EXECUTION
STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
AURORA LOAN SERVICES INC., as Master Servicer,
and
THE CHASE MANHATTAN BANK, as Trustee
---------------------------
TRUST AGREEMENT
Dated as of April 1, 2000
---------------------------
AURORA LOAN SERVICES
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 2000-2
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................6
Section 1.02. Calculations Respecting Mortgage Loans. ...............36
ARTICLE II
DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund;
Conveyance of Mortgage Loans. .........................36
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust Fund. .........................40
Section 2.03. Representations and Warranties of the Depositor. ......41
Section 2.04. Discovery of Breach. ..................................43
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.43
Section 2.06. Grant Clause. .........................................44
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. .....................................45
Section 3.02. Registration. .........................................45
Section 3.03. Transfer and Exchange of Certificates. ................46
Section 3.04. Cancellation of Certificates. .........................49
Section 3.05. Replacement of Certificates. ..........................49
Section 3.06. Persons Deemed Owners. ................................49
Section 3.07. Temporary Certificates. ...............................49
Section 3.08. Appointment of Paying Agent. ..........................50
Section 3.09. Book-Entry Certificates. ..............................50
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account. ...................................51
Section 4.02. Application of Funds in the Collection Account. .......53
Section 4.03. Reports to Certificateholders. ........................55
Section 4.04. Certificate Account. ..................................58
Section 4.05. Determination of LIBOR. ...............................59
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally. ..............................60
Section 5.02. Distributions from the Certificate Account. ...........60
Section 5.03. Allocation of Realized Losses. ........................66
Section 5.04. Advances by Master Servicer and Trustee. ..............67
Section 5.05. Compensating Interest Payments. .......................68
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. ....................................68
Section 6.02. Certain Matters Affecting the Trustee. ................70
Section 6.03. Trustee Not Liable for Certificates. ..................72
Section 6.04. Trustee May Own Certificates. .........................72
Section 6.05. Eligibility Requirements for Trustee...................72
Section 6.06. Resignation and Removal of Trustee.....................72
Section 6.07. Successor Trustee......................................73
Section 6.08. Merger or Consolidation of Trustee.....................74
Section 6.09. Appointment of Co-Trustee, Separate Trustee
or Custodian...........................................74
Section 6.10. Authenticating Agents..................................75
Section 6.11. Indemnification of Trustee.............................76
Section 6.12. Fees and Expenses of Trustee...........................77
Section 6.13. Collection of Monies...................................77
Section 6.14. Events of Default; Trustee To Act; Appointment
of Successor...........................................77
Section 6.15. Additional Remedies of Trustee Upon Event of Default...81
Section 6.16. Waiver of Defaults.....................................81
Section 6.17. Notification to Holders................................81
Section 6.18. Directions by Certificateholders and Duties of
Trustee During Event of Default........................81
Section 6.19. Action Upon Certain Failures of the Master Servicer
and Upon Event of Default..............................82
Section 6.20. Preparation of Tax Returns and Other Reports...........82
ARTICLE VII
PURCHASE AND TERMINATION OF THE TRUST FUND
Section 7.01. Termination of Trust Fund Upon Repurchase or
Liquidation of All Mortgage Loans.....................83
Section 7.02. Procedure Upon Termination of Trust Fund..............84
Section 7.03. Procedure Upon Exercise of the Pool 1 Call Option
or Pool 2 Call Option.................................85
Section 7.04. Additional Requirements under the REMIC Provisions....85
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders.......................86
Section 8.02. Access to List of Holders.............................86
Section 8.03. Acts of Holders of Certificates.......................87
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer.........................88
Section 9.02. Master Servicer Fidelity Bond and Master Servicer
Errors and Omissions Insurance Policy.................88
Section 9.03. Master Servicer's Financial Statements and
Related Information...................................89
Section 9.04. Power to Act; Procedures..............................89
Section 9.05. Servicing Agreement Between the Master Servicer and
the Servicer; Enforcement of Servicer's Obligations...90
Section 9.06. Collection of Taxes, Assessments and Similar Items....91
Section 9.07. Termination of Servicing Agreements; Successor
Servicers.............................................92
Section 9.08. Master Servicer Liable for Enforcement................92
Section 9.09. No Contractual Relationship Between Servicers and
Trustee or Depositor..................................92
Section 9.10. Assumption of Servicing Agreement by Trustee..........92
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements..........93
Section 9.12. Release of Mortgage Files.............................93
Section 9.13. Documents, Records and Funds in Possession of
Master Servicer To Be Held for Trustee................94
Section 9.14. Representations and Warranties of the Master Servicer.95
Section 9.15. Closing Certificate and Opinion.......................97
Section 9.16. Standard Hazard and Flood Insurance Policies..........97
Section 9.17. Presentment of Claims and Collection of Proceeds......98
Section 9.18. Maintenance of the Primary Mortgage
Insurance Policies....................................98
Section 9.19. Trustee To Retain Possession of Certain Insurance
Policies and Documents................................99
Section 9.20. Realization Upon Defaulted Mortgage Loans.............99
Section 9.21. Compensation to the Master Servicer...................99
Section 9.22. REO Property.........................................100
Section 9.23. [Omitted]............................................100
Section 9.24. Reports to the Trustee...............................100
Section 9.25. Annual Officer's Certificate as to Compliance........101
Section 9.26. Annual Independent Accountants' Servicing Report.....101
Section 9.27. Merger or Consolidation..............................102
Section 9.28. Resignation of Master Servicer.......................102
Section 9.29. Assignment or Delegation of Duties by the
Master Servicer......................................102
Section 9.30. Limitation on Liability of the Master Servicer
and Others...........................................103
Section 9.31. Indemnification; Third-Party Claims..................103
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration.................................104
Section 10.02. Prohibited Transactions and Activities...............105
Section 10.03. Indemnification with Respect to Certain Taxes
and Loss of REMIC Status.............................106
Section 10.04. REO Property.........................................106
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment..............107
Section 11.02. Entire Agreement.....................................107
Section 11.03. Amendment............................................107
Section 11.04. Voting Rights........................................108
Section 11.05. Provision of Information.............................109
Section 11.06. Governing Law........................................109
Section 11.07. Notices..............................................109
Section 11.08. Severability of Provisions...........................109
Section 11.09. Indulgences; No Waivers..............................110
Section 11.10. Headings Not To Affect Interpretation................110
Section 11.11. Benefits of Agreement................................110
Section 11.12. Special Notices to the Rating Agencies...............110
Section 11.13. Counterparts.........................................111
Section 11.14. Transfer of Servicing................................111
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 Form of Interim Certification
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Form of Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Form of Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreement
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreement
Schedule A Mortgage Loan Schedule
Schedule B Principal Amount Schedules
This TRUST AGREEMENT, dated as of April 1, 2000 (the "Agreement"), is
by and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation,
as depositor (the "Depositor"), AURORA LOAN SERVICES INC., as master servicer
(the "Master Servicer"), and THE CHASE MANHATTAN BANK, a New York banking
corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from ▇▇▇▇▇▇ Capital, A
Division of ▇▇▇▇▇▇ Brothers Holdings Inc. (the "Seller"), and at the Closing
Date is the owner of the Mortgage Loans and the other property being conveyed
by it to the Trustee for inclusion in the Trust Fund. On the Closing Date, the
Depositor will acquire the Certificates from the Trust Fund, as consideration
for its transfer to the Trust Fund of the Mortgage Loans and the other
property constituting the Trust Fund. The Depositor has duly authorized the
execution and delivery of this Agreement to provide for the conveyance to the
Trustee of the Mortgage Loans and the other property constituting the Trust
Fund. All covenants and agreements made by the Depositor, the Master Servicer
and the Trustee herein with respect to the Mortgage Loans and the other
property constituting the Trust Fund are for the benefit of the Holders from
time to time of the Certificates. The Depositor and the Master Servicer are
entering into this Agreement, and the Trustee is accepting the Trust Fund
created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as comprising three real estate
mortgage investment conduits (each a "REMIC" or, in the alternative, the Pool
1 Lower Tier REMIC, the Pool 2 Lower Tier REMIC, and the Upper Tier REMIC,
respectively). Each Certificate, other than the Class R Certificate,
represents ownership of a regular interest in the Upper Tier REMIC for
purposes of the REMIC Provisions. The Class R Certificate represents ownership
of the sole class of residual interest in each of the two Lower Tier REMICs
and the Upper Tier REMIC for purposes of the REMIC Provisions. The Upper Tier
REMIC shall hold as assets the several classes of uncertificated Lower Tier
Interests, other than the Class LTR1 and Class LTR2 Interests, set out below.
Each such Lower Tier Interest, other than the Class LTR1 and Class LTR2
Interests, is hereby designated as a regular interest in a Lower Tier REMIC.
Pool 1 Pool 1 Corresponding
Lower Tier Class Lower Tier Initial Class Class of
Designation Interest Rate Principal Amount Certificate(s)
----------- ------------- ---------------- --------------
Class LT1-A1 (1) $ 48,844,000.00 Class 1-A1
Class LT1-A2 (1) 1,000,000.00 Class 1-A2
(2) Class 1-AX
Class LT1-AP 0.00% 721,738.00 Class 1-AP
Class LT1-B1 (1) 1,800,770.85 Class B1
Class LT1-B2 (1) 1,385,191.86 Class B2
Class LT1-B3 (1) 664,626.33 Class B3
Class LT1-B4 (1) 443,227.10 Class B4
Class LT1-B5 (1) 221,399.22 Class B5
Class LT1-B6 (1) 333,906.06 Class B6
Class LT1-R (3) (3) Class R
Class LT1-Q (1) 100 Class R
---------------------
(1) The interest rate with respect to any Distribution Date (and the related
Accrual Period) for the Class LT1-A1, Class LT1-A2, Class LT1-B1, Class
LT1-B2, Class LT1-B3, Class LT1-B4, Class LT1-B5, Class LT1-B6, and Class
LT1-Q Interests is a per annum rate equal to the Adjusted Net WAC for
Pool 1.
(2) The Class 1-AX Certificates are entitled to receive on each Distribution
Date a specified portion of the interest payable on the Class LT1-A1 and
Class LT1-A2 Interests.
(3) The Class LT1-R Interest is the sole class of residual interest in the
Pool 1 Lower Tier REMIC. It does not have an interest rate or a principal
balance.
The Pool 1 Lower Tier REMIC shall hold as assets the Pool 1 Mortgage
Loans and an interest in each account maintained as part of the Trust Fund
(e.g., the Collection Account and the Certificate Account) attributable to
amounts received with respect to the Pool 1 Mortgage Loans.
On each Distribution Date, interest is payable on each Pool 1 Lower Tier
Regular Interest at the rate shown above. On each Distribution Date principal
is payable on each Class of Pool 1 Lower Tier Interests in the same manner and
in the same amount as the Group 1 Senior Principal Distribution Amount and the
Group 1 Subordinate Principal Distribution Amount are payable on the
Corresponding Class of Certificates. Realized Losses and Net Prepayment
Interest Shortfalls for any Distribution Date attributable to the Pool 1
Mortgage Loans shall be allocated among the classes of Pool 1 Lower Tier
Interests in the same manner that such items are allocated among the
Corresponding Classes of Certificates.
Pool 2 Pool 2 Corresponding
Lower Tier Class Lower Tier Initial Class Class of
Designation Interest Rate Principal Amount Certificate(s)
----------- ------------- ---------------- --------------
Class LT2-A1 (1) $165,599,000.00 Class 2-A1
Class LT2-A2 (1) 1,000,000.00 Class 2-A2
(2) Class 2-AX1
(2) Class 2-AX2
Class LT2-AP 0.00% 18,766,848.00 Class 2-AP
Class LT2-B1 (1) 6,601,229.15 Class B1
Class LT2-B2 (1) 5,077,808.14 Class B2
Class LT2-B3 (1) 2,436,373.67 Class B3
Class LT2-B4 (1) 1,624,772.90 Class B4
Class LT2-B5 (1) 811,600.78 Class B5
Class LT2-B6 (1) 1,224,026.04 Class B6
Class LT2-R (3) (3) Class R
(1) The interest rate with respect to any Distribution Date (and the
related Accrual Period) for the Class LT2-A1, Class LT2-A2, Class
LT2-B1, Class LT2-B2, Class LT2-B3, Class LT2-B4, Class LT2-B5, and
Class LT2-B6 Interests is a per annum rate equal to the Adjusted Net
WAC for Pool 2.
(2) The Class 2-AX1 and Class 2-AX2 Certificates are entitled to receive
on each Distribution Date a specified portion of the interest payable
on the Class LT2-A1 and Class LT2-A2 Interests.
(3) The Class LT1-R Interest is the sole class of residual interest in the
Pool 2 Lower Tier REMIC. It does not have an interest rate or a
principal balance.
The Pool 2 Lower Tier REMIC shall hold as assets the Pool 2 Mortgage
Loans and an interest in each account maintained as part of the Trust Fund
(e.g., the Collection Account and the Certificate Account) attributable to
amounts received with respect to the Pool 2 Mortgage Loans.
On each Distribution Date, interest is payable on each Pool 2 Lower Tier
Regular Interest at the rate shown above. On each Distribution Date principal
is payable on each Class of Pool 2 Lower Tier Interests in the same manner and
in the same amount as the Group 2 Senior Principal Distribution Amount and the
Group 2 Subordinate Principal Distribution Amount are payable on the
Corresponding Class of Certificates. Realized Losses and Net Prepayment
Interest Shortfalls for any Distribution Date attributable to the Pool 2
Mortgage Loans shall be allocated among the classes of Pool 2 Lower Tier
Interests in the same manner that such items are allocated among the
Corresponding Classes of Certificates.
The following table sets forth the Class designation, Certificate
Interest Rate, initial Class Principal Amount and minimum denomination for
each Class of Certificates comprising the interests in the Trust Fund created
hereunder.
Certificate Initial Class Minimum
Class Designation Interest Rate Principal Amount Denomination
----------------- ------------- ---------------- ------------
Class 1-A1 7.50%(1) $ 48,844,000.00 $ 25,000
Class 1-A2 7.50%(1) 1,000,000.00 $ 1,000,000
Class 1-AX (2) (3) $ 14,000,000
Class 1-AP 0.00% 721,738.00 $ 25,000
Class 2-A1 (4) 165,599,000.00 $ 25,000
Class 2-A2 (4) 1,000,000.00 $ 1,000,000
Class 2-AX1 (5) (6) $ 3,000,000
Class 2-AX2 (7) (6) $166,599,000
Class 2-AP 0.00% 18,766,848.00 $ 25,000
Class B1 (8) 8,402,000.00 $ 100,000
Class B2 (8) 6,463,000.00 $ 100,000
Class B3 (8) 3,101,000.00 $ 100,000
Class B4 (8) 2,068,000.00 $ 250,000
Class B5 (8) 1,033,000.00 $ 250,000
Class B6 (8) 1,557,932.10 $ 250,000
Class R 7.50%(1) 100.00 $ 100
---------------------------
(1) The Certificate Interest Rate with respect to any Distribution Date on
or prior to the Pool 1 Call Date (and the related Accrual Period) for
the Class 1-A1, Class 1-A2 and Class R Certificates is a per annum rate
equal to the lesser of (i) 7.50% and (ii) the Adjusted Net WAC for Pool
1 for the related Distribution Date. The Certificate Interest Rate with
respect to any Distribution Date following the Pool 1 Call Date (and
the related Accrual Period) for the Class 1-A1, Class 1-A2 and Class R
Certificates shall be equal to the Adjusted Net WAC for Pool 1 for the
related Distribution Date.
(2) The Certificate Interest Rate with respect to any Distribution Date on
or prior to the Pool 1 Call Date (and the related Accrual Period) for
the Class 1-AX Certificates is a per annum rate equal to (i) the
Adjusted Net WAC for Pool 1 for the related Distribution Date minus
(ii) 7.50%, subject to a minimum rate of 0.00%. The Certificate
Interest Rate for the Class 1-AX Certificates with respect to any
Distribution Date following the Pool 1 Call Date (and the related
Accrual Period) shall be zero.
