, the Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing in the Certificate Register and to each Rating Agency.
ARTICLE IX
THE TRUSTEE
Section 9.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the curing or
waiver of all Events of Default which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. In case an Event of Default has occurred of which a Responsible
Officer of the Trustee shall have actual knowledge (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise as a reasonably prudent investor would exercise or use under the circumstances in the conduct
of such investor’s own affairs.
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.
(b) No provision of this Agreement shall be construed to relieve the Trustee from
liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful
misfeasance; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or waiver of all such Events of
Default 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 by the Depositor or the Servicer and which on their face, do not contradict the requirements of
this Agreement;
(ii) The Trustee (in its individual capacity) shall not be personally liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved
that the Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) The Trustee (in its individual capacity) shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with the direction of
Certificateholders as provided in Section 8.03;
(iv) The Trustee shall not be charged with knowledge of any default (other than a default in payment to the
Trustee) specified in clauses (a) and (b) of Section 8.01 or an Event of Default under clauses (c), (d)
and (e) of Section 8.01 unless a Responsible Officer of the Trustee assigned to and working in the
Corporate Trust Office obtains actual knowledge of such failure or event or any officer of the Trustee
receives written notice of such failure or event at its Corporate Trust Office from the Servicer, the
Depositor or any Certificateholder; and
(v) Except to the extent provided in Section 8.05, no provision in this Agreement shall require the Trustee
to expend or risk its own funds (including, without limitation, the making of any Advance as successor
Servicer) or otherwise incur any personal financial liability in the performance of any of its duties as
Trustee hereunder, or in the exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that repayment of funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
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
believed by it to be genuine and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and
in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived), 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 investor
would exercise or use under the circumstances in the conduct of such investor’s own affairs;
(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 Default hereunder and after the curing or waiving of all Events
of Default 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 document, unless requested in writing so to do
by Holders or Certificate or any Class evidencing, as to such Class, Percentage Interests, aggregating
not less than 50%; provided, however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity against such expense or liability
or payment of such estimated expenses as a condition to so proceeding; and
(vi) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys.
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans. The recitals contained herein and in
the Certificates (other than the execution of, and the counter-signature on the Certificates) shall be taken as
the statements of the Depositor or Servicer, as applicable, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or sufficiency of this Agreement or of the
Certificates or any Mortgage Loans save that the Trustee represents that, assuming due execution and delivery by
the other parties hereto, this Agreement has been duly authorized, executed and delivered by it and constitutes
its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject, as to
enforcement of remedies, to applicable insolvency, receivership, moratorium and other laws affecting the rights
of creditors generally, and to general principles of equity and the discretion of the court (regardless of
whether enforcement of such remedies is considered in a proceeding in equity or at law). The Trustee shall not
be accountable for the use or application by the Depositor of funds paid to the Depositor in consideration of the
assignment of the Mortgage Loans hereunder by the Depositor, or for the use or application of any funds paid to
Subservicers or the Servicer in respect of the Mortgage Loans or deposited into the Servicer Custodial Account,
or any other account hereunder (other than the Certificate Account) by the 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
Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the successor Servicer); 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 Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee
as successor Servicer); the compliance by the Depositor or the Servicer with any warranty or representation made
under this Agreement or in any related document or the accuracy of any such warranty or representation; any
investment of monies by or at the direction of the 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 Servicer (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee as successor
Servicer), any Subservicer or any Mortgagor; any action of the Servicer (other than if the Trustee shall assume
the duties of the Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee
as successor Servicer) or any Subservicer taken in the name of the Trustee; the failure of the 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 Servicer (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee as successor
Servicer); provided, however, that the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement, including, without limitation, the Trustee’s review of the Mortgage Files pursuant
to Section 2.02. The Trustee shall file any financing or continuation statement in any public office at any time
required to maintain the perfection of any security interest or lien granted to it hereunder.
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 it would have if it were not Trustee and may otherwise
deal with the Servicer, any Subservicer or any of their respective affiliates with the same right it would have
if it were not the Trustee.
Section 9.05. Eligibility Requirements for Trustee. The Trustee hereunder shall at all times be (a) an
institution the deposits of which are fully insured by the FDIC and (b) a corporation or banking association
organized and doing business under the laws of the United States of America or of any State, authorized under
such laws to exercise corporate trust powers, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority and (c) with respect to every successor
trustee hereunder either an institution (i) the long-term unsecured debt obligations of which are rated at least
“ ” by and or (ii) whose serving as Trustee hereunder would not result in the lowering of the
ratings originally assigned to any Class of Certificates. The Trustee shall not be an affiliate of the Depositor
or the Servicer. If such corporation or banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes
of this Section 9.05, the combined capital and surplus of such corporation or banking association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of condition so published. In case
at any time the Trustee shall cease to be eligible in accordance with the provision of this Section 9.05, the
Trustee shall resign immediately in the manner and with the effect specified in Section 9.06.
Section 9.06. Resignation and Removal of Trustee. The Trustee may at any time resign and be discharged from
the trust hereby created by giving written notice thereof to the Servicer and mailing a copy of such notice to
all Holders of record. The Trustee shall also mail a copy of such notice of resignation to each Rating Agency.
Upon receiving such notice of resignation, the Servicer shall use their best efforts to promptly appoint a
mutually acceptable successor Trustee by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If no successor Trustee shall have
been so appointed and shall have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with the provisions of
Section 9.05 and shall fail to resign after written request therefor by the Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Servicer
may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the successor.
The Holders of Certificates evidencing not less than 50% of the Voting Rights may at any time
remove the Trustee by written instrument or instruments delivered to the Servicer and the Trustee; the Servicer
shall thereupon use their best efforts to appoint a mutually acceptable successor Trustee in accordance with this
Section 9.06.
Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to
any of the provisions of this Section 9.06 shall become effective upon acceptance of appointment by the successor
Trustee as provided in Section 9.07.
Section 9.07. Successor Trustee. Any successor Trustee appointed as provided in Section 9.06 shall execute,
acknowledge and deliver to the Servicer and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee
herein. The predecessor Trustee shall duly assign, transfer, deliver and pay over to the successor Trustee the
whole of the Mortgage Files and related documents and statements held by it hereunder, together with all
instruments of transfer and assignment or other documents properly executed as may be reasonably required to
effect such transfer and such of the records or copies thereof maintained by the predecessor Trustee in the
administration hereof as may be reasonably requested by the successor Trustee and shall thereupon be discharged
from all duties and responsibilities under this Agreement; provided, however, that if the predecessor Trustee has
been terminated pursuant to the third paragraph of Section 9.06, all reasonable expenses of the predecessor
Trustee incurred in complying with this Section 9.07 shall be reimbursed by the Trust.
No successor Trustee shall accept appointment as provided in this Section 9.07 unless at the
time of such appointment such successor Trustee shall be eligible under the provisions of Section 9.05.
Upon acceptance of appointment by a successor Trustee as provided in this Section 9.07, the
Servicer shall cooperate to 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 Servicer
fail to mail such notice within ten days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
Section 9.08. Merger or Consolidation of Trustee. Any corporation or banking association into which the
Trustee may be merged or converted or with which it may be consolidated, or any corporation or banking
association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any
corporation or banking association succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, if such corporation or banking association is eligible
under the provisions of Section 9.05, 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 9.09. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any of the provisions hereof,
at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any Mortgaged
Property may at the time be located or for any other reason, the Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the
Trustee as co-trustee or separate trustee of all or any part of the Trust Estate, and to vest in such Person or
Persons, in such capacity, such title to the Trust Estate, or any part thereof, and, subject to the other
provision of this Section 9.09, such powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer shall not have joined in such appointment within
ten days after the receipt by it of a request to do so, 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 9.05 and no notice to Holders of Certificates of the appointment of co-trustee(s)
or separate trustee(s) shall be required under Section 9.07.
In the case of any appointment of a co-trustee or separate trustee pursuant to this Section
9.09, 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, 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 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 Estate or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the Trustee. No trustee hereunder shall be
held personally liable by reason of any act or omission of any other trustee hereunder; provided, however, that
no appointment of a co-trustee or separate trustee hereunder shall relieve the Trustee of its obligations
hereunder.
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.