(3) The Class Notional Amount with respect to any Distribution Date (and
the related Accrual Period) of the Class 1-AX Certificates will equal
the sum of the Class Principal Amounts of the Class 1-A1 and Class 1-A2
Certificates immediately preceding such Distribution Date.
(4) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class 2-A1 and Class 2-A2
Certificates is a per annum rate equal to the least of (i) LIBOR plus
0.70%, (ii) 9.00% and (iii) the Adjusted Net WAC for Pool 2 for the
related Distribution Date.
(5) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class 2-AX1 Certificates is a
per annum rate equal to (i) the lesser of (a) 9.00% and (2) the
Adjusted Net WAC for Pool 2 for the related Distribution Date minus
(ii) the Certificate Interest Rate for the Class 2-A1 Certificates for
the related Accrual Period.
(6) The Class Notional Amount with respect to any Distribution Date (and
related Accrual Period) of the Class 2-AX1 and Class 2-AX2 Certificates
will equal the sum of the Class Principal Amounts of the Class 2-A1 and
Class 2-A2 Certificates immediately preceding such Distribution Date.
(7) The Certificate Interest Rate with respect to any Distribution Date
(and the related Accrual Period) for the Class 2-AX2 Certificates is a
per annum rate equal to (i) the Adjusted Net WAC for Pool 2 for the
related Distribution Date minus (ii) 9.00%, subject to a minimum rate
of 0.00%.
(8) The Certificate Interest Rate with respect to any Distribution Date (and
the related Accrual Period) for the Class B1, Class B2, Class B3, Class
B4, Class B5 and Class B6 Certificates will equal the Average Rate for
such Distribution Date; provided, however, that on any Distribution Date
on or after which a portion of the Subordinated Principal Distribution
Amount is distributed pursuant to Section 5.02(e) as principal to the
Non-AP Senior Certificates, the Certificate Interest Rate for the Class
B1, Class B2, Class B3, Class B4, Class B5 and Class B6 Certificates will
equal the lower of the Adjusted Net WAC for Pool 2 and the Adjusted Net
WAC for Pool 1, in each case for the related Distribution Date.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $258,556,619.31.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that service or master service mortgage loans
of the same type and quality as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, to the extent applicable to the
Trustee or the Master Servicer or (y) as provided in the Servicing Agreement,
to the extent applicable to the Servicer.
Accountant: A person engaged in the practice of accounting who
(except when this Agreement provides that an Accountant must be Independent)
may be employed by or affiliated with the Depositor or an Affiliate of the
Depositor.
Accretion Directed Certificate: None.
Accretion Termination Date: None.
Accrual Amount: As to any Class of Accrual Certificates and each
Distribution Date through the Credit Support Depletion Date, the sum of (x)
any amount of Accrued Certificate Interest allocable to such Class pursuant to
Section 5.02(a)(ii) on such Distribution Date and (y) any Interest Shortfall
allocable to such Class pursuant to Section 5.02(a)(iii) on such Distribution
Date. As to any Class of Accrual Certificates and each Distribution Date after
the Credit Support Depletion Date, zero.
Accrual Certificate: None.
Accrual Component: None.
Accrual Period: With respect to any Distribution Date and any Class
of Certificates or any Class of Lower Tier Interests, the one-month period
beginning immediately following the end of the preceding Accrual Period (or
from the Cut-off Date, in the case of the first Accrual Period) and ending on
the last day of the month preceding the month in which such Distribution Date
occurs.
Accrued Certificate Interest: As to any Class of Certificates (other
than any Principal Only Certificates) and any Distribution Date, the product
of the Certificate Interest Rate for such Class of Certificates and the Class
Principal Amount (or Class Notional Amount) of such Class of Certificates
immediately preceding such Distribution Date, as reduced by such Class's share
of the interest portion of (i) any Excess Losses for such Distribution Date
and (ii) any Relief Act Reduction, in each case allocable among the Senior
Certificates of the related Certificate Group pro rata based on the Accrued
Certificate Interest otherwise distributable thereto, and allocable to the
Subordinate Certificates pro rata based on interest accrued on their
respective Apportioned Principal Balances. Interest shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months.
Act: As defined in Section 3.03(c).
Additional Collateral: None.
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the
related Mortgage Note provides for the adjustment of the Mortgage Rate.
Adjusted Net Mortgage Rate: With respect to each Discount Mortgage
Loan for any date, the percentage equivalent of the fraction, the numerator of
which is the product of (i) the applicable Net Mortgage Rate and (ii) the
applicable Scheduled Principal Balance and the denominator of which is the
applicable Adjusted Principal Balance.
Adjusted Net WAC: With respect to each Mortgage Pool for any
Distribution Date, the weighted average of (i) the weighted average of the Net
Mortgage Rates of the Non-Discount Mortgage Loans in the related Mortgage Pool
at the start of the related Due Period, weighted on the basis of the
applicable Scheduled Principal Balances at the start of the related Due
Period, and (ii) the weighted average of the Adjusted Net Mortgage Rates of
the Discount Mortgage Loans in the related Mortgage Pool at the start of the
related Due Period, weighted on the basis of the applicable Adjusted Principal
Balances at the start of the related Due Period.
Adjusted Principal Balance: With respect to each Discount Mortgage
Loan for any date, the product of (i) the Scheduled Principal Balance of the
related Mortgage Loan and (ii) the applicable Non-AP Percentage.
Advance: An advance of the aggregate of payments of principal and
interest (net of the Master Servicing Fee and the Servicing Fee) on one or
more Mortgage Loans that were due on the Due Date in the related Due Period
and not received as of the close of business on the related Determination
Date, required to be made by or on behalf of the Master Servicer and the
Servicer (or by the Trustee) pursuant to Section 5.04.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Master Servicing Compensation: As to any Distribution Date,
the sum of (x) the aggregate of the Master Servicing Fees payable to the
Master Servicer in respect of such Distribution Date and (y) all income and
gain realized from the investment of funds in the Collection Account during
the period from and including the Deposit Date in the calendar month
immediately preceding the month in which such Distribution Date occurs, to but
excluding the Deposit Date relating to such Distribution Date.
Aggregate Principal Balance: The aggregate of the Scheduled Principal
Balances for all Mortgage Loans at any date of determination.
Aggregate Subordinate Percentage: With respect to any Distribution
Date, the sum of the Class Principal Amounts of the Subordinate Certificates
immediately prior to such date divided by the sum of the Non-AP Pool Balances
for all Mortgage Pools for the immediately preceding Distribution Date.
Aggregate Voting Interests: The aggregate of the Voting Interests of
all the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements
hereto.
AP Percentage: As to any Discount Mortgage Loan, the percentage
equivalent of a fraction, the numerator of which is the applicable Designated
Rate minus the Initial Net Mortgage Rate of such Discount Mortgage Loan and
the denominator of which is the applicable Designated Rate. As to any
Non-Discount Mortgage Loan in any Mortgage Pool, 0.00%.
AP Principal Distribution Amount: For any Distribution Date and for
each Certificate Group, the sum of the following amounts:
(i) the applicable AP Percentage of the principal portion
of each Scheduled Payment (without giving effect to any Debt Service
Reduction occurring prior to the Bankruptcy Coverage Termination
Date) on each Mortgage Loan in the related Mortgage Pool due during
the related Due Period;
(ii) the applicable AP Percentage of each of the
following amounts: (1) each Principal Prepayment collected on a
Mortgage Loan in the related Mortgage Pool during the applicable
Prepayment Period, (2) each other unscheduled collection, including
Insurance Proceeds and Net Liquidation Proceeds (other than with
respect to any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the applicable Prepayment Period),
representing or allocable to recoveries of principal of such Mortgage
Loan in the related Mortgage Pool received during the applicable
Prepayment Period and (3) the principal portion of all proceeds of
the purchase of any Mortgage Loan in the related Mortgage Pool (or,
in the case of a permitted substitution, amounts representing a
principal adjustment) actually received by the Trustee with respect
to the applicable Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the
applicable AP Percentage of the related net Liquidation Proceeds
allocable to principal; and
(iv) any amounts described in clauses (i) through (iii)
for any previous Distribution Date that remain unpaid.
Apportioned Principal Balance: As to any Class of Subordinate
Certificates and any Distribution Date, the Class Principal Amount of such
Class immediately prior to such Distribution Date multiplied by a fraction,
the numerator of which is the applicable Group Subordinate Amount for such
date and the denominator of which is the sum of the Group Subordinate Amounts
for all Mortgage Pools for such date.
Appraised Value: With respect to any Mortgage Loan, the amount set
forth in an appraisal made in connection with the origination of such Mortgage
Loan as the value of the related Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument, in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Trustee, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law; provided, however, that
the Trustee shall not be responsible for determining whether any such
assignment is in recordable form.
Aurora: Aurora Loan Services Inc. or its successor in interest, in
its capacity as a Servicer.
Authenticating Agent: Any authenticating agent appointed by the
Trustee pursuant to Section 6.10.
Authorized Officer: Any Person who may execute an Officer's
Certificate on behalf of the Depositor.
Available Distribution Amount: As to each Mortgage Pool and on any
Distribution Date, the sum of the following amounts:
(i) the total amount of all cash received by the Master
Servicer through the Remittance Date and deposited by the Master
Servicer by the Deposit Date for such Distribution Date on the
Mortgage Loans of such Mortgage Pool (including proceeds of any
Insurance Policy and any other credit support relating to such
Mortgage Loans), plus all Advances made by the Master Servicer or the
Servicer (or the Trustee) for such Distribution Date, any
Compensating Interest Payment for such date and Mortgage Pool and any
amounts paid by the Servicer in respect of Prepayment Interest
Shortfalls in respect of the related Mortgage Loans for such date,
but not including:
(A) all amounts distributed pursuant to Section
5.02 on prior Distribution Dates;
(B) all Scheduled Payments of principal and
interest collected but due on a date subsequent to the
related Due Period;
(C) all Principal Prepayments received or
identified by the Servicer after the applicable Prepayment
Period (together with any interest payments received with
such prepayments to the extent that they represent the
payment of interest accrued on the related Mortgage Loans
for the period subsequent to the applicable Prepayment
Period);
(D) any other unscheduled collection, including Net
Liquidation Proceeds and Insurance Proceeds, received by the
Master Servicer after the applicable Prepayment Period;
(E) all fees and amounts due or reimbursable to the
Master Servicer or the Servicer pursuant to the terms of
this Agreement or the Servicing Agreement;
(F) any Prepayment Penalty Amounts;
(G) any Prepayment Interest Excess; and
(H) such portion of each payment in respect of
interest representing Retained Interest.
(ii) any other payment made by the Master Servicer, the
Servicer, the Seller, the Depositor, or any other Person with respect
to such Distribution Date (including the Purchase Price with respect
to any Mortgage Loan repurchased by the Seller, the Depositor or any
other Person).
Average Rate: With respect to any Distribution Date, the weighted
average of the applicable Adjusted Net WAC for each of the Mortgage Pools,
weighted on the basis of the Group Subordinate Amount for each Mortgage Pool.
Balloon Mortgage Loan: Any Mortgage Loan having an original term to
maturity that is shorter than its amortization schedule, and a final Scheduled
Payment that is disproportionately large in comparison to other Scheduled
Payments.
Balloon Payment: The final Scheduled Payment in respect of a Balloon
Mortgage Loan.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief, or seeking, consenting to or acquiescing in the appointment of a
trustee, receiver or liquidator, dissolution, or termination, as the case may
be, of such Person pursuant to the provisions of either the United States
Bankruptcy Code of 1986, as amended, or any other similar state laws.
Bankruptcy Coverage Termination Date: As to each Mortgage Pool, the
Distribution Date on which the related Bankruptcy Loss Limit has been reduced
to zero (or less than zero).
Bankruptcy Loss Limit: As of the Cut-off Date, $257,885, which amount
shall be reduced from time to time by the amount of Bankruptcy Losses
allocated to the Certificates.
Bankruptcy Losses: Any Realized Losses (as reported by the Servicer
to the Master Servicer) arising from a proceeding under the United States
Bankruptcy Code or any other similar state law or other proceeding with
respect to the Mortgagor of or Mortgaged Property under a Mortgage Loan,
including, without limitation, any such loss arising from (a) the difference
between (i) the principal amount that would have been due under the original
scheduled payments of principal and interest due on the related Mortgage Loan
and (ii) the value established in the relevant court with respect to such
Mortgaged Property, including without limitation a Deficient Valuation, or (b)
a Debt Service Reduction.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the
Trustee to the effect that any proposed transfer will not (i) cause the assets
of the Trust Fund to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the
Depositor or the Trustee.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
Property.
Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a
Clearing Agency as described in Section 3.09; provided, that after the
occurrence of a condition whereupon book-entry registration and transfer are
no longer permitted and Definitive Certificates are to be issued to
Certificate Owners, such Book-Entry Certificates shall no longer be
"Book-Entry Certificates." As of the Closing Date, the following Classes of
Certificates constitute Book-Entry Certificates: the Class 1-A1, Class 1-AX,
Class 1-AP, Class 2-A1, Class 2-AX1, Class 2-AX2, Class 2-AP, Class B1, Class
B2 and Class B3.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located,
or the State of Colorado, or (iii) with respect to any Remittance Date or any
Servicer reporting date, the States specified in the definition of "Business
Day" in the Servicing Agreement, are authorized or obligated by law or
executive order to be closed.
Call Certificates: The Class 1-A2 and Class 2-A2 Certificates.
Certificate: Any one of the certificates signed and countersigned by
the Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in
accordance with the provisions of Section 4.04.
Certificate Group: The Group 1 Certificates or Group 2 Certificates,
as applicable.
Certificate Interest Rate: With respect to each Class of
Certificates, the applicable per annum rate specified or determined as
provided in the Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate other
than a Notional Certificate, at the time of determination, the maximum
specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount
set forth on the face of such Certificate (plus, in the case of any Negative
Amortization Certificate, any Deferred Interest allocated thereto on previous
Distribution Dates, and plus, in the case of any Accrual Certificate, its
Percentage Interest of any related Accrual Amount for each previous
Distribution Date), less the amount of all principal distributions previously
made with respect to such Certificate, all Realized Losses allocated to such
Certificate, and, in the case of a Subordinate Certificate, any Subordinate
Certificate Writedown Amount allocated to such Certificate. For purposes of
Article V hereof, unless specifically provided to the contrary, Certificate
Principal Amounts shall be determined as of the close of business of the
immediately preceding Distribution Date, after giving effect to all
distributions made on such date. Notional Certificates are issued without
Certificate Principal Amounts.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed pursuant to Section 3.02.
Certificateholder: The meaning provided in the definition of
"Holder."
Class: All Certificates bearing the same class designation, and, in
the case of each Lower Tier REMIC, all Lower Tier Interests bearing the same
designation.
Class AP Deferred Amount: As to any Distribution Date on or prior to
the Credit Support Depletion Date and each Class of the Class 1-AP and Class
2-AP Certificates, the aggregate of the applicable AP Percentage of the
principal portion of each Realized Loss on a Discount Mortgage Loan in the
related Mortgage Pool, other than, in each case, any Excess Loss, to be
allocated to such Class of Certificates on such Distribution Date or
previously allocated to such Class of Certificates and not yet paid to the
Holders of such Class of Certificates pursuant to Section 5.02(a)(v).
Class AP Certificate: Any Class 1-AP or 2-AP Certificate.
Class B Certificate: Any Class B1, Class B2, Class B3, Class B4,
Class B5 or Class B6 Certificate.
Class LT1-R Interest: The sole residual interest in the Pool 1 Lower
Tier REMIC.
Class LT2-R Interest: The sole residual interest in the Pool 2 Lower
Tier REMIC.
Class Notional Amount: With respect to each Class of Notional
Certificates, the applicable class notional amount calculated as provided in
the Preliminary Statement hereto.