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
become incapable of acting, resign or be removed, or shall be adjudged a bankrupt or insolvent, or a receiver of
its property shall be appointed, or any public officer shall take charge or control of such trustee or co-trustee
or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, 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 9.10. Authenticating Agents. The Trustee may appoint one or more authenticating agents
(“Authenticating Agents”) which shall be authorized to act on behalf of the Trustee in authenticating or
countersigning Certificates. Initially, the Authenticating Agent shall be . Wherever reference is made in
this Agreement to the authentication or countersigning of Certificates by the Trustee or the Trustee’s
certificate of authentication or countersigning, such reference shall be deemed to include authentication or
countersigning on behalf of the Trustee by an Authenticating Agent and a certificate of authentication or
countersignature executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent must be
acceptable to the Servicer and must be a corporation or banking association organized and doing business under
the laws of the United States of America or of any State, having a principal office and place of business in New
York, New York, having a combined capital and surplus of at least $15,000,000, authorized under such laws to do a
trust business and subject to supervision or examination by Federal or State authorities.
Any corporation or banking association into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any corporation or
banking association succeeding to the corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent without the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Trustee and to the Servicer. The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and to the Servicer. Upon receiving a notice
of resignation or upon such a termination, or in case, at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 9.10, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the Servicer and shall mail notice of such
appointment to all Certificateholders. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent.
Section 9.11. Trustee’s Fees and Expenses. The Trustee, as compensation for its activities hereunder, shall
be entitled to receive on each Distribution Date an amount equal to the Trustee Fee for such Distribution Date
pursuant to Section 5.02(a). The Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Trust and held harmless against any loss, liability or expense (including reasonable
attorney’s fees) (a) incurred in connection with any claim or legal action relating to (i) this Agreement, (ii)
the Certificates, or (iii) the performance of any of the Trustee’s duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance
of any of the Trustee’s duties hereunder, (b) resulting from any tax or information return which was prepared by,
or should have been prepared by, the Servicer and (c) arising out of the transfer of any Private Certificate not
in compliance with ERISA. Such indemnity shall survive the termination of this Agreement or the resignation or
removal of the Trustee hereunder. Without limiting the foregoing, except as otherwise agreed upon in writing by
the Depositor and the Trustee, and except for any such expense, disbursement or advance as may arise from the
Trustee’s gross negligence, bad faith, willful misconduct or breach of this Agreement, the Trust shall reimburse
the Trustee for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance
with any of the provisions of this Agreement to the extent permitted by Treasury Regulations Section
1.860G-1(b)(3)(ii) and (iii); provided, however, that the Depositor and the Trustee intend to enter into a
separate agreement for custody-related services. Except as otherwise provided herein, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred by the Trustee in the ordinary
course of its duties as Trustee, Certificate Registrar or Paying Agent hereunder or for any other expenses.
Section 9.12. Appointment of Custodian. The Trustee may at any time on or after the Closing Date, with the
consent of the Depositor and the Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a custodial agreement in a form acceptable to the
Depositor and the Servicer. Subject to this Article IX, the Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian shall be a depository institution subject to supervision by federal or state
authority, shall have a combined capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File.
Section 9.13. Paying Agents. The Trustee may appoint one or more Paying Agents (each, a “Paying Agent”)
which shall be authorized to act on behalf of the Trustee in making withdrawals from the Certificate Account and
distributions to Certificateholders as provided in Section 3.08 and Section 5.02. Wherever reference is made in
this Agreement to the withdrawal from the Certificate Account by the Trustee, such reference shall be deemed to
include such a withdrawal on behalf of the Trustee by a Paying Agent. Initially, the Paying Agent shall be
. Whenever reference is made in this Agreement to a distribution by the Trustee or the furnishing of a
statement to Certificateholders by the Trustee, such reference shall be deemed to include such a distribution or
furnishing on behalf of the Trustee by a Paying Agent. Each Paying Agent shall provide to the Trustee such
information concerning the Certificate Account as the Trustee shall request from time to time. Each Paying Agent
must be reasonably acceptable to the Servicer and must be a corporation or banking association organized and
doing business under the laws of the United States of America or of any state, having (except in the case of the
Trustee) a principal office and place of business in New York, New York, having a combined capital and surplus of
at least $15,000,000, authorized under such laws to do a trust business and subject to supervision or examination
by federal or state authorities.
Any corporation into which any Paying Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which any Paying Agent
shall be a party, or any corporation succeeding to the corporate agency business of any Paying Agent, shall
continue to be the Paying Agent provided that such corporation after the consummation of such merger, conversion,
consolidation or succession meets the eligibility requirements of this Section 9.13.
Any Paying Agent may at any time resign by giving written notice of resignation to the Trustee
and to the Servicer; provided that the Paying Agent has returned to the Certificate Account or otherwise
accounted, to the reasonable satisfaction of the Trustee, for all amounts it has withdrawn from the Certificate
Account. The Trustee may, upon prior written approval of the Servicer, at any time terminate the agency of any
Paying Agent by giving written notice of termination to such Paying Agent and to the Servicer. Upon receiving a
notice of resignation or upon such a termination, or in case at any time any Paying Agent shall cease to be
eligible in accordance with the provisions of the first paragraph of this Section 9.13, the Trustee may appoint,
upon prior written approval of the Servicer, a successor Paying Agent, shall give written notice of such
appointment to the Servicer and shall mail notice of such appointment to all Certificateholders. Any successor
Paying Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if originally named as Paying Agent. The
Trustee shall remain liable for any duties and obligations assumed by its appointed Paying Agent.
Section 9.14. 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 9.15. 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 preceding
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 of the Certificateholders in respect
of which such judgment has been recovered.
Section 9.16. Suits for Enforcement. In case an Event of Default or other default by the Servicer or the
Depositor hereunder shall occur and be continuing, the Trustee, in its discretion, may proceed to protect and
enforce its rights and the rights of the Holders of Certificates 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.
Section 9.17. Waiver of Bond Requirement. The Trustee shall be relieved of, and each Certificateholder
hereby waives, any requirement of any jurisdiction in which the Trust, or any part thereof, may be located that
the Trustee post a bond or other surety with any court, agency or body whatsoever.
Section 9.18. Waiver of Inventory, Accounting and Appraisal Requirement. The Trustee shall be relieved of,
and each Certificateholder hereby waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or appraisal of the Trust with any court,
agency or body at any time or in any manner whatsoever.
ARTICLE X
TERMINATION
Section 10.01. Termination upon Purchase by the Depositor or Liquidation of All Mortgage Loans. Subject to
Section 10.02, the respective obligations and responsibilities of the Depositor, the Servicer and the Trustee
created hereby (other than the obligation of Trustee to make certain payments to Certificateholders after the
Final Distribution Date and to send certain notices as hereinafter set forth and the obligations of the Trustee
pursuant to Sections 5.04(b) and 5.05(b)) 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 earlier of (a) the purchase by
the Depositor of all Mortgage Loans and all REO Property remaining in the Trust Estate at a price equal to the
sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan (other than any Mortgage Loan as to which
REO Property has been acquired and whose fair market value is included pursuant to clause (ii) below) and (ii)
the fair market value of such REO Property (as determined by the Depositor as of the close of business on the
third Business Day next preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the fourth paragraph of this Article X), plus any Class Unpaid Interest Shortfall
for any Class of Certificates as well as one month’s interest at the related Mortgage Rate on the Stated
Principal Balance of each Mortgage Loan (including any Mortgage Loan as to which REO Property has been acquired)
or (b) the final payment or other liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Estate or the disposition of all REO Property.
Regardless of the foregoing, in no event shall the Trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date hereof.
The right of the Depositor to repurchase all of the Mortgage Loans is conditioned upon the Pool
Stated Principal Balance as of the Final Distribution Date being less than 1% of the Cut-off Date Pool Principal
Balance. If such right is exercised, the Trustee shall, promptly following payment of the purchase price,
release to the Depositor or its designee the Mortgage Files pertaining to the Mortgage Loans being purchased.