Class Percentage: With respect to each Class of Subordinate
Certificates, for each Distribution Date, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such
Distribution Date by the aggregate Certificate Principal Amount of all
Certificates immediately prior to such date.
Class Principal Amount: With respect to each Class of Certificates
other than any Class of Notional Certificates, the aggregate of the
Certificate Principal Amounts of all Certificates of such Class at the date of
determination. With respect to each Class of Notional Certificates, zero.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust
Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: April 28, 2000.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Account: A separate account established and maintained by
the Master Servicer pursuant to Section 4.01.
Compensating Interest Payment: With respect to each Mortgage Pool and
any Distribution Date, an amount equal to the excess of (x) the aggregate of
any Prepayment Interest Shortfalls with respect to such Mortgage Pool and such
Distribution Date over (y) the aggregate of any amounts required to be paid by
the Servicer in respect of such shortfalls but not paid; provided that such
amount, to the extent payable by the Master Servicer, shall not exceed the
Aggregate Master Servicing Compensation that would be payable to the Master
Servicer in respect of such Mortgage Pool and such Distribution Date without
giving effect to any Compensating Interest Payment.
Component: None.
Component Certificate: None.
Component Interest Rate: None.
Component Notional Amount: Not applicable.
Component Principal Amount: Not applicable.
Conventional Loan: A Mortgage Loan that is not insured by the United
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.
Converted Mortgage Loan: None.
Convertible Mortgage Loan: None.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and
a Proprietary Lease.
Cooperative Loan Documents: As to any Cooperative Loan, (i) the
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon,
which has been filed in all places required to perfect the security interest
in the Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3
financing statements (or copies thereof) 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).
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Corporate Trust Office: The principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Capital Markets
Fiduciary Services/SASCO 2000-ALS2.
Corresponding Class: With respect to any class of Lower Tier
Interests, the Class of Certificates or Component so designated in the
Preliminary Statement hereto. With respect to any Class of Certificates or
Component, the class or classes of Lower Tier Interests so designated in the
Preliminary Statement hereto.
Corresponding Component: None.
Credit Score: With respect to any Mortgage Loan, a numerical
assessment of default risk with respect to the Mortgagor under such Mortgage
Loan, determined on the basis of a methodology developed by Fair, ▇▇▇▇▇ & Co.,
Inc.
Credit Support Depletion Date: The Distribution Date on which, giving
effect to all distributions on such date, the aggregate Certificate Principal
Amount of the Subordinate Certificates is reduced to zero.
Credit Support Percentage: As to any Class of Subordinate
Certificates and any Distribution Date, the sum of the Class Percentages of
all Classes of Certificates that rank lower in priority than such Class.
Custodial Agreement: Each custodial agreement attached as Exhibit K
hereto, and any custodial agreement subsequently executed by the Trustee
substantially in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a
Custodial Agreement, and any successor thereto.
Cut-off Date: April 1, 2000.
Cut-off Date Aggregate Principal Balance: With respect to the
Mortgage Loans in the Trust Fund on the Closing Date, the Aggregate Principal
Balance for all such Mortgage Loans as of the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction of the Scheduled Payment that the related Mortgagor is obligated to
pay on any Due Date as a result of any proceeding under Bankruptcy law or any
similar proceeding.
Deferred Interest: With respect to any Class of Negative Amortization
Certificates and any Distribution Date, the lesser of (x) the applicable
Interest Distribution Amount for such date (without giving effect to any
Deferred Interest) and (y) the aggregate Mortgage Loan Negative Amortization,
if any, for the related Due Period.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount
less than the then outstanding indebtedness under such Mortgage Loan, which
valuation results from a proceeding under Bankruptcy law or any similar
proceeding.
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
Trust Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
Deposit Date: With respect to each Distribution Date, the Business
Day immediately preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware
corporation having its principal place of business in New York, or its
successors in interest.
Designated Rate: With respect to Pool 1, 7.50% per annum and with
respect to Pool 2, 9.00% per annum.
Determination Date: With respect to each Distribution Date, the
Remittance Date immediately preceding such Distribution Date.
Discount Mortgage Loan: With respect to Pool 1, any Mortgage Loan
with an Initial Net Mortgage Rate less than 7.50% per annum and with respect
to Pool 2, any Mortgage Loan with an Initial Net Mortgage Rate less than 9.00%
per annum.
Disqualified Organization: Either (i) the United States, (ii) any
state or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative
described in section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code unless such organization is subject to the tax imposed
by section 511 of the Code, (vii) any organization described in section
1381(a)(2)(C) of the Code, (viii) any "electing large partnership" described
in section 775 of the Code, or (ix) any other entity designated as a
Disqualified Organization by relevant legislation amending the REMIC
Provisions and in effect at or proposed to be effective as of the time of the
determination. In addition, a corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of
directors is not selected by such governmental unit.
Distribution Date: The 25th day of each month, or, if such 25th day
is not a Business Day, the next succeeding Business Day commencing in May
2000.
Due Date: With respect to any Mortgage Loan, the date on which a
Scheduled Payment is due under the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable
to the Rating Agencies or (ii) an account or accounts the deposits in which
are insured by the FDIC to the limits established by such corporation,
provided that any such deposits not so insured shall be maintained in an
account at a depository institution or trust company whose commercial paper or
other short term debt obligations (or, in the case of a depository institution
or trust company which is the principal subsidiary of a holding company, the
commercial paper or other short term debt or deposit obligations of such
holding company or depository institution, as the case may be) have been rated
by each Rating Agency in its highest short-term rating category, or (iii) a
segregated trust account or accounts (which shall be a "special deposit
account") maintained with the Trustee or any other federal or state chartered
depository institution or trust company, acting in its fiduciary capacity, in
a manner acceptable to the Trustee and the Rating Agencies. Eligible Accounts
may bear interest.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed
as to timely payment of principal and interest by, the United States
of America or any agency or instrumentality of the United States of
America the obligations of which are backed by the full faith and
credit of the United States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in,
certificates of deposits of, or bankers' acceptances issued by, any
depository institution or trust company (including U.S. subsidiaries
of foreign depositories and the Trustee or any agent of the Trustee,
acting in its respective commercial capacity) incorporated or
organized under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal or
state banking authorities, so long as at the time of investment or
the contractual commitment providing for such investment the
commercial paper or other short-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or
deposit institution, as the case may be) have been rated by each
Rating Agency in its highest short-term rating category or one of its
two highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct
Obligations or securities guaranteed by GNMA, FNMA or FHLMC with any
registered broker/dealer subject to Securities Investors' Protection
Corporation jurisdiction or any commercial bank insured by the FDIC,
if such broker/dealer or bank has an uninsured, unsecured and
unguaranteed obligation rated by each Rating Agency in its highest
short-term rating category;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any state thereof which have a credit rating
from each Rating Agency, at the time of investment or the contractual
commitment providing for such investment, at least equal to one of
the two highest short-term credit ratings of each Rating Agency;
provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount
of securities issued by such corporation and held as part of the
Trust Fund to exceed 20% of the sum of the Aggregate Principal
Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; provided, further, that such
securities will not be Eligible Investments if they are published as
being under review with negative implications from either Rating
Agency;
(v) commercial paper (including both non interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 180 days after the date
of issuance thereof) rated by each Rating Agency in its highest
short-term ratings;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of
the United States of America or its agencies or instrumentalities
(which obligations are backed by the full faith and credit of the
United States of America) held by a custodian in safekeeping on
behalf of the holders of such receipts; and
(viii) any other demand, money market, common trust fund or
time deposit or obligation, or interest-bearing or other security or
investment, (A) rated in the highest rating category by each Rating
Agency or (B) that would not adversely affect the then current rating
by either Rating Agency of any of the Certificates. Such investments
in this subsection (viii) may include money market mutual funds,
including, without limitation, the VISTA U.S. Government Money Market
Fund or any other fund for which The Chase Manhattan Bank (the
"Bank"), the Trustee or an affiliate thereof serves as an investment
advisor, administrator, shareholder servicing agent, and/or custodian
or subcustodian, notwithstanding that (i) the Bank or an affiliate
thereof charges and collects fees and expenses from such funds for
services rendered, (ii) the Bank or an affiliate thereof charges and
collects fees and expenses for services rendered pursuant to this
Agreement, and (iii) services performed for such funds and pursuant
to this Agreement may converge at any time. The Trustee specifically
authorizes the Bank or an affiliate thereof to charge and collect
from the Trustee such fees as are collected from all investors in
such funds for services rendered to such funds (but not to exceed
investment earnings thereon);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.
ERISA-Restricted Certificate: Any Class 1-A2 or Class 2-A2
Certificate or Subordinate Certificate.
Escrow Account: Any account established and maintained by the
Servicer pursuant to the Servicing Agreement.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 6.14(a).
Excess Loss: Any Bankruptcy Loss, or portion thereof, in excess of
the then-applicable Bankruptcy Loss Limit, any Fraud Loss, or portion thereof,
in excess of the then-applicable Fraud Loss Limit, and any Special Hazard
Loss, or portion thereof, in excess of the then-applicable Special Hazard Loss
Limit.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Scheduled Distribution Date: May 25, 2030.
Financial Intermediary: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
Fitch: Fitch IBCA, Inc., or any successor in interest.
FNMA: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
Fraud Loss: Any Realized Loss on a Mortgage Loan sustained by reason
of a default arising from fraud, dishonesty or misrepresentation in connection
with the related Mortgage Loan, as reported by the Servicer to the Master
Servicer.
Fraud Loss Limit: As of any Distribution Date after the Cut-off Date
(x) prior to the first anniversary of the Cut-off Date, $5,171,132, less the
aggregate of the Fraud Losses since the Cut-off Date, and (y) from the first
to the fourth anniversary of the Cut-off Date, an amount equal to (1) the
lesser of (a) the Fraud Loss Limit as of the most recent anniversary of the
Cut-off Date and (b) 2% (from the first to but excluding the second
anniversary of the Cut-off Date) or 1% (from and including the second, third
and fourth anniversary of the Cut-off Date) of the aggregate principal balance
of all the Mortgage Loans as of the most recent anniversary of the Cut-off
Date less (2) the aggregate of Fraud Losses since the most recent anniversary
of the Cut-off Date. On or after the fifth anniversary of the Cut-off Date,
the Fraud Loss Limit shall be zero.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
Group 1: All of the Group 1 Certificates.
Group 1 Certificate: Any Class 1-A1, Class 1-A2, Class 1-AX, Class
1-AP or Class R Certificate.
Group 2: All of the Group 2 Certificates.
Group 2 Certificate: Any Class 2-A1, Class 2-A2, Class 2-AX1, Class
2-AX2 or Class 2-AP Certificate.
Group Subordinate Amount: As to any Mortgage Pool and any
Distribution Date, the excess of the Non-AP Pool Balance of such Mortgage Pool
for the immediately preceding Distribution Date over the sum of the aggregate
of the Certificate Principal Amounts of the Non-AP Senior Certificates of the
related Certificate Group immediately prior to the related Distribution Date.
Holder or Certificateholder: The registered owner of any Certificate
as recorded on the books of the Certificate Registrar except that, solely for
the purposes of taking any action or giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor, the
Trustee, the Master Servicer, the Servicer or any Affiliate thereof shall be
deemed not to be outstanding in determining whether the requisite percentage
necessary to effect any such consent has been obtained, except that, in
determining whether the Trustee shall be protected in relying upon any such
consent, only Certificates which a Responsible Officer of the Trustee knows to
be so owned shall be disregarded. The Trustee may request and conclusively
rely on certifications by the Depositor, the Master Servicer and the Servicer
in determining whether any Certificates are registered to an Affiliate of the
Depositor, the Master Servicer or the Servicer.
HUD: The United States Department of Housing and Urban Development,
or any successor thereto.
Independent: When used with respect to any Accountants, a Person who
is "independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have any material direct
financial interest in such other Person or any Affiliate of such other Person,
and (c) is not connected with such other Person or any Affiliate of such other
Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
Insurance Policy: Any Primary Mortgage Insurance Policy and any
standard hazard insurance policy, earthquake insurance policy or title
insurance policy relating to the Mortgage Loans or the Mortgaged Properties,
to be in effect as of the Closing Date or thereafter during the term of this
Agreement.
Initial LIBOR Rate: 6.13%.
Initial Net Mortgage Rate: As to any Mortgage Loan, the Net Mortgage
Rate as of the Cut-off Date.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy, other than amounts (i) to cover expenses incurred by or on behalf of
the Servicer in connection with procuring such proceeds, (ii) to be applied to
restoration or repair of the related Mortgaged Property or (iii) required to
be paid over to the Mortgagor pursuant to law or the related Mortgage Note.
Interest Distribution Amount: Not applicable.
Interest Shortfall: With respect to any Class of Certificates (other
than a Principal Only Certificate) and any Distribution Date, any Accrued
Certificate Interest not distributed (or added to principal) with respect to
any previous Distribution Date, other than any Net Prepayment Interest
Shortfalls.
Intervening Assignments: The original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument.
Latest Possible Maturity Date: As defined in Section 10.01(b) hereof.
▇▇▇▇▇▇ Capital: ▇▇▇▇▇▇ Capital, A Division of ▇▇▇▇▇▇ Brothers
Holdings Inc., or any successor in interest.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR
Rate. With respect to each subsequent Accrual Period, the per annum rate
determined pursuant to Section 4.05 on the basis of London interbank offered
rate quotations for one-month Eurodollar deposits, as such quotations may
appear on the display designated as page "LIUS01M" on the Bloomberg Financial
Markets Commodities News (or such other page as may replace such page on that
service for the purpose of displaying London interbank offered quotations of
major banks).
LIBOR Certificate: Any Class 2-A1, Class 2-A2 or Class 2-AX1
Certificate.
LIBOR Component: None.
LIBOR Determination Date: The second London Business Day immediately
preceding the commencement of each Accrual Period with respect to any LIBOR
Certificates other than the first such Accrual Period.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer or the Servicer has determined that all amounts that it
expects to recover on behalf of the Trust Fund from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master
Servicer or the Servicer in connection with the liquidation of any defaulted
Mortgage Loan and are not recoverable under the applicable Primary Mortgage
Insurance Policy, including, without limitation, foreclosure and
rehabilitation expenses, legal expenses and unreimbursed amounts expended
pursuant to Sections 9.06, 9.16 or 9.22.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, including any
amounts remaining in the related Escrow Account.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of
the principal balance of such Mortgage Loan at origination, or such other date
as is specified, to the Original Value thereof.
London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Lower Tier Interest: Any one of the classes of lower tier interests
described in the Preliminary Statement hereto.
Lower Tier Interest Rate: As to each Lower Tier Interest, the
applicable interest rate, if any, as described in the Preliminary Statement
hereto.
Lower Tier REMIC: The Pool 1 Lower Tier REMIC and the Pool 2 Lower
Tier REMIC as described in the Preliminary Statement hereto.
Maintenance: With respect to any Cooperative Unit, the rent or fee
paid by the Mortgagor to the Cooperative Corporation pursuant to the
Proprietary Lease.
Master Servicer: Aurora Loan Services Inc., or any successor in
interest, or if any successor master servicer shall be appointed as herein
provided, then such successor master servicer.
Master Servicing Fee: As to any Distribution Date and each Mortgage
Loan, an amount equal to the product of the Master Servicing Fee Rate and the
Scheduled Principal Balance of such Mortgage Loan as of the first day of the
related Due Period. The Master Servicing Fee for any Mortgage Loan shall be
payable in respect of any Distribution Date solely from the interest portion
of the Scheduled Payment or other payment or recovery with respect to such
Mortgage Loan.
Master Servicing Fee Rate: 0.02% per annum.
Material Defect: As defined in Section 2.02(c) hereof.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
Corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the
name of MERS, as agent for the holder from time to time of the Mortgage Note.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor in
interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage File: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan required to be delivered to the
Trustee or a Custodian pursuant to this Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 or Section
2.05, including without limitation, each Mortgage Loan listed on the Mortgage
Loan Schedule, as amended from time to time.
Mortgage Loan Sale Agreement: The agreement, dated as of April 1,
2000, for the sale of the Mortgage Loans by ▇▇▇▇▇▇ Capital to the Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A,
which shall identify each Mortgage Loan, as such schedule may be amended from
time to time pursuant to Section 2.02.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: Either Pool 1 or Pool 2.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan.
Mortgaged Property: Either of (x) the fee simple interest in real
property, together with improvements thereto including any exterior
improvements to be completed within 120 days of disbursement of the related
Mortgage Loan proceeds, or (y) in the case of a Cooperative Loan, the related
Cooperative Shares and Proprietary Lease, securing the indebtedness of the
Mortgagor under the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization Certificate: None.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage
Loan, the related Liquidation Proceeds net of unreimbursed expenses incurred
in connection with liquidation or foreclosure and unreimbursed Advances,
Servicing Advances and Servicing Fees, received and retained in connection
with the liquidation of such Mortgage Loan.
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage
Rate thereof reduced by the sum of the Servicing Fee Rate, the Master
Servicing Fee Rate and the Trustee Fee Rate.
Net Prepayment Interest Shortfall: With respect to each Mortgage Pool
and any Distribution Date, the excess, if any, of any Prepayment Interest
Shortfalls with respect to the Mortgage Loans in such Mortgage Pool for such
date over the sum of any amounts paid by the Servicer with respect to such
shortfalls and any amount that is required to be paid by the Master Servicer
in respect of such shortfalls pursuant to this Agreement.
Non-AP Percentage: As to any Discount Mortgage Loan in any Mortgage
Pool, the percentage equivalent of the fraction, the numerator of which is the
Initial Net Mortgage Rate of such Discount Mortgage Loan and the denominator
of which is the applicable Designated Rate. As to any Non-Discount Mortgage
Loan in any Mortgage Pool, 100%.
Non-AP Pool Balance: As to each Mortgage Pool and any Distribution
Date, the sum of the applicable Non-AP Percentage of the Scheduled Principal
Balance of each Mortgage Loan included in such Mortgage Pool.
Non-AP Senior Certificate: Any Class 1-A1, Class 1-A2, Class 1-AX,
Class 2-A1, Class 2-A2, Class 2-AX1, Class 2-AX2 or Class R Certificate.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Non-Discount Mortgage Loan: With respect to Pool 1, any Mortgage Loan
with an Initial Net Mortgage Rate equal to or greater than 7.50% per annum and
with respect to Pool 2, any Mortgage Loan with an Initial Net Mortgage Rate
equal to or greater than 9.00% per annum.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Non-permitted Foreign Holder: As defined in Section 3.03(f).
Non-U.S. Person: Any person other than (i) a citizen or resident of
the United States; (ii) a corporation (or entity treated as a corporation for
tax purposes) created or organized in the United States or under the laws of
the United States or of any state thereof, including, for this purpose, the
District of Columbia; (iii) a partnership (or entity treated as a partnership
for tax purposes) organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia (unless provided otherwise by future Treasury
regulations); (iv) an estate whose income is includible in gross income for
United States income tax purposes regardless of its source; or (v) a trust, if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more U.S. Persons have authority to
control all substantial decisions of the trust. Notwithstanding the last
clause of the preceding sentence, to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
U.S. Persons prior to such date, may elect to continue to be U.S. Persons.
Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Class
Notional Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: Any Class 1-AX, Class 2-AX1 or Class 2-AX2
Certificate.
Notional Component: None.
Offering Document: Any of the private placement memorandum dated
April 25, 2000 relating to the Class 1-A2 and Class 2-A2 Certificates, the
private placement memorandum dated April 25, 2000 relating to the Class B4,
Class B5 and Class B6 Certificates, and the Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably
acceptable in form and substance to the Trustee, and who may be in-house or
outside counsel to the Depositor, the Master Servicer or the Servicer but
which must be Independent outside counsel with respect to any such opinion of
counsel concerning the transfer of any Residual Certificate or concerning
certain matters with respect to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the taxation, or the federal income tax status,
of each REMIC.
Original Credit Support Percentage: With respect to each Class of
Subordinate Certificates, the Credit Support Percentage for such Class of
Certificates on the Closing Date.
Original Group Subordinate Amount: As to any Mortgage Pool, the Group
Subordinate Amount for such Mortgage Pool on the Closing Date.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor
at the time the related Mortgage Loan was originated.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
Percentage Interest: With respect to any Certificate and the related
Class, such Certificate's percentage interest in the undivided beneficial
ownership interest in the Trust Fund evidenced by all Certificates of the same
Class as such Certificate. With respect to any Certificate other than a
Notional Certificate, the Percentage Interest evidenced thereby shall equal
the initial Certificate Principal Amount thereof divided by the initial Class
Principal Amount of all Certificates of the same Class. With respect to any
Notional Certificate, the Percentage Interest evidenced thereby shall be as
specified on the face thereof.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Placement Agent: ▇▇▇▇▇▇ Brothers Inc.
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3-101.
Pool 1: The aggregate of the Mortgage Loans identified on the
Mortgage Loan Schedule as being included in Pool 1.
Pool 1 Call Date: As defined in Section 7.01.
Pool 1 Call Option: As defined in Section 7.01.
Pool 1 Mortgage Loan: Any Mortgage Loan in Pool 1.
Pool 1 Purchase Price: As defined in Section 7.01.
Pool 2: Any Mortgage Loan in Pool 2.
Pool 2 Call Date: As defined in Section 7.01.
Pool 2 Call Option: As defined in Section 7.01.
Pool 2 Mortgage Loan: Any Mortgage Loan in Pool 2.
Pool 2 Purchase Price: As defined in Section 7.01.
Prepayment Interest Excess: With respect to any Principal Prepayment
in full received from the first day through the sixteenth day of any month,
all amounts paid in respect of interest at the applicable Net Mortgage Rate on
such Principal Prepayment.
Prepayment Interest Shortfall: With respect to any Distribution Date
and any Principal Prepayment (other than any such prepayment received on the
first of the month) received during the related Prepayment Period, the
difference between (i) one full month's interest at the applicable Mortgage
Rate (giving effect to any applicable Relief Act Reduction), as reduced by the
Master Servicing Fee Rate and the Servicing Fee Rate, on the outstanding
principal balance of such Mortgage Loan immediately prior to such prepayment
and (ii) the amount of interest actually received with respect to such
Mortgage Loan in connection with such Principal Prepayment.
Prepayment Penalty Amounts: With respect to any Distribution Date,
all premiums or charges paid by the obligors under the Mortgage Notes due to
Principal Prepayments collected by the Servicer during the immediately
preceding Prepayment Period.
Prepayment Period: With respect to any Distribution Date and any
Principal Prepayment in part, the period from the second day of the month
immediately preceding the month of such Distribution Date to the first day of
the month of such Distribution Date. With respect to any Distribution Date and
a Principal Prepayment in full (including any liquidation), the period from
the seventeenth day of the month immediately preceding the month of such
Distribution Date (or from the Cut-off Date in the case of the first
Distribution Date) to the sixteenth day of the month of such Distribution
Date.
Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if
any, on an individual Mortgage Loan, as evidenced by a policy or certificate.
Principal Amount Schedules: Not applicable.
Principal Only Certificate: Any Class 1-AP or Class 2-AP Certificate.
Principal Prepayment: Any Mortgagor payment of principal (other than
a Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled
Due Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the Servicing Agreement.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated April 25, 2000, together
with the accompanying prospectus dated April 10, 2000, relating to the Class
1-A1, Class 1-AX, Class 1-AP, Class 2-A1, Class 2-AX1, Class 2-AX2, Class
2-AP, Class B1, Class B2, Class B3 and Class R Certificates.
Purchase Price: With respect to the repurchase of a Mortgage Loan
pursuant to this Agreement, an amount equal to the sum of (a) 100% of the
unpaid principal balance of such Mortgage Loan, (b) accrued interest thereon
at the Mortgage Rate, from the date as to which interest was last paid to (but
not including) the Due Date immediately preceding the related Distribution
Date and (c) any unreimbursed Servicing Advances with respect to such Mortgage
Loan. The Master Servicer or the Servicer (or the Trustee, if applicable)
shall be reimbursed from the Purchase Price for any Mortgage Loan or related
REO Property for any Advances made with respect to such Mortgage Loan that are
reimbursable to the Master Servicer or the Servicer under this Agreement or
the Servicing Agreement, as well as any unreimbursed Servicing Advances and
accrued and unpaid Master Servicing Fees or Servicing Fees, as applicable.
QIB: As defined in Section 3.03(c).
Qualified GIC: A guaranteed investment contract or surety bond
providing for the investment of funds in the Collection Account or the
Certificate Account and insuring a minimum, fixed or floating rate of return
on investments of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two highest
rating categories or, if such insurance company has no long-term debt, whose
claims paying ability is rated by each Rating Agency in one of its two highest
rating categories, and whose short-term debt is rated by each Rating Agency in
its highest rating category;
(b) provide that the Trustee may exercise all of the rights under
such contract or surety bond without the necessity of taking any action by any
other Person;
(c) provide that if at any time the then current credit standing of
the obligor under such guaranteed investment contract is such that continued
investment pursuant to such contract of funds would result in a downgrading of
any rating of the Certificates, the Trustee shall terminate such contract
without penalty and be entitled to the return of all funds previously invested
thereunder, together with accrued interest thereon at the interest rate
provided under such contract to the date of delivery of such funds to the
Trustee;
(d) provide that the Trustee's interest therein shall be transferable
to any successor trustee hereunder; and
(e) provide that the funds reinvested thereunder and accrued interest
thereon be returnable to the Collection Account or the Certificate Account, as
the case may be, not later than the Business Day prior to any Distribution
Date.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the related Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided and whose claims paying
ability is rated by each Rating Agency in its highest rating category or whose
selection as an insurer will not adversely affect the rating of the
Certificates.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess of the
Scheduled Principal Balance of the related Deleted Mortgage Loan, provided,
however, that, to the extent that the Scheduled Principal Balance of such
Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together
with interest thereon at the applicable Mortgage Rate net of the Master
Servicing Fee and the Servicing Fee from the date as to which interest was
last paid through the end of the Due Period in which such substitution occurs,
shall be paid by the party effecting such substitution to the Trustee for
deposit into the Certificate Account, and shall be treated as a Principal
Prepayment hereunder; (ii) has a Net Mortgage Rate not lower than the Net
Mortgage Rate of the related Deleted Mortgage Loan; (iii) has a remaining
stated term to maturity not longer than, and not more than one year shorter
than, the remaining term to stated maturity of the related Deleted Mortgage
Loan; (iv) (A) has a Loan-to-Value Ratio as of the date of such substitution
of not greater than 80%, provided, however, that if the related Deleted
Mortgage Loan has a Loan-to-Value Ratio of greater than 80%, then the
Loan-to-Value Ratio of such substitute Mortgage Loan may be greater than 80%
but shall not be greater than the Loan-to-Value Ratio of the related Deleted
Mortgage Loan and (B) the addition of such substitute Mortgage Loan does not
increase the weighted average Loan-to-Value Ratio of the related Mortgage Pool
by more than 5%; (v) will comply with all of the representations and
warranties relating to Mortgage Loans set forth herein, as of the date as of
which such substitution occurs; (vi) is not a Cooperative Loan unless the
related Deleted Mortgage Loan was a Cooperative Loan; (vii) if applicable, has
the same index as and a margin not less than that of the related Deleted
Mortgage Loan; (viii) has not been delinquent for a period of more than 30
days more than once in the twelve months immediately preceding such date of
substitution; (ix) is covered by a Primary Mortgage Insurance Policy if the
related Deleted Mortgage Loan is so covered, and the Loan-to-Value Ratio of
such Mortgage Loan is greater than 80%; and (x) has a Credit Score not greater
than 20 points lower than the Credit Score of the related Deleted Mortgage
Loan, provided, however, that if the Deleted Mortgage Loan does not have a
Credit Score, then such substitute Mortgage Loan shall have a Credit Score
equal to or greater than 700. In the event that either one mortgage loan is
substituted for more than one Deleted Mortgage Loan or more than one mortgage
loan is substituted for one or more Deleted Mortgage Loans, then (a) the
Scheduled Principal Balance referred to in clause (i) above shall be
determined such that the aggregate Scheduled Principal Balance of all such
substitute Mortgage Loans shall not exceed the aggregate Scheduled Principal
Balance of all Deleted Mortgage Loans and (b) each of (1) the rate referred to
in clause (ii) above, (2) the remaining term to stated maturity referred to in
clause (iii) above, (3) the Loan-to-Value Ratio referred to in clause (iv)
above and (4) the Credit Score referred to in clause (x) above shall be
determined on a weighted average basis, provided that the final scheduled
maturity date of any Qualifying Substitute Mortgage Loan shall not exceed the
Final Scheduled Distribution Date of any Class of Certificates. Whenever a
Qualifying Substitute Mortgage Loan is substituted for a Deleted Mortgage Loan
pursuant to this Agreement, the party effecting such substitution shall
certify such qualification in writing to the Trustee.
Rating Agency: Each of Fitch and S&P.
Realized Loss: (a) with respect to each Liquidated Mortgage Loan, an
amount equal to (i) the unpaid principal balance of such Mortgage Loan as of
the date of liquidation, plus (ii) interest at the applicable Net Mortgage
Rate from the date as to which interest was last paid up to the last day of
the month of such liquidation, minus (iii) Liquidation Proceeds received, net
of amounts that are reimbursable to the Master Servicer or the Servicer with
respect to such Mortgage Loan (other than Advances of principal and interest)
including expenses of liquidation and (b) with respect to each Mortgage Loan
that has become the subject of a Deficient Valuation, the difference between
the unpaid principal balance of such Mortgage Loan immediately prior to such
Deficient Valuation and the unpaid principal balance of such Mortgage Loan as
reduced by the Deficient Valuation. In determining whether a Realized Loss on
a Liquidated Mortgage Loan is a Realized Loss of interest or principal,
Liquidation Proceeds shall be allocated, first, to payment of expenses related
to such Liquidated Mortgage Loan, then to accrued unpaid interest and finally
to reduce the principal balance of the Mortgage Loan.
Recognition Agreement: With respect to any Cooperative Loan, an
agreement between the related Cooperative Corporation and the originator of
such Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
Record Date: With respect to any Distribution Date and each Class of
Certificates, the close of business on the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
Redemption Certificate: None.
Reference Banks: As defined in Section 4.05.
Reimbursement Amount: Not applicable.
Relief Act Reduction: With respect to any Mortgage Loan as to which
there has been a reduction in the amount of interest collectible thereon as a
result of application of the Solders' and Sailors' Civil Relief Act of 1940,
as amended, any amount by which interest collectible on such Mortgage Loan for
the Due Date in the related Due Period is less than interest accrued thereon
for the applicable one-month period at the Mortgage Rate without giving effect
to such reduction.
REMIC: Each of the two Lower Tier REMICs and the Upper Tier REMIC, as
described in the Preliminary Statement hereto.
REMIC Provisions: The provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 86OG of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations, including proposed regulations and rulings, and
administrative pronouncements promulgated thereunder, as the foregoing may be
in effect from time to time.
Remittance Date: The day in each month on which the Servicer is
required to remit payments to the account maintained by the Master Servicer,
as specified in the Servicing Agreement, which is the 18th day of each month
(or if such 18th day is not a Business Day, the next succeeding Business Day).
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the
REMIC Provisions.
Reserve Interest Rate: As defined in Section 4.05.
Residual Certificate: Any Class R Certificate.
Responsible Officer: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary,
the Treasurer, or any assistant treasurer, working in its corporate trust
department and having direct responsibility for the administration of this
Agreement.
Restricted Certificate: Any Class 1-A2, Class 2-A2, Class B4, Class
B5 or Class B6 Certificate.
Retained Interest: None.
Retained Interest Holder: None.
Retained Interest Rate: Not applicable.
Rounding Account: Not applicable.
S&P: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor in interest.
Scheduled Amount: Not applicable.
Scheduled Certificate: None.
Scheduled Component: None.