Notice of any termination, specifying the Final Distribution Date (which shall be a date that
would otherwise be a Distribution Date) upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and for cancellation, shall be given promptly by the Depositor (if
exercising its right to purchase the assets of the Trust) or by the Trustee (in any other case) by letter to
Certificateholders mailed not earlier than the 15th day and not later than the 20th day of the month next
preceding the month of such final distribution specifying (1) the Final Distribution Date upon which final
payment of the Certificates will be made upon presentation and surrender of Certificates at the office or agency
of the Trustee therein designated, (2) the amount of any such final payment and (3) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being made only upon presentation and
surrender of the Certificates at the office or agency of the Trustee therein specified. If the Depositor is
obligated to give notice to Certificateholders as aforesaid, it shall give such notice to the Trustee and the
Certificate Registrar at the time such notice is given to Certificateholders. In the event such notice is given
by the Depositor, the Depositor shall deposit in the Certificate Account on or before the Final Distribution Date
in immediately available funds an amount equal to the amount necessary to make the amount, if any, on deposit in
the Certificate Account on the Final Distribution Date equal to the purchase price for the related assets of the
Trust computed as above provided together with a statement as to the amount to be distributed on each Class of
Certificates pursuant to the next succeeding paragraph.
Upon presentation and surrender of the Certificates, the Trustee shall cause to be distributed
to Certificateholders of each Class, in the order set forth in Section 5.02 hereof, on the Final Distribution
Date and in proportion to their respective Percentage Interests, with respect to Certificateholders of the same
Class, an amount equal to (I) as to each Class of Certificates, the Class Certificate Balance thereof plus (a)
accrued interest thereon in the case of an interest bearing Certificate and (b) the Class A-PO Deferred Amount
with respect to the Class A-PO Certificates, and (II) as to the Class A-R and A-LR Certificates, the amounts, if
any, which remain on deposit in the Upper-Tier Certificate Account and the Certificate Account, respectively
(other than the amounts retained to meet claims) after application pursuant to clause (I) above. An amount shall
be distributed in respect of interest and principal to the Uncertificated Lower-Tier Interests in the same
amounts as distributed to their Corresponding Upper-Tier Class or Classes.
If all of the Certificateholders do not surrender their Certificates for final payment and
cancellation on or before the Final Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders to continue to be held by the
Trustee in an Eligible Account for the benefit of such Certificateholders and the Depositor (if it exercised its
right to purchase the assets of the Trust Estate) or the Trustee (in any other case) shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice all the Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds on deposit in such Eligible Account.
Section 10.02. Additional Termination Requirements.
(a) If the Depositor exercises its purchase option as provided in Section 10.01, the Trust
shall be terminated in accordance with the following additional requirements, unless the Trustee has received an
Opinion of Counsel to the effect that the failure of the Trust to comply with the requirements of this Section
10.02 will not (i) result in the imposition of taxes on “prohibited transactions” of the Trust as defined in
Section 860F of the Code, or (ii) cause the Trust Estate to fail to qualify as two separate REMICs at any time
that any Certificates are outstanding:
(i) within 90 days prior to the Final Distribution Date set forth in the notice given by the Depositor under
Section 10.01, the Trustee shall sell all of the assets of the Trust Estate to the Depositor for cash;
and
(ii) the notice given by the Depositor or the Trustee pursuant to Section 10.01 shall provide that such
notice constitutes the adopting of a plan of complete liquidation of the Upper-Tier REMIC and the
Lower-Tier REMIC as of the date of such notice (or, if earlier, the date on which such notice was mailed
to Certificateholders). The Trustee shall also specify such date in the final tax return of the
Upper-Tier REMIC and Lower-Tier REMIC.
(b) By their acceptance of the Residual Certificates, the Holders thereof hereby agree to
take such other action in connection with such plan of complete liquidation as may be reasonably requested by the
Depositor.
ARTICLE XI
COMPLIANCE WITH REGULATION AB
Section 11.01. Intent of the Parties; Reasonableness.
The Depositor, the Trustee and the Servicer acknowledge and agree that the purpose of this
Article XI is to facilitate compliance by the Depositor with the provisions of Regulation AB and related rules
and regulations of the Commission. The Depositor shall not exercise its right to request delivery of information
or other performance under these provisions other than in good faith, or for purposes other than compliance with
the 1933 Act, the 1934 Act and the rules and regulations of the Commission under the 1933 Act and the 1934 Act.