Scheduled Payment: Each scheduled payment of principal and interest
(or of interest only, if applicable) to be paid by the Mortgagor on a Mortgage
Loan, as reduced (except where otherwise specified herein) by the amount of
any related Debt Service Reduction (excluding all amounts of principal and
interest that were due on or before the Cut-off Date whenever received) and,
in the case of an REO Property, an amount equivalent to the Scheduled Payment
that would have been due on the related Mortgage Loan if such Mortgage Loan
had remained in existence. In the case of any bi-weekly payment Mortgage Loan,
all payments due on such Mortgage Loan during any Due Period shall be deemed
collectively to constitute the Scheduled Payment due on such Mortgage Loan in
such Due Period.
Scheduled Principal Amount: As to any Distribution Date, an amount
equal to the amount described in clause (i)(b) of the definition of Senior
Principal Distribution Amount.
Scheduled Principal Balance: With respect to (i) any Mortgage Loan as
of any Distribution Date, the principal balance of such Mortgage Loan at the
close of business on the Cut-off Date, after giving effect to principal
payments due on or before the Cut-off Date, whether or not received, less an
amount equal to principal payments due after the Cut-off Date and on or before
the Due Date in the related Due Period, whether or not received from the
Mortgagor or advanced by the Servicer or the Master Servicer, and all amounts
allocable to unscheduled principal payments (including Principal Prepayments,
Net Liquidation Proceeds, Insurance Proceeds and condemnation proceeds, in
each case to the extent identified and applied prior to or during the
applicable Prepayment Period) and (ii) any REO Property as of any Distribution
Date, the Scheduled Principal Balance of the related Mortgage Loan on the Due
Date immediately preceding the date of acquisition of such REO Property by or
on behalf of the Trustee (reduced by any amount applied as a reduction of
principal on the Mortgage Loan). With respect to any Mortgage Loan and the
Cut-off Date, as specified in the Mortgage Loan Schedule.
Security Agreement: With respect to any Cooperative Loan, the
agreement between the owner of the related Cooperative Shares and the
originator of the related Mortgage Note that defines the terms of the security
interest in such Cooperative Shares and the related Proprietary Lease.
Seller: ▇▇▇▇▇▇ Capital, A Division of ▇▇▇▇▇▇ Brothers Holdings Inc.,
or any successor in interest.
Senior Certificate: Any Class 1-A1, Class 1-A2, Class 1-AX, Class
1-AP, Class 2-A1, Class 2-A2, Class 2-AX1, Class 2-AX2, Class 2-AP or Class R
Certificate.
Senior Percentage: With respect to each Mortgage Pool and any
Distribution Date, the percentage equivalent of the fraction, the numerator of
which is the aggregate of the Certificate Principal Amounts of the Class 1-A1,
Class 1-A2 and Class R Certificates, in the case of Pool 1 and the Class 2-A1
and Class 2-A2 Certificates, in the case of Pool 2, immediately prior to such
Distribution Date and the denominator of which is the related Non-AP Pool
Balance for the immediately preceding Distribution Date.
Senior Prepayment Percentage: With respect to each Mortgage Pool and
any Distribution Date occurring during the five years beginning on the first
Distribution Date, 100%. With respect to each Mortgage Pool and for any
Distribution Date occurring on or after the fifth anniversary of the first
Distribution Date, the related Senior Percentage plus the following percentage
of the related Subordinate Percentage for such Distribution Date: for any
Distribution Date in the first year thereafter, 70%; for any Distribution Date
in the second year thereafter, 60%; for any Distribution Date in the third
year thereafter, 40%; for any Distribution Date in the fourth year thereafter,
20%; and for any subsequent Distribution Date, 0%; provided, however, that if
on any of the foregoing Distribution Dates the Senior Percentage for any
Mortgage Pool exceeds the initial Senior Percentage for such Mortgage Pool,
the Senior Prepayment Percentage for each Mortgage Pool on such Distribution
Date will once again equal 100% for such Distribution Date.
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage for any Mortgage Pool below the level in effect for the most recent
prior period set forth in the paragraph above shall be effective on any
Distribution Date if, as of the first Distribution Date as to which any such
decrease applies, (i) the average outstanding principal balance on such
Distribution Date and for the preceding five Distribution Dates of all
Mortgage Loans that were delinquent 60 days or more (including for this
purpose any Mortgage Loans in foreclosure and the Scheduled Payments that
would have been due on Mortgage Loans with respect to which the related
Mortgaged Property has been acquired by the Trust Fund if the related Mortgage
Loan had remained in existence) is greater than or equal to 50% of the
applicable Group Subordinate Amount immediately prior to such Distribution
Date or (ii) cumulative Realized Losses with respect to the Mortgage Loans in
any Mortgage Pool exceed (a) with respect to the Distribution Date on the
fifth anniversary of the first Distribution Date, 30% of the related Original
Group Subordinate Amount, (b) with respect to the Distribution Date on the
sixth anniversary of the first Distribution Date, 35% of the related Original
Group Subordinate Amount, (c) with respect to the Distribution Date on the
seventh anniversary of the first Distribution Date, 40% of the related
Original Group Subordinate Amount, (d) with respect to the Distribution Date
on the eighth anniversary of the first Distribution Date, 45% of the related
Original Group Subordinate Amount, and (e) with respect to the Distribution
Date on the ninth anniversary of the first Distribution Date or thereafter,
50% of the related Original Group Subordinate Amount.
Senior Principal Distribution Amount: For each Certificate Group and
any Distribution Date, the sum of the following amounts:
(i) the product of (a) the related Senior Percentage for
such date and (b) the principal portion (multiplied by the applicable
Non-AP Percentage) of each Scheduled Payment (without giving effect
to any Debt Service Reduction occurring prior to the Bankruptcy
Coverage Termination Date), on each Mortgage Loan in the related
Mortgage Pool due during the related Due Period;
(ii) the product of (a) the related Senior Prepayment
Percentage for such date and (b) each of the following amounts
(multiplied by the applicable Non-AP Percentage): (1) each Principal
Prepayment on the Mortgage Loans in the related Mortgage Pool
collected during the related Prepayment Period, (2) each other
unscheduled collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any Mortgage Loan in
the related Mortgage Pool that was finally liquidated during the
related Prepayment Period) representing or allocable to recoveries of
principal received during the related Prepayment Period, and (3) the
principal portion of all proceeds of the purchase of any Mortgage
Loan in the related Mortgage Pool (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Trustee during the related Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the lesser
of (a) the related net Liquidation Proceeds allocable to principal
(multiplied by the applicable Non-AP Percentage) and (b) the product
of the related Senior Prepayment Percentage for such date and the
Scheduled Principal Balance (multiplied by the applicable Non-AP
Percentage) of such related Mortgage Loan at the time of liquidation;
and
(iv) any amounts described in clauses (i) through (iii) for
any previous Distribution Date that remain unpaid.
Servicer: Aurora Loan Services Inc. or any successor in interest.
Servicing Advances: Expenditures incurred by the Servicer in
connection with the liquidation or foreclosure of a Mortgage Loan which are
eligible for reimbursement under the Servicing Agreement.
Servicing Agreement: The Servicing Agreement between Aurora and the
Seller, dated as of April 1, 2000, attached hereto in Exhibit E, and any other
servicing agreement entered into between a successor servicer and the Seller
or the Trustee pursuant to the terms hereof.
Servicing Fee: The Servicing Fee specified in the Servicing Agreement
(which shall include any Prepayment Interest Excess).
Servicing Fee Rate: With respect to the Servicer, as specified in the
Servicing Agreement.
Servicing Officer: Any officer of the Master Servicer involved in or
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished by
the Master Servicer to the Trustee, as such list may from time to time be
amended.
Special Hazard Loss: With respect to the Mortgage Loans, (x) any
Realized Loss arising out of any direct physical loss or damage to a Mortgaged
Property which is caused by or results from any cause, exclusive of any loss
covered by a hazard policy or a flood insurance policy required to be
maintained in respect of such Mortgaged Property and any loss caused by or
resulting from (i) normal wear and tear, (ii) conversion or other dishonest
act on the part of the Trustee, the Master Servicer, the Servicer or any of
their agents or employees, or (iii) errors in design, faulty workmanship or
faulty materials, unless the collapse of the property or a part thereof
ensues, or (y) any Realized Loss arising from or related to the presence or
suspected presence of hazardous wastes, or hazardous substances on a Mortgaged
Property unless such loss is covered by a hazard policy or flood insurance
policy required to be maintained in respect of such Mortgaged Property, in any
case, as reported by the Servicer to the Master Servicer.
Special Hazard Loss Limit: As of the Cut-off Date, $14,092,589, which
amount shall be reduced from time to time to an amount equal on any
Distribution Date to the lesser of (a) the greatest of (i) 1% of the aggregate
of the Scheduled Principal Balances of the Mortgage Loans; (ii) twice the
Scheduled Principal Balance of the Mortgage Loan having the highest Scheduled
Principal Balance, and (iii) the aggregate Scheduled Principal Balances of the
Mortgage Loans secured by Mortgaged Properties located in the single
California postal zip code area having the highest aggregate Scheduled
Principal Balance of Mortgage Loans of any such postal zip code area and (b)
the Special Hazard Loss Limit as of the Closing Date less the amount, if any,
of Special Hazard Losses incurred with respect to Mortgage Loans since the
Closing Date.
Specified Rating: A rating of AAA by Fitch or S&P.
Startup Day: The day designated as such pursuant to Section 10.01(b)
hereof.
Subordinate Certificate: Any Class B Certificate.
Subordinate Certificate Writedown Amount: As to any Distribution
Date, the amount by which (i) the sum of the Class Principal Amounts of all
the Certificates (after giving effect to the distribution of principal and the
application of Realized Losses in reduction of the Certificate Principal
Amounts of the Certificates on such Distribution Date) exceeds (ii) the
aggregate Scheduled Principal Balance of the Mortgage Loans for such
Distribution Date.
Subordinate Class Percentage: With respect to any Distribution Date
and any Class of Subordinate Certificates, the percentage obtained by dividing
the Class Principal Amount of such Class immediately prior to such
Distribution Date by the aggregate Certificate Principal Amount of all
Subordinate Certificates immediately prior to such Distribution Date.
Subordinate Percentage: With respect to each Mortgage Pool and any
Distribution Date, the difference between 100% and the related Senior
Percentage for such Distribution Date.
Subordinate Prepayment Percentage: With respect to each Mortgage Pool
and any Distribution Date, the difference between 100% and the related Senior
Prepayment Percentage for such Distribution Date.
Subordinate Principal Distribution Amount: For each Certificate Group
and any Distribution Date, the sum of the following:
(i) the product of (a) the related Subordinate Percentage
for such date and (2) the principal portion (multiplied by the
applicable Non-AP Percentage) of each Scheduled Payment (without
giving effect to any Debt Service Reduction occurring prior to the
applicable Bankruptcy Coverage Termination Date) on each Mortgage
Loan in the related Mortgage Pool due during the related Due Period;
(ii) the product of (a) the related Subordinate Prepayment
Percentage for such date and (b) each of the following amounts
(multiplied by the applicable Non-AP Percentage): (1) each Principal
Prepayment on the Mortgage Loans in the related Mortgage Pool
collected during the related Prepayment Period, (2) each other
unscheduled collection, including Insurance Proceeds and Net
Liquidation Proceeds (other than with respect to any Mortgage Loan in
the related Mortgage Pool that was finally liquidated during the
related Prepayment Period) representing or allocable to recoveries of
principal received during the related Prepayment Period, and (3) the
principal portion of all proceeds of the purchase of any Mortgage
Loan in the related Mortgage Pool (or, in the case of a permitted
substitution, amounts representing a principal adjustment) actually
received by the Trustee during the related Prepayment Period;
(iii) with respect to unscheduled recoveries allocable to
principal of any Mortgage Loan in the related Mortgage Pool that was
finally liquidated during the related Prepayment Period, the related
net Liquidation Proceeds allocable to principal (multiplied by the
applicable Non-AP Percentage) less any related amount paid pursuant
to subsection (iii) of the definition of Senior Principal
Distribution Amount for the related Certificate Group; and
(iv) any amounts described in clauses (i) through (iii)
for any previous Distribution Date that remain unpaid;
TAC Amount: Not applicable.
TAC Certificate: None.
TAC Component: None.
Tax Matters Person: The "tax matters person" as specified in the
REMIC Provisions.
Termination Price: As defined in Section 7.01 hereof.
Title Insurance Policy: A title insurance policy maintained with
respect to a Mortgage Loan.
Transfer Agreement: As defined in the Mortgage Loan Sale Agreement.
Transferor: Each seller of Mortgage Loans to ▇▇▇▇▇▇ Capital pursuant
to a Transfer Agreement.
Trust Fund: The corpus of the trust created pursuant to this
Agreement, consisting of the Mortgage Loans, the assignment of the Depositor's
rights under the Mortgage Loan Sale Agreement, such amounts as shall from time
to time be held in the Collection Account, the Certificate Account, any Escrow
Account, the Insurance Policies, any REO Property and the other items referred
to in, and conveyed to the Trustee under, Section 2.01(a).
Trust Rate: Not applicable.
Trustee: The Chase Manhattan Bank, not in its individual capacity but
solely as Trustee, or any successor in interest, or if any successor trustee
or any co-trustee shall be appointed as herein provided, then such successor
trustee and such co-trustee, as the case may be.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of the Trustee Fee Rate and the aggregate Scheduled Principal Balance
of the related Mortgage Loans as of the first day of the related Due Period,
subject to a minimum of $5,000 annually, in the aggregate. For purposes of
payment of the Trustee Fee pursuant to Section 5.02(a)(i), the Trustee Fee
shall be calculated separately, by Mortgage Pool. In the event that additional
amounts are required to be paid to the Trustee on any Distribution Date to
meet the $5,000 annual minimum, such amounts will be allocated to each
Mortgage Pool based on the respective outstanding principal balances.
Trustee Fee Rate: 0.0085% per annum.
Undercollateralization Distribution: As defined in Section
5.02(e)(ii).
Undercollateralized Group: With respect to any Distribution Date, the
Non-AP Senior Certificates of any Certificate Group as to which the aggregate
Certificate Principal Amount thereof, after giving effect to distributions
pursuant to Sections 5.02(a) and (b) on such date is greater than the Non-AP
Pool Balance of the related Mortgage Pool for such Distribution Date.
Unscheduled Principal Amount: As to any Distribution Date, the sum of
the amounts described in clauses (ii)(b) and (iii) (without regard to the
reference in clause (iii) to the "Senior Prepayment Percentage") of the
definition of Senior Principal Distribution Amount.
Upper Tier REMIC: One of the three separate REMICs as described in
the Preliminary Statement hereto.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
95% of all Voting Interests shall be allocated to the Certificates other than
the Notional Certificates and 5% of all Voting Interests shall be allocated to
the Notional Certificates. Voting Interests allocated to the Notional
Certificates shall be allocated among the Classes of such Certificates (and
among the Certificates of each such Class) in proportion to their Class
Notional Amounts (or Notional Amounts). Voting Interests shall be allocated
among the other Classes of Certificates (and among the Certificates of each
such Class) in proportion to their Class Principal Amounts (or Certificate
Principal Amounts).
Section 1.02. Calculations Respecting Mortgage Loans. Calculations
required to be made pursuant to this Agreement with respect to any Mortgage
Loan in the Trust Fund shall be made based upon current information as to the
terms of the Mortgage Loans and reports of payments received from the
Mortgagor on such Mortgage Loans and payments to be made to the Trustee as
supplied to the Trustee by the Master Servicer. The Trustee shall not be
required to recompute, verify or recalculate the information supplied to it by
the Master Servicer.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans. (a) Concurrently with the execution and delivery of this
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, subject to Sections
2.02, 2.04, 2.05 and 2.06, in trust, all the right, title and interest of the
Depositor in and to the Mortgage Loans. Such conveyance includes, without
limitation, the right to all distributions of principal and interest received
on or with respect to the Mortgage Loans on and after the Cut-off Date other
than (i) any amounts representing Retained Interest and (ii) payments of
principal and interest due on or before such date, and all such payments due
after such date but received prior to such date and intended by the related
Mortgagors to be applied after such date, together with all of the Depositor's
right, title and interest in and to the Collection Account and all amounts
from time to time credited to and the proceeds of the Collection Account, the
Certificate Account and all amounts from time to time credited to and the
proceeds of the Certificate Account, any Escrow Account established pursuant
to Section 9.06 hereof and all amounts from time to time credited to and the
proceeds of any such Escrow Account, any REO Property and the proceeds
thereof, the Depositor's rights under any Insurance Policies related to the
Mortgage Loans, and the Depositor's security interest in any collateral
pledged to secure the Mortgage Loans, including the Mortgaged Properties and
any Additional Collateral, and any proceeds of the foregoing, to have and to
hold, in trust; and the Trustee declares that, subject to the review provided
for in Section 2.02, it has received and shall hold the Trust Fund, as
trustee, in trust, for the benefit and use of the Holders of the Certificates
and for the purposes and subject to the terms and conditions set forth in this
Agreement, and, concurrently with such receipt, has caused to be executed,
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Trust Fund, Certificates in the authorized denominations evidencing
the entire ownership of the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest
under the Mortgage Loan Sale Agreement (other than any right to receive
Retained Interest), including all rights of the Seller under the Servicing
Agreement to the extent assigned under the Mortgage Loan Sale Agreement, and
delegates its obligations thereunder. The Trustee hereby accepts such
assignment and delegation, and shall be entitled to exercise all rights of the
Depositor under the Mortgage Loan Sale Agreement as if, for such purpose, it
were the Depositor. The foregoing sale, transfer, assignment, set-over,
deposit and conveyance does not and is not intended to result in creation or
assumption by the Trustee of any obligation of the Depositor, the Seller, or
any other Person in connection with the Mortgage Loans or any other agreement
or instrument relating thereto except as specifically set forth herein.
(b) In connection with such transfer and assignment, the Depositor
does hereby deliver to, and deposit with, or cause to be delivered to and
deposited with, the Trustee, and/or any custodian acting on the Trustee's
behalf, if applicable, the following documents or instruments with respect to
each Mortgage Loan (each a "Mortgage File") so transferred and assigned:
(i) with respect to each Mortgage Loan, the original
Mortgage Note endorsed without recourse in proper form to the order
of the Trustee, or in blank (in each case, with all necessary
intervening endorsements as applicable);
(ii) the original of any guarantee executed in connection
with the Mortgage Note, assigned to the Trustee;
(iii) with respect to each Mortgage Loan other than a
Cooperative Loan, the original recorded Mortgage with evidence of
recording indicated thereon. If, in connection with any Mortgage
Loan, the Depositor cannot deliver the Mortgage with evidence of
recording thereon on or prior to the Closing Date because of a delay
caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost, the
Depositor shall deliver or cause to be delivered to the Trustee (or
its custodian), in the case of a delay due to recording, a true copy
of such Mortgage, pending delivery of the original thereof, together
with an Officer's Certificate of the Depositor certifying that the
copy of such Mortgage delivered to the Trustee (or its custodian) is
a true copy and that the original of such Mortgage has been forwarded
to the public recording office, or, in the case of a Mortgage that
has been lost, a copy thereof (certified as provided for under the
laws of the appropriate jurisdiction) and a written Opinion of
Counsel acceptable to the Trustee and the Depositor that an original
recorded Mortgage is not required to enforce the Trustee's interest
in the Mortgage Loan;
(iv) the original of each assumption, modification or
substitution agreement, if any, relating to the Mortgage Loans, or,
as to any assumption, modification or substitution agreement which
cannot be delivered on or prior to the Closing Date because of a
delay caused by the public recording office where such assumption,
modification or substitution agreement has been delivered for
recordation, a photocopy of such assumption, modification or
substitution agreement, pending delivery of the original thereof,
together with an Officer's Certificate of the Depositor certifying
that the copy of such assumption, modification or substitution
agreement delivered to the Trustee (or its custodian) is a true copy
and that the original of such agreement has been forwarded to the
public recording office;
(v) with respect to each Non-MERS Mortgage Loan other
than a Cooperative Loan, the original Assignment of Mortgage for each
Mortgage Loan;
(vi) if applicable, such original intervening assignments
of the Mortgage, notice of transfer or equivalent instrument (each,
an "Intervening Assignment"), as may be necessary to show a complete
chain of assignment from the originator, or, in the case of an
Intervening Assignment that has been lost, a written Opinion of
Counsel acceptable to the Trustee that such original Intervening
Assignment is not required to enforce the Trustee's interest in the
Mortgage Loans;
(vii) the original Primary Mortgage Insurance Policy or
certificate, if private mortgage guaranty insurance is required;
(viii)with respect to each Mortgage Loan other than a
Cooperative Loan, the original mortgagee title insurance policy or
attorney's opinion of title and abstract of title;
(ix) the original of any security agreement, chattel
mortgage or equivalent executed in connection with the Mortgage or as
to any security agreement, chattel mortgage or their equivalent that
cannot be delivered on or prior to the Closing Date because of a
delay caused by the public recording office where such document has
been delivered for recordation, a photocopy of such document, pending
delivery of the original thereof, together with an Officer's
Certificate of the Depositor certifying that the copy of such
security agreement, chattel mortgage or their equivalent delivered to
the Trustee (or its custodian) is a true copy and that the original
of such document has been forwarded to the public recording office;
(x) with respect to any Cooperative Loan, the Cooperative
Loan Documents; and
(xi) in connection with any pledge of Additional
Collateral, the original additional collateral pledge and security
agreement executed in connection therewith, assigned to the Trustee.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
(c) (i) Assignments of Mortgage with respect to each Non-MERS
Mortgage Loan other than a Cooperative Loan shall be recorded; provided,
however, that such Assignments need not be recorded if, in the Opinion of
Counsel (which must be Independent counsel) acceptable to the Trustee and the
Rating Agencies, recording in such states is not required to protect the
Trustee's interest in the related Non-MERS Mortgage Loans. Subject to the
preceding sentence, as soon as practicable after the Closing Date (but in no
event more than 3 months thereafter except to the extent delays are caused by
the applicable recording office), the Trustee, at the expense of the Depositor
and with the cooperation of the Servicer, shall cause to be properly recorded
by the Servicer in each public recording office where the related Mortgages
are recorded each Assignment of Mortgage referred to in subsection (b)(v)
above with respect to a Non-MERS Mortgage Loan. With respect to each
Cooperative Loan, the Trustee, at the expense of the Depositor and with the
cooperation of the Servicer, shall cause the Servicer to take such actions as
are necessary under applicable law in order to perfect the interest of the
Trustee in the related Mortgaged Property.
(ii) With respect to each MERS Mortgage Loan, the
Trustee, at the expense of the Depositor and at the direction and
with the cooperation of the Servicer, shall cause to be taken such
actions as are necessary to cause the Trustee to be clearly
identified as the owner of each such Mortgage Loan on the records of
MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee, or to the applicable Custodian on behalf of the
Trustee, under clause (b)(viii) above and is not so delivered, the Depositor
will provide a copy of such Title Insurance Policy to the Trustee, or to the
applicable Custodian on behalf of the Trustee, as promptly as practicable
after the execution and delivery hereof, but in any case within 180 days of
the Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full after
the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Trustee, or to the
applicable Custodian on behalf of the Trustee, an Officer's Certificate which
shall include a statement to the effect that all amounts received in
connection with such prepayment that are required to be deposited in the
applicable Collection Account pursuant to Section 4.01 have been so deposited.
All original documents that are not delivered to the Trustee or the applicable
Custodian on behalf of the Trustee shall be held by the Master Servicer or the
Servicer in trust for the benefit of the Trustee and the Certificateholders.
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust Fund. (a) The Trustee, by execution and delivery
hereof, acknowledges receipt of the Mortgage Files pertaining to the Mortgage
Loans listed on the Mortgage Loan Schedule, subject to review thereof by the
Trustee, or by the applicable Custodian on behalf of the Trustee, under this
Section 2.02. The Trustee, or the applicable Custodian on behalf of the
Trustee, will execute and deliver to the Trustee, the Depositor and the Master
Servicer on the Closing Date an Initial Certification in the form annexed
hereto as Exhibit B-1 (or in the form annexed to the applicable Custodial
Agreement as Exhibit B-1, as applicable).
(b) Within 45 days after the Closing Date, the applicable Custodian
will, on behalf of the Trustee and for the benefit of Holders of the
Certificates, review each Mortgage File to ascertain that all required
documents set forth in Section 2.01 have been received and appear on their
face to contain the requisite signatures by or on behalf of the respective
parties thereto, and shall deliver to the Trustee, the Depositor and the
Master Servicer an Interim Certification in the form annexed hereto as Exhibit
B-2 (or in the form annexed to the applicable Custodial Agreement as Exhibit
B-2, as applicable) to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan prepaid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), (i) all of the applicable documents specified in Section
2.01(b) are in its possession and (ii) such documents have been reviewed by it
and appear to relate to such Mortgage Loan. The Trustee, or the applicable
Custodian on behalf of the Trustee, shall make sure that the documents are
executed and endorsed, but shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other
papers to determine that the same are valid, binding, legally effective,
properly endorsed, genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded or are in recordable form or
that they are other than what they purport to be on their face. Neither the
Trustee nor any Custodian shall have any responsibility for verifying the
genuineness or the legal effectiveness of or authority for any signatures of
or on behalf of any party or endorser.
(c) If in the course of the review described in paragraph (b) above
the Trustee or the applicable Custodian discovers any document or documents
constituting a part of a Mortgage File that is missing, does not appear
regular on its face (i.e., is mutilated, damaged, defaced, torn or otherwise
physically altered) or appears to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule (each, a "Material Defect"), the
Trustee, or the applicable Custodian on behalf of the Trustee, shall promptly
identify the Mortgage Loan to which such Material Defect relates in the
Interim Certificate delivered to the Depositor or the Master Servicer (and to
the Trustee). Within 90 days of its receipt of such notice, the Depositor
shall be required to cure such Material Defect (and, in such event, the
Depositor shall provide the Trustee with an Officer's Certificate confirming
that such cure has been effected). If the Depositor does not so cure such
Material Defect, it shall, if a loss has been incurred with respect to such
Mortgage Loan that would, if such Mortgage Loan were not purchased from the
Trust Fund, constitute a Realized Loss, and such loss is attributable to the
failure of the Depositor to cure such Material Defect, repurchase the related
Mortgage Loan from the Trust Fund at the Purchase Price. A loss shall be
deemed to be attributable to the failure of the Depositor to cure a Material
Defect if, as determined by the Depositor, upon mutual agreement acting in
good faith, absent such Material Defect, such loss would not have been
incurred. Within the two year period following the Closing Date, the Depositor
may, in lieu of repurchasing a Mortgage Loan pursuant to this Section 2.02,
substitute for such Mortgage Loan a Qualifying Substitute Mortgage Loan
subject to the provisions of Section 2.05. The failure of the Trustee or the
applicable Custodian to give the notice contemplated herein within 45 days
after the Closing Date shall not affect or relieve the Depositor of its
obligation to repurchase any Mortgage Loan pursuant to this Section 2.02 or
any other Section of this Agreement requiring the repurchase of Mortgage Loans
from the Trust Fund.
(d) Within 180 days following the Closing Date, the Trustee, or the
applicable Custodian, shall deliver to the Trustee, the Depositor and the
Master Servicer a Final Certification substantially in the form annexed hereto
as Exhibit B-3 (or in the form annexed to the applicable Custodial Agreement
as Exhibit B-3, as applicable) evidencing the completeness of the Mortgage
Files in its possession or control, with any exceptions noted thereto.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
(f) Each of the parties hereto acknowledges that the Custodian shall
perform the applicable review of the Mortgage Loans and respective
certifications thereof as provided in this Section 2.02.
Section 2.03. Representations and Warranties of the Depositor. (a)
The Depositor hereby represents and warrants to the Trustee, for the benefit
of Certificateholders and to the Master Servicer, as of the Closing Date or
such other date as is specified, that:
(i) the Depositor is a corporation duly organized,
validly existing and in good standing under the laws governing its
creation and existence and has full corporate power and authority to
own its property, to carry on its business as presently conducted, to
enter into and perform its obligations under this Agreement, and to
create the trust pursuant hereto;
(ii) the execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Depositor; neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will
conflict with or result in a breach of, or constitute a default
under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Depositor or its
properties or the certificate of incorporation or bylaws of the
Depositor;
(iii) the execution, delivery and performance by the
Depositor of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any
other action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given,
effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered
by the Depositor and, assuming due authorization, execution and
delivery by the Trustee and the Master Servicer, constitutes a valid
and binding obligation of the Depositor enforceable against it in
accordance with its terms except as such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and other
similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether
such enforcement is considered in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending
or, to the knowledge of the Depositor, threatened or likely to be
asserted against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with
respect to any of the transactions contemplated by this Agreement or
(B) with respect to any other matter which in the judgment of the
Depositor will be determined adversely to the Depositor and will if
determined adversely to the Depositor materially and adversely affect
it or its business, assets, operations or condition, financial or
otherwise, or adversely affect its ability to perform its obligations
under this Agreement; and
(vi) immediately prior to the transfer and assignment of
the Mortgage Loans to the Trustee, the Depositor was the sole owner
of record and holder of each Mortgage Loan, and the Depositor had
good and marketable title thereto, and had full right to transfer and
sell each Mortgage Loan to the Trustee free and clear, subject only
to (1) liens of current real property taxes and assessments not yet
due and payable and, if the related Mortgaged Property is a
condominium unit, any lien for common charges permitted by statute,
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording of
such Mortgage acceptable to mortgage lending institutions in the area
in which the related Mortgaged Property is located and specifically
referred to in the lender's Title Insurance Policy or attorney's
opinion of title and abstract of title delivered to the originator of
such Mortgage Loan, and (3) such other matters to which like
properties are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage, of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security
interest, and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan pursuant to this Agreement.
(b) The representations and warranties of each Transferor with
respect to the related Mortgage Loans in the applicable Transfer Agreement,
which have been assigned to the Trustee hereunder, were made as of the date
specified in the applicable Transfer Agreement (or underlying agreement, if
such Transfer Agreement is in the form of an assignment of a prior agreement).
To the extent that any fact, condition or event with respect to a Mortgage
Loan constitutes a breach of both (i) a representation or warranty of the
applicable Transferor under the applicable Transfer Agreement and (ii) a
representation or warranty of ▇▇▇▇▇▇ Capital under the Mortgage Loan Sale
Agreement, the only right or remedy of the Trustee or of any Certificateholder
shall be the Trustee's right to enforce the obligations of the applicable
Transferor under any applicable representation or warranty made by it. The
Trustee acknowledges that the representations and warranties of ▇▇▇▇▇▇ Capital
in Section 1.04(b) of the Mortgage Loan Sale Agreement are applicable only to
facts or conditions that arise or events that occur subsequent to the date as
of which the representations and warranties with respect to the related
Mortgage Loans in the Transfer Agreements were made, and which do not
constitute a breach of any representation or warranty made by the applicable
Transferor in the applicable Transfer Agreement. The Trustee acknowledges that
▇▇▇▇▇▇ Capital shall have no obligation or liability with respect to any
breach of a representation or warranty made by it with respect to the Mortgage
Loans if the fact, condition or event constituting such breach also
constitutes a breach of a representation or warranty made by the applicable
Transferor in the applicable Transfer Agreement, without regard to whether
such Transferor fulfills its contractual obligations in respect of such
representation or warranty. The Trustee further acknowledges that the
Depositor shall have no obligation or liability with respect to any breach of
any representation or warranty with respect to the Mortgage Loans (except as
set forth in Section 2.03(a)(vi)) under any circumstances.