Each of the Servicer and the Trustee acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among
participants in the mortgage-backed securities markets, advice of counsel, or otherwise, and agrees to comply
with requests made by the Depositor in good faith for delivery of information under these provisions on the basis
of evolving interpretations of Regulation AB. Each of the Servicer and the Trustee shall cooperate fully with
the Depositor to deliver to the Depositor (including any of its assignees or designees), any and all disclosure,
statements, reports, certifications, records and any other information necessary in the reasonable, good faith
determination of the Depositor to permit the Depositor to comply with the provisions of Regulation AB.
Section 11.02. Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent and warrant to the Depositor as of the date
hereof and on each date on which information is provided to the Depositor under Article XI that, except as
disclosed in writing to the Depositor prior to such date: (i) it is not aware and has not received notice that
any default, early amortization or other performance triggering event has occurred as to any other Securitization
Transaction due to any act or failure to act of the Trustee; (ii) there are no aspects of its financial condition
that could have a material adverse effect on the performance by it of its trustee obligations under this
Agreement or any other Securitization Transaction as to which it is the trustee; (iii) there are no material
legal or governmental proceedings pending (or known to be contemplated) against it that would be material to
Certificateholders; (iv) there are no relationships or transactions (as described in Item 1119(b) of Regulation
AB) relating to the Trustee with respect to the Depositor or any sponsor, issuing entity, servicer, trustee,
originator, significant obligor, enhancement or support provider or other material transaction party (as each of
such terms are used in Regulation AB) relating to the Securitization Transaction contemplated by this Agreement
(each, a “Transaction Party”) that are outside the ordinary course of business or on terms other than would be
obtained in an arm’s length transaction with an unrelated third party, apart from the Securitization Transaction,
and that are material to the investors’ understanding of the Certificates; and (v) the Trustee is not an
affiliate (as contemplated by Item 1119(a) of Regulation AB) of any Transaction Party. The Depositor shall
notify the Trustee of any change in the identity of a Transaction Party after the Closing Date.
(b) If so requested by the Depositor on any date following the Closing Date, the Trustee
shall, within five Business Days following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such representation and warranty is not
accurate as of the date of such confirmation, provide the pertinent facts, in writing, to the Depositor.
Section 11.03. Information to Be Provided by the Trustee.
For so long as the Certificates are outstanding, the Trustee shall provide to the Depositor a
written description of (a) any litigation or governmental proceedings pending against the Trustee that would be
material to Certificateholders, and (b) any affiliations or relationships (as described in Item 1119 of
Regulation AB) that develop following the Closing Date between the Trustee and any Transaction Party. Any
descriptions required with respect to legal proceedings, as well as updates to previously provided descriptions,
under this Section 11.03 shall be given no later than five Business Days prior to the Determination Date
following the month in which the relevant event occurs, and any notices and descriptions required with respect to
affiliations, as well as updates to previously provided descriptions, under this Section 11.03 shall be given no
later than January 31 of the calendar year following the year in which the relevant event occurs. As of the date
that any Form 10-D or Form 10-K relating to the Certificates is filed with the Commission, the Trustee shall be
deemed to represent and warrant that any information previously provided by the Trustee under this Article XI is
materially correct and does not have any material omissions unless the Trustee has provided an update to such
information.
Section 11.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably satisfactory to
the Depositor) regarding the Trustee’s assessment of compliance with the applicable Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the 1934 Act and Item 1122 of
Regulation AB. Such report shall be signed by an authorized officer of the Trustee, and shall address each of
the Servicing Criteria specified on Exhibit O hereto; and
(b) deliver to the Depositor a report of a registered public accounting firm satisfying
the requirements of Rule 2-01 of Regulation S-X under the 1933 Act and the 1934 Act that attests to, and reports
on, the assessment of compliance made by the Trustee and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the 1933 Act and the
1934 Act.
Section 11.05. Indemnification Remedies.
(a) The Trustee shall indemnify the Depositor, each affiliate of the Depositor, the
Servicer and each affiliate of the Servicer, and the respective present and former directors, officers, employees
and agents of each of the foregoing, and shall hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to be contained
in any information, report, certification, accountants’ attestation or other material provided under this Article
XI by or on behalf of the Trustee (collectively, the “Trustee Information”), or (B) the omission or alleged
omission to state in the Trustee Information a material fact required to be stated in the Trustee Information or
necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; or
(ii) any failure by the Trustee to deliver any information, report, certification,
accountant's attestation or other material when and as required under this Article XI.