Section 2.04. Discovery of Breach. It is understood and agreed that
the representations and warranties (i) set forth in Section 2.03, (ii) of
▇▇▇▇▇▇ Capital set forth in the Mortgage Loan Sale Agreement and assigned to
the Trustee by the Depositor hereunder and (iii) of each Transferor, assigned
by ▇▇▇▇▇▇ Capital to the Depositor pursuant to the Mortgage Loan Sale
Agreement and assigned to the Trustee by the Depositor hereunder shall each
survive delivery of the Mortgage Files and the Assignment of Mortgage of each
Mortgage Loan to the Trustee and shall continue throughout the term of this
Agreement. Upon discovery by either the Depositor, the Master Servicer or the
Trustee of a breach of any of such representations and warranties that
adversely and materially affects the value of the related Mortgage Loan, the
party discovering such breach shall give prompt written notice to the other
parties. Within 90 days of the discovery of a breach of any representation or
warranty given to the Trustee by the Depositor or given by ▇▇▇▇▇▇ Capital and
assigned to the Trustee, the Depositor or ▇▇▇▇▇▇ Capital, as applicable, shall
either (a) cure such breach in all material respects, (b) repurchase such
Mortgage Loan or any property acquired in respect thereof from the Trustee at
the Purchase Price or (c) within the two year period following the Closing
Date, substitute a Qualifying Substitute Mortgage Loan for the affected
Mortgage Loan. In the event of discovery of a breach of any representation and
warranty of any Transferor assigned to the Trustee, the Trustee may enforce
its rights under the applicable Transfer Agreement for the benefit of
Certificateholders.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans.
(a) With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Agreement, by ▇▇▇▇▇▇ Capital pursuant to the Mortgage Loan Sale Agreement
or by any Transferor pursuant to the applicable Transfer Agreement, the
principal portion of the funds received by the Trustee in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and
shall be deposited in the Collection Account. The Trustee, upon receipt of the
full amount of the Purchase Price for a Deleted Mortgage Loan, or upon receipt
of the Mortgage File for a Qualifying Substitute Mortgage Loan substituted for
a Deleted Mortgage Loan (and any applicable Substitution Amount), shall
release or cause to be released and reassign to the Depositor, ▇▇▇▇▇▇ Capital
or the applicable Transferor, as applicable, the related Mortgage File for the
Deleted Mortgage Loan and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be necessary to vest in such party or its designee or
assignee title to any Deleted Mortgage Loan released pursuant hereto, free and
clear of all security interests, liens and other encumbrances created by this
Agreement, which instruments shall be prepared by the Trustee (or its
custodian), and the Trustee shall have no further responsibility with respect
to the Mortgage File relating to such Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee (or its custodian) pursuant to the terms of this
Article II in exchange for a Deleted Mortgage Loan: (i) the Depositor, the
applicable Transferor or ▇▇▇▇▇▇ Capital, as applicable, must deliver to the
Trustee (or its custodian) the Mortgage File for the Qualifying Substitute
Mortgage Loan containing the documents set forth in Section 2.01(b) along with
a written certification certifying as to the delivery of such Mortgage File
and containing the granting language set forth in Section 2.01(a); and (ii)
the Depositor will be deemed to have made, with respect to such Qualified
Substitute Mortgage Loan, each of the representations and warranties made by
it with respect to the related Deleted Mortgage Loan. As soon as practicable
after the delivery of any Qualifying Substitute Mortgage Loan hereunder, the
Trustee, at the expense of the Depositor and at the direction and with the
cooperation of the Servicer, shall (i) with respect to a Qualifying Substitute
Mortgage Loan that is a Non-MERS Mortgage Loan, cause the Assignment of
Mortgage to be recorded by the Servicer if required pursuant to Section
2.01(c)(i), or (ii) with respect to a Qualifying Substitute Mortgage Loan that
is a MERS Mortgage Loan, cause to be taken such actions as are necessary to
cause the Trustee to be clearly identified as the owner of each such Mortgage
Loan on the records of MERS if required pursuant to Section 2.01(c)(ii).
(c) Notwithstanding any other provision of this Agreement, the right
to substitute Mortgage Loans pursuant to this Article II shall be subject to
the additional limitations that no substitution of a Qualifying Substitute
Mortgage Loan for a Deleted Mortgage Loan shall be made unless the Trustee has
received an Opinion of Counsel (at the expense of the party seeking to make
the substitution) that, under current law, such substitution will not (A)
affect adversely the status of any REMIC established hereunder as a REMIC, or
of the related "regular interests" as "regular interests" in any such REMIC,
or (B) cause any such REMIC to engage in a "prohibited transaction" or
prohibited contribution pursuant to the REMIC Provisions.
Section 2.06. Grant Clause. It is intended that the conveyance of the
Depositor's right, title and interest in and to property constituting the
Trust Fund pursuant to this Agreement shall constitute, and shall be construed
as, a sale of such property and not a grant of a security interest to secure a
loan. However, if such conveyance is deemed to be in respect of a loan, it is
intended that: (1) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (2) the Depositor hereby
grants to the Trustee for the benefit of the Holders of the Certificates a
first priority security interest in all of the Depositor's right, title and
interest in, to and under, whether now owned or hereafter acquired, the Trust
Fund and all proceeds of any and all property constituting the Trust Fund to
secure payment of the Certificates; and (3) this Agreement shall constitute a
security agreement under applicable law. If such conveyance is deemed to be in
respect of a loan and the Trust created by this Agreement terminates prior to
the satisfaction of the claims of any Person holding any Certificate, the
security interest created hereby shall continue in full force and effect and
the Trustee shall be deemed to be the collateral agent for the benefit of such
Person, and all proceeds shall be distributed as herein provided.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. (a) The Certificates shall be
issuable in registered form only and shall be securities governed by Article 8
of the New York Uniform Commercial Code. The Book-Entry Certificates will be
evidenced by one or more certificates, beneficial ownership of which will be
held in the dollar denominations in Certificate Principal Amount or Notional
Principal Amount, as applicable, or in the Percentage Interests, specified
herein. Each Class of Book-Entry Certificates shall be issued in the minimum
denominations in Certificate Principal Amount (or Notional Amount) or
Percentage Interest specified in the Preliminary Statement hereto and in
integral multiples of $1 or 5% (in the case of Certificates issued in
Percentage Interests) in excess thereof. Each Class of Non-Book Entry
Certificates other than the Residual Certificate shall be issued in
definitive, fully registered form in the minimum denominations in Certificate
Principal Amount (or Notional Amount) specified in the Preliminary Statement
hereto and in integral multiples of $1 in excess thereof. The Residual
Certificate shall be issued as a single Certificate and maintained in
definitive, fully registered form in a minimum denomination equal to 100% of
the Percentage Interest of such Class. The Certificates may be issued in the
form of typewritten certificates. One Certificate of each Class of
Certificates other than any Class of Residual Certificates may be issued in
any denomination in excess of the minimum denomination.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Each Certificate
shall, on original issue, be authenticated by the Trustee upon the order of
the Depositor upon receipt by the Trustee of the Mortgage Files described in
Section 2.01. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by an authorized officer of the Trustee or the
Authenticating Agent, if any, by manual signature, and such certification upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. At any time and
from time to time after the execution and delivery of this Agreement, the
Depositor may deliver Certificates executed by the Depositor to the Trustee or
the Authenticating Agent for authentication and the Trustee or the
Authenticating Agent shall authenticate and deliver such Certificates as in
this Agreement provided and not otherwise.
Section 3.02. Registration. The Trustee is hereby appointed, and
hereby accepts its appointment as, Certificate Registrar in respect of the
Certificates and shall maintain books for the registration and for the
transfer of Certificates (the "Certificate Register"). The Trustee may appoint
a bank or trust company to act as Certificate Registrar. A registration book
shall be maintained for the Certificates collectively. The Certificate
Registrar may resign or be discharged or removed and a new successor may be
appointed in accordance with the procedures and requirements set forth in
Sections 6.06 and 6.07 hereof with respect to the resignation, discharge or
removal of the Trustee and the appointment of a successor Trustee. The
Certificate Registrar may appoint, by a written instrument delivered to the
Holders and the Master Servicer, any bank or trust company to act as
co-registrar under such conditions as the Certificate Registrar may prescribe;
provided, however, that the Certificate Registrar shall not be relieved of any
of its duties or responsibilities hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates. (a) A
Certificate (other than Book-Entry Certificates which shall be subject to
Section 3.09 hereof) may be transferred by the Holder thereof only upon
presentation and surrender of such Certificate at the office of the
Certificate Registrar duly endorsed or accompanied by an assignment duly
executed by such Holder or his duly authorized attorney in such form as shall
be satisfactory to the Certificate Registrar. Upon the transfer of any
Certificate in accordance with the preceding sentence, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver to the transferee, one or more new Certificates of the same Class and
evidencing, in the aggregate, the same aggregate Certificate Principal Amount
as the Certificate being transferred. No service charge shall be made to a
Certificateholder for any registration of transfer of Certificates, but the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any registration
of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any
number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the
same obligations, and will be entitled to the same rights and privileges, as
the Certificates surrendered. No service charge shall be made to a
Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute, and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein.
The following restrictions shall apply with respect to the transfer
and registration of transfer of a Restricted Certificate to a transferee that
takes delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer
of a Restricted Certificate if the requested transfer is (x) to the
Depositor or the Placement Agent, an affiliate (as defined in Rule
405 under the ▇▇▇▇ ▇▇▇) of the Depositor or the Placement Agent or
(y) being made to a "qualified institutional buyer" (a "QIB") as
defined in Rule 144A under the Securities Act of 1933, as amended
(the "Act") by a transferor that has provided the Trustee with a
certificate in the form of Exhibit F hereto; and
(ii) The Certificate Registrar shall register the
transfer of a Restricted Certificate if the requested transfer is
being made to an "accredited investor" under Rule 501(a)(1), (2), (3)
or (7) under the Act by a transferor who furnishes to the Trustee a
letter of the transferee substantially in the form of Exhibit G
hereto.
(d) (i) No transfer of an ERISA-Restricted Certificate in the form of
a Definitive Certificate shall be made to any Person unless the Trustee has
received (A) a certificate substantially in the form of Exhibit H hereto from
such transferee or (B) an Opinion of Counsel satisfactory to the Trustee and
the Depositor to the effect that the purchase and holding of such a
Certificate will not constitute or result in the assets of the Trust Fund
being deemed to be "plan assets" subject to the prohibited transactions
provisions of ERISA or Section 4975 of the Code and will not subject the
Trustee or the Depositor to any obligation in addition to those undertaken in
the Agreement; provided, however, that the Trustee will not require such
certificate or opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Trustee has rendered an opinion to the
effect that the purchase and holding of an ERISA-Restricted Certificate by a
Plan or a Person that is purchasing or holding such a Certificate with the
assets of a Plan will not constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code. The preparation and delivery of the
certificate and opinions referred to above shall not be an expense of the
Trust Fund, the Trustee or the Depositor. Notwithstanding the foregoing, no
opinion or certificate shall be required for the initial issuance of the
ERISA-Restricted Certificates.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person is (A) not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Trustee with an effective Internal
Revenue Service Form 4224 or successor form at the time and in the manner
required by the Code (any such person who is not covered by clause (A) or (B)
above is referred to herein as a "Non-permitted Foreign Holder").
Prior to and as a condition of the registration of any transfer, sale
or other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto
as Exhibit D-1 representing and warranting, among other things, that such
transferee is (i) neither a Disqualified Organization, an agent or nominee
acting on behalf of a Disqualified Organization, nor a Non-permitted Foreign
Holder (any such transferee, a "Permitted Transferee") and (ii) a QIB or
either the Depositor or an affiliate (as defined in Rule 405 under the Act)
thereof and the proposed transferor shall deliver to the Trustee an affidavit
in substantially the form attached hereto as Exhibit D-2. In addition, the
Trustee may (but shall have no obligation to) require, prior to and as a
condition of any such transfer, the delivery by the proposed transferee of an
Opinion of Counsel, addressed to the Depositor and the Trustee satisfactory in
form and substance to the Depositor, that such proposed transferee or, if the
proposed transferee is an agent or nominee, the proposed beneficial owner, is
not a Disqualified Organization, agent or nominee thereof, or Non-permitted
Foreign Holder. Notwithstanding the registration in the Certificate Register
of any transfer, sale, or other disposition of a Residual Certificate to a
Disqualified Organization, an agent or nominee thereof, or Non-permitted
Foreign Holder, such registration shall be deemed to be of no legal force or
effect whatsoever and such Disqualified Organization, agent or nominee
thereof, or Non-permitted Foreign Holder shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to,
the receipt of distributions on such Residual Certificate. The Trustee shall
not be under any liability to any person for any registration or transfer of a
Residual Certificate to a Disqualified Organization, agent or nominee thereof,
or Non-permitted Foreign Holder or for the maturity of any payments due on
such Residual Certificate to the Holder thereof or for taking any other action
with respect to such Holder under the provisions of the Agreement, so long as
the transfer was effected in accordance with this Section 3.03(f), unless the
Trustee shall have actual knowledge at the time of such transfer or the time
of such payment or other action that the transferee is a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder. The
Trustee shall be entitled to recover from any Holder of a Residual Certificate
that was a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder at the time it became a Holder or any subsequent
time it became a Disqualified Organization, agent or nominee thereof, or
Non-permitted Foreign Holder, all payments made on such Residual Certificate
at and after either such times (and all costs and expenses, including but not
limited to attorneys' fees, incurred in connection therewith). Any payment
(not including any such costs and expenses) so recovered by the Trustee shall
be paid and delivered to the last preceding Holder of such Residual
Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee that the registration of
transfer of such Residual Certificate was not in fact permitted by this
Section 3.03(f), the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of such registration of
transfer of such Residual Certificate. The Trustee shall be under no liability
to any Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section 3.03(f), for making any payment due
on such Certificate to the registered Holder thereof or for taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered upon receipt of the affidavit described in
the preceding paragraph of this Section 3.03(f).
(g) Each Holder of a Residual Certificate, by such Holder's
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this section.
Section 3.04. Cancellation of Certificates. Any Certificate
surrendered for registration of transfer or exchange shall be cancelled and
retained in accordance with normal retention policies with respect to
cancelled certificates maintained by the Trustee or the Certificate Registrar.
Section 3.05. Replacement of Certificates. If (i) any Certificate is
mutilated and is surrendered to the Trustee or any Authenticating Agent or
(ii) the Trustee or any Authenticating Agent receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and there
is delivered to the Trustee or the Authenticating Agent such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Depositor and any Authenticating Agent that such
destroyed, lost or stolen Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and the Trustee or any Authenticating
Agent shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Certificate Principal Amount. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee and Authenticating Agent may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee or the Authenticating Agent)
connected therewith. Any replacement Certificate issued pursuant to this
Section 3.05 shall constitute complete and indefeasible evidence of ownership
in the applicable Trust Fund, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners. Subject to the provisions of
Section 3.09 with respect to Book-Entry Certificates, the Depositor, the
Master Servicer, the Trustee, the Certificate Registrar and any agent of any
of them may treat the Person in whose name any Certificate is registered upon
the books of the Certificate Registrar as the owner of such Certificate for
the purpose of receiving distributions pursuant to Sections 5.01 and 5.02 and
for all other purposes whatsoever, and neither the Depositor, the Master
Servicer, the Trustee, the Certificate Registrar nor any agent of any of them
shall be affected by notice to the contrary.
Section 3.07. Temporary Certificates. (a) Pending the preparation of
definitive Certificates, upon the order of the Depositor, the Trustee shall
execute and shall authenticate and deliver temporary Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations as the
authorized officers executing such Certificates may determine, as evidenced by
their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and authenticate and deliver in
exchange therefor a like aggregate Certificate Principal Amount of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same
Class.