(b) In the case of any failure of performance described in clause (ii) of
Section 11.05(a), the Trustee shall promptly reimburse the Depositor for all costs reasonably incurred by the
Depositor in order to obtain the information, report, certification, accountants’ attestation or other material
not delivered as required by the Trustee.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment. This Agreement may be amended from time to time by the Depositor, the Servicer and
the Trustee without the consent of any of the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to
correct or supplement any provisions herein or therein which may be inconsistent with any other provisions of
this Agreement, any amendment to this Agreement or the related Prospectus Supplement, (iii) to modify, eliminate
or add to any of its provisions to such extent as shall be necessary to maintain the qualification of the
Upper-Tier REMIC and the Lower-Tier REMIC as REMICs at all times that any Certificates are outstanding or to
avoid or minimize the risk of the imposition of any tax on the REMIC pursuant to the Code that would be a claim
against the Trust Estate, provided that (a) the Trustee has received an Opinion of Counsel to the effect that
such action is necessary or desirable to maintain such qualification or to avoid or minimize the risk of the
imposition of any such tax and (b) such action shall not, as evidenced by such Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder, (iv) to change the timing and/or nature of
deposits into the Certificate Account provided that (a) such change shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any Certificateholder and (b) such change
shall not adversely affect the then-current rating of the Senior Certificates, the Class B-1 Certificates, the
Class B-2 Certificates, the Class B-3 Certificates, the Class B-4 Certificates or the Class B-5 Certificates as
evidenced by a letter from each Rating Agency rating such Certificates to such effect, (v) to reduce the
percentage of the Pool Principal Balance at which the Depositor will have the option to purchase all the
remaining Mortgage Loans in accordance with Section 10.01, provided that such reduction is considered necessary
by the Depositor, as evidenced by an Officer’s Certificate delivered to the Trustee, to preserve the treatment of
the transfer of the Mortgage Loans to the Depositor by the Seller or to the Trust by the Depositor as sale for
accounting purposes, and (vi) to make any other provisions with respect to matters or questions arising under
this Agreement which shall not be materially inconsistent with the provisions of this Agreement, provided that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder, provided that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Certificateholders and no Opinion of Counsel to that effect shall be
required if the Person requesting the amendment obtains a letter from each Rating Agency stating that the
amendment would not result in the downgrading or withdrawal of the respective ratings then assigned to the
Certificates.
This Agreement may also be amended from time to time by the Depositor, the Servicer and the
Trustee, with the consent of the Holders of Certificates of each Class of Certificates which is affected by such
amendment, evidencing, as to each such Class of Certificates, Percentage Interests aggregating not less than
66-2/3%, for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the Holders of such Certificates;
provided, however, that no such amendment shall (A) reduce in any manner the amount of, or delay the timing of,
collections of payments on Mortgage Loans or distributions which are required to be made on any Certificate
without the consent of the Holder of such Certificate or (B) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of the Holders of all Certificates then Outstanding.
Prior to the solicitation of consent of Certificateholders in connection with any such
amendment, the party seeking such amendment shall furnish the Trustee with an Opinion of Counsel stating whether
such amendment would adversely affect the qualification of the Upper-Tier REMIC or the Lower-Tier REMIC as REMICs
and notice of the conclusion expressed in such Opinion of Counsel shall be included with any such solicitation.
An amendment made with the consent of all Certificateholders and executed in accordance with this Section 12.01
shall be permitted or authorized by this Agreement notwithstanding that such Opinion of Counsel may conclude that
such amendment would adversely affect the qualification of the Upper-Tier REMIC or the Lower-Tier REMIC as REMICs.
Promptly after the execution of any such amendment or consent the Trustee shall furnish written
notification of the substance of or a copy of such amendment to each Certificateholder and to each Rating Agency.
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 requirements as the Trustee may
prescribe.