Section 3.08. Appointment of Paying Agent. The Trustee may appoint a
Paying Agent (which may be the Trustee) for the purpose of making
distributions to Certificateholders hereunder. The Trustee shall cause such
Paying Agent to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent will hold all
sums held by it for the payment to Certificateholders in an Eligible Account
in trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to the Certificateholders. All funds remitted by the
Trustee to any such Paying Agent for the purpose of making distributions shall
be paid to Certificateholders on each Distribution Date and any amounts not so
paid shall be returned on such Distribution Date to the Trustee. If the Paying
Agent is not the Trustee, the Trustee shall cause to be remitted to the Paying
Agent on or before the Business Day prior to each Distribution Date, by wire
transfer in immediately available funds, the funds to be distributed on such
Distribution Date. Any Paying Agent shall be either a bank or trust company or
otherwise authorized under law to exercise corporate trust powers.
Section 3.09. Book-Entry Certificates. (a) Each Class of Book-Entry
Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Depositor. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.09(c). Unless Definitive
Certificates have been issued to Certificate Owners of Book-Entry Certificates
pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full
force and effect;
(ii) the Depositor, the Master Servicer, the Paying
Agent, the Registrar and the Trustee may deal with the Clearing
Agency for all purposes (including the making of distributions on the
Book-Entry Certificates) as the authorized representatives of the
Certificate Owners and the Clearing Agency shall be responsible for
crediting the amount of such distributions to the accounts of such
Persons entitled thereto, in accordance with the Clearing Agency's
normal procedures;
(iii) to the extent that the provisions of this Section
3.09 conflict with any other provisions of this Agreement, the
provisions of this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and the Clearing Agency Participants
and shall be limited to those established by law and agreements
between such Certificate Owners and the Clearing Agency and/or the
Clearing Agency Participants. Unless and until Definitive
Certificates are issued pursuant to Section 3.09(c), the initial
Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of
principal of and interest on the Book-Entry Certificates to such
Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders
is required under this Agreement, unless and until Definitive Certificates
shall have been issued to Certificate Owners pursuant to Section 3.09(c), the
Trustee shall give all such notices and communications specified herein to be
given to Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i) (A) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or the Depositor is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Principal Amount of a
Class of Book-Entry Certificates identified as such to the Trustee by an
Officer's Certificate from the Clearing Agency advise the Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Trustee shall notify or cause the Certificate Registrar to
notify the Clearing Agency to effect notification to all Certificate Owners,
through the Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall issue the Definitive Certificates.
Neither the Transferor nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable, with respect to such
Definitive Certificates and the Trustee shall recognize the holders of the
Definitive Certificates as Certificateholders hereunder.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account. (a) On the Closing Date, the Master
Servicer shall open and shall thereafter maintain an account held in trust
(the "Collection Account"), entitled "Aurora Loan Services Inc., as Master
Servicer, in trust for the benefit of the Holders of Aurora Loan Services
Mortgage Pass-Through Certificates, Series 2000-2." The Collection Account
shall relate solely to the Certificates issued by the Trust Fund hereunder,
and funds in such Collection Account shall not be commingled with any other
monies.
(b) The Collection Account shall be an Eligible Account. If an
existing Collection Account ceases to be an Eligible Account, the Master
Servicer shall establish a new Collection Account that is an Eligible Account
within 30 days and transfer all funds on deposit in such existing Collection
Account into such new Collection Account.
(c) The Master Servicer shall give to the Trustee prior written
notice of the name and address of the depository institution at which the
Collection Account is maintained and the account number of such Collection
Account. On each Deposit Date, the entire amount on deposit in the Collection
Account (subject to permitted withdrawals set forth in Section 4.02),
excluding such amounts not included in the Available Distribution Amount for
such Distribution Date pursuant to clauses (A) through (G) of paragraph (1) of
the definition thereof, shall be remitted to the Trustee for deposit into the
Certificate Account by wire transfer in immediately available funds. The
Master Servicer, at its option, may choose to make daily remittances from the
Collection Account to the Trustee for deposit into the Certificate Account.
(d) The Master Servicer shall deposit or cause to be deposited into
the Collection Account, no later than the Business Day following the Closing
Date, any amounts representing Scheduled Payments on the Mortgage Loans due
after the Cut-off Date and received by the Master Servicer on or before the
Closing Date. Thereafter, the Master Servicer shall deposit or cause to be
deposited in the Collection Account on the applicable Remittance Date the
following amounts received or payments made by it (other than in respect of
principal of and interest on the Mortgage Loans due on or before the Cut-Off
Date):
(i) all payments on account of principal, including
Principal Prepayments and late collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans (other than payments due prior to the Cut-off Date), net of the
Servicing Fee and Master Servicing Fee with respect to each such
Mortgage Loan, but only to the extent of the amount permitted to be
withdrawn or withheld from the Collection Account in accordance with
Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with
respect to a Mortgage Loan not otherwise specified in this paragraph
(d), including all Net Liquidation Proceeds with respect to the
Mortgage Loans and REO Property, and all amounts received in
connection with the operation of any REO Property, net of any unpaid
Servicing Fees and Master Servicing Fees with respect to such
Mortgage Loans, but only to the extent of the amount permitted to be
withdrawn or withheld from the Collection Account in accordance with
Sections 5.04 and 9.21; provided that if the Servicer is also the
Retained Interest Holder with respect to any Mortgage Loan, payments
on account of interest on the Mortgage Loans as to which the Servicer
is the Retained Interest Holder may also be made net of the Retained
Interest with respect to each such Mortgage Loan.
(iv) all Insurance Proceeds;
(v) all Advances made by the Master Servicer or the
Servicer pursuant to Section 5.04 or the Servicing Agreement; and
(vi) all proceeds of any Mortgage Loan purchased by any
Person.
(e) Funds in the Collection Account may be invested in Eligible
Investments (selected by and at the written direction of the Master Servicer)
which shall mature not later than the earlier of (a) the Deposit Date (except
that if such Eligible Investment is an obligation of the Trustee or the Paying
Agent, if other than the Trustee, and such Collection Account is maintained
with the Trustee or the Paying Agent, if other than the Trustee, then such
Eligible Investment shall mature not later than such applicable Distribution
Date) or (b) the day on which the funds in such Collection Account are
required to be remitted to the Trustee for deposit into the Certificate
Account, and any such Eligible Investment shall not be sold or disposed of
prior to its maturity. All such Eligible Investments shall be made in the name
of the Trustee (in its capacity as such) or its nominee. All income and gain
realized from any such investment shall be for the benefit of the Master
Servicer and shall be subject to its withdrawal or order from time to time,
subject to Section 5.05, and shall not be part of the Trust Fund. The amount
of any losses incurred in respect of any such investments shall be deposited
in such Collection Account by the Master Servicer out of its own funds,
without any right of reimbursement therefor, immediately as realized. The
foregoing requirements for deposit in the Collection Account are exclusive, it
being understood and agreed that, without limiting the generality of the
foregoing, payments of interest on funds in the Collection Account and
payments in the nature of late payment charges or assumption fees need not be
deposited by the Master Servicer in the Collection Account and may be retained
by the Master Servicer or the Servicer as additional servicing compensation.
If the Master Servicer deposits in the Collection Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
such Collection Account. In the event the Master Servicer does not provide
written direction to the Trustee pursuant to this Section, all funds on
deposit in the Collection Account shall remain uninvested.
Section 4.02. Application of Funds in the Collection Account. The
Master Servicer may, from time to time, make, or cause to be made, withdrawals
from the Collection Account for the following purposes:
(i) to reimburse itself or the Servicer for Advances made
by it or by the Servicer pursuant to Section 5.04 or the Servicing
Agreement; the Master Servicer's right to reimburse itself pursuant
to this subclause (i) is limited to amounts received on or in respect
of particular Mortgage Loans (including, for this purpose,
Liquidation Proceeds and amounts representing Insurance Proceeds with
respect to the property subject to the related Mortgage) which
represent late recoveries (net of the Servicing Fee and the Master
Servicing Fee) of payments of principal or interest respecting which
any such Advance was made, it being understood, in the case of any
such reimbursement, that the Master Servicer's or Servicer's right
thereto shall be prior to the rights of the Certificateholders;
(ii) to reimburse itself or the Servicer for any
Servicing Advances made by it or by the Servicer that it determines
in good faith will not be recoverable from amounts representing late
recoveries of payments of principal or interest respecting the
particular Mortgage Loan as to which such Servicing Advance was made
or from Liquidation Proceeds or Insurance Proceeds with respect to
such Mortgage Loan, it being understood, in the case of any such
reimbursement, that such Master Servicer's or Servicer's right
thereto shall be prior to the rights of the Certificateholders;
(iii) to reimburse itself or the Servicer from
Liquidation Proceeds for Liquidation Expenses and for amounts
expended by it pursuant to Sections 9.20 and 9.22(a) or the Servicing
Agreement in good faith in connection with the restoration of damaged
property and, to the extent that Liquidation Proceeds after such
reimbursement exceed the unpaid principal balance of the related
Mortgage Loan, together with accrued and unpaid interest thereon at
the applicable Mortgage Rate less the Servicing Fee and the Master
Servicing Fee for such Mortgage Loan to the Due Date next succeeding
the date of its receipt of such Liquidation Proceeds, to pay to
itself out of such excess the amount of any unpaid assumption fees,
late payment charges or other Mortgagor charges on the related
Mortgage Loan and to retain any excess remaining thereafter as
additional servicing compensation, it being understood, in the case
of any such reimbursement or payment, that such Master Servicer's or
Servicer's right thereto shall be prior to the rights of the
Certificateholders;
(iv) in the event it has elected not to pay itself the
Master Servicing Fee out of any Mortgagor payment on account of
interest or other recovery with respect to a particular Mortgage Loan
prior to the deposit of such Mortgagor payment or recovery in the
Collection Account, to pay to itself the Master Servicing Fee for
each Distribution Date and any unpaid Master Servicing Fees for prior
Distribution Dates, as reduced pursuant to Section 5.05, from any
Mortgagor payment as to interest or such other recovery with respect
to that Mortgage Loan, as is permitted by this Agreement;
(v) to reimburse itself or the Servicer for expenses
incurred by and recoverable by or reimbursable to it or the Servicer
pursuant to Section 9.04, 9.06, 9.16 or 9.22(a) or pursuant to the
Servicing Agreement, and to reimburse itself for any expenses
reimbursable to it pursuant to Section 10.01(c);
(vi) to pay to the applicable Person, with respect to
each Mortgage Loan or REO Property acquired in respect thereof that
has been repurchased by such Person pursuant to this Agreement, all
amounts received thereon and not distributed on the date on which the
related repurchase was effected;
(vii) subject to Section 5.04, to pay to itself income
earned on the investment of funds deposited in the Collection
Account;
(viii) to make payments to the Trustee for deposit into
the Certificate Account in the amounts and in the manner provided for
in Section 4.04;
(ix) to make distributions of the Retained Interest to
the Retained Interest Holder on each Distribution Date (other than
any Retained Interest not deposited into the Collection Account in
accordance with Section 4.01(d)(iii));
(x) to make payment to itself and others pursuant to any
provision of this Agreement;
(xi) to withdraw funds deposited in error in the
Collection Account;
(xii) to clear and terminate any Collection Account
pursuant to Section 7.02;
(xiii) to reimburse a successor Master Servicer (solely in
its capacity as successor Master Servicer), for any fee or advance
occasioned by a termination of the Master Servicer, and the
assumption of such duties by the Trustee or a successor Master
Servicer appointed by the Trustee pursuant to Section 6.14, in each
case to the extent not reimbursed by the terminated Master Servicer,
it being understood, in the case of any such reimbursement or
payment, that the right of the Master Servicer or the Trustee thereto
shall be prior to the rights of the Certificateholders; and
(xiv) to reimburse the Servicer for such amounts as are
due thereto under the Servicing Agreement and have not been retained
by or paid to the Servicer to the extent provided in the Servicing
Agreement.
The Servicer shall be entitled to retain as additional servicing
compensation any Prepayment Penalty Amounts or Prepayment Interest Excess.
In connection with withdrawals pursuant to subclauses (i), (iii),
(iv) and (vi) above, the Master Servicer's or Servicer's entitlement thereto
is limited to collections or other recoveries on the related Mortgage Loan.
The Master Servicer shall therefore keep and maintain a separate accounting
for each Mortgage Loan it master services for the purpose of justifying any
withdrawal from the Collection Account it maintains pursuant to such subclause
(i), (iii), (iv) and (vi).
Section 4.03. Reports to Certificateholders. (a) On each Distribution
Date, the Trustee shall deliver or cause to be delivered by first class mail
to each Certificateholder a written report setting forth the following
information, by Mortgage Pool and Certificate Group (on the basis of Mortgage
Loan level information obtained from the Servicer):
(i) the aggregate amount of the distribution to be made
on such Distribution Date to the Holders of each Class of
Certificates, other than any Class of Notional Certificates,
allocable to principal on the Mortgage Loans, including Liquidation
Proceeds and Insurance Proceeds, stating separately the amount
attributable to scheduled principal payments and unscheduled payments
in the nature of principal in each Mortgage Pool;
(ii) the aggregate amount of the distribution to be made
on such Distribution Date to the Holders of each Class of
Certificates, other than any Class of Principal Only Certificates,
allocable to interest, including any Accrual Amount added to the
Class Principal Amount of any Class of Accrual Certificates;
(iii) the amount, if any, of any distribution to the
Holders of a Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to
be made by or on behalf of the Master Servicer or the Servicer (or
the Trustee) with respect to such Distribution Date, (B) the
aggregate amount of such Advances actually made, and (C) the amount,
if any, by which (A) above exceeds (B) above;
(v) the Aggregate Principal Balance of the Mortgage Loans
and the Non-AP Pool Balance of each Mortgage Pool for such
Distribution Date, after giving effect to payments allocated to
principal reported under clause (i) above;
(vi) the Class Principal Amount (or Class Notional
Amount) of each Class of Certificates, to the extent applicable, as
of such Distribution Date after giving effect to payments allocated
to principal reported under clause (i) above (and to the addition of
any Accrual Amount in the case of any Class of Accrual Certificates),
separately identifying any reduction of any of the foregoing
Certificate Principal Amounts due to Realized Losses:
(vii) any Realized Losses realized with respect to the
Mortgage Loans (x) in the applicable Prepayment Period and (y) in the
aggregate since the Cut-off Date, stating separately the amount of
Special Hazard Losses, Fraud Losses and Bankruptcy Losses and the
aggregate amount of such Realized Losses, and the remaining Special
Hazard Loss Amount, Fraud Loss Amount and Bankruptcy Loss Amount;
(viii) the amount of the Master Servicing Fees, Servicing
Fees and Trustee Fee paid during the Due Period to which such
distribution relates;
(ix) the number and aggregate Scheduled Principal Balance
of Mortgage Loans, as reported to the Trustee by the Master Servicer,
(a) remaining outstanding (b) delinquent one month, (c) delinquent
two months, (d) delinquent three or more months, and (e) as to which
foreclosure proceedings have been commenced as of the close of
business on the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs;
(x) the deemed principal balance of each REO Property as
of the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Distribution Date
occurs;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the principal balance
of such Mortgage Loan and the number of such Mortgage Loans as of the
close of business on the last Business Day of the calendar month
immediately preceding the month in which such Distribution Date
occurs;
(xii) with respect to substitution of Mortgage Loans in
the preceding calendar month, the Scheduled Principal Balance of each
Deleted Mortgage Loan, and of each Qualifying Substitute Mortgage
Loan;
(xiii) the aggregate outstanding Interest Shortfalls and
Net Prepayment Interest Shortfalls, if any, for each Class of
Certificates, after giving effect to the distribution made on such
Distribution Date;
(xiv) the Certificate Interest Rate applicable to such
Distribution Date with respect to each Class of Certificates;
(xv) if applicable, the amount of any shortfall (i.e.,
the difference between the aggregate amounts of principal and
interest which Certificateholders would have received if there were
sufficient available amounts in the Certificate Account and the
amounts actually distributed); and
(xvi) any other "loan-level" information for any Mortgage
Loans that are delinquent three or more months and any REO Property
held by the Trust that is reported by the Master Servicer to the
Trustee.
In the case of information furnished pursuant to subclauses (i), (ii