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 Servicer and at its expense on direction by the Trustee, who
will act at the direction of Holders of Certificates evidencing not less than 50% of all Voting Rights, but only
upon direction of the Trustee accompanied by an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of 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 Certificateholder
shall not operate to terminate this Agreement or the Trust, nor entitle such 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 herein) or in any manner
otherwise control the operation and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association; nor shall any Certificateholder be
under any liability to any third person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
No Certificateholder shall have any right by virtue 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 provided herein, and unless also the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of each Class of Certificates affected thereby 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
Certificateholder and the Trustee, that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing 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 Certificateholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Section 12.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT APPLICATION OF THE CONFLICTS OF LAWS PROVISIONS THEREOF, 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, instructions, directions, requests and communications required
to be delivered 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, (provided, however, that notices to the Trustee may be
delivered by facsimile and shall be deemed effective upon receipt ) to (a) in the case of the Depositor, Wachovia
Asset Funding Trust, LLC, [address], Attention: , (b) in the case of the Servicer, [address], Attention:
, (c) in the case of the Trustee, [address], Attention: , (d) in the case of , [address],
Attn , and (e) in the case of , [address], Attn: , or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party. 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.
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. Certificates Nonassessable and Fully Paid. It is the intention of the Trustee that
Certificateholders shall not be personally liable for obligations of the Trust Estate, that the beneficial
ownership interests represented by the Certificates shall be nonassessable for any losses or expenses of the
Trust Estate or for any reason whatsoever, and that Certificates upon execution, countersignature and delivery
thereof by the Trustee pursuant to Section 6.01 are and shall be deemed fully paid.
Section 12.08. Access to List of Certificateholders. The Certificate Registrar will furnish or cause to be
furnished to the Trustee, within 15 days after the receipt of a request by the Trustee in writing, a list, in
such form as the Trustee may reasonably require, of the names and addresses of the Certificateholders as of the
most recent Record Date for payment of distributions to Certificateholders.
If three or more Certificateholders apply in writing to the Trustee, and such application
states that the applicants desire to communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and is accompanied by a copy of the communication which such applicants
propose to transmit, then the Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the most recent list of Certificateholders held by
the Trustee. If such a list is as of a date more than 90 days prior to the date of receipt of such applicants’
request, the Trustee shall promptly request from the Certificate Registrar a current list as provided above, and
shall afford such applicants access to such list promptly upon receipt.
Every Certificateholder, by receiving and holding such list, agrees with the Certificate
Registrar and the Trustee that neither the Certificate Registrar nor the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 12.09. Recharacterization. The parties to this Agreement intend the conveyance by the Depositor to
the Trustee of all of its right, title and interest in and to the Mortgage Loans pursuant to this Agreement to
constitute a purchase and sale and not a loan. Notwithstanding the foregoing, to the extent that such conveyance
is held not to constitute a sale under applicable law, it is intended that this Agreement shall constitute a
security agreement under applicable law and that the Depositor shall be deemed to have granted to the Trustee a
first priority security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans.
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized to be hereunto affixed, all as of the day
and year first above written.
WACHOVIA ASSET FUNDING TRUST, LLC,
as Depositor
By:______________________________________
Name:
Title:
[ ],
as Servicer
By:______________________________________
Name:
Title:
[ ],
as Trustee
By:______________________________________
Name:
Title:
STATE OF )
) ss:
COUNTY OF )
)
On the th day of , 200 , 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 s/he is a of
, a , one of the parties that executed the foregoing instrument; and that s/he signed his/her name
thereto by order of the Board of Directors of such corporation.
______________________________________________________
Notary Public
[Notarial Seal]
My commission expires ___________.
STATE OF )
) ss:
COUNTY OF )
On the th day of , 200_, 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 s/he is a
________________ of , a , one of the parties that executed the foregoing instrument; and that s/he
signed his/her name thereto by order of the Board of Directors of such corporation.
______________________________________________________
Notary Public
[Notarial Seal]
My commission expires ___________.
STATE OF )
) ss:
COUNTY OF )
On the th day of , 200_, 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 s/he is the of
Wachovia Asset Funding Trust, LLC, a Delaware statutory trust, one of the parties that executed the foregoing
instrument; and that she signed her name thereto by order of the Board of Directors of such limited liability
company.
______________________________________________________
Notary Public
[Notarial Seal]
My commission expires ___________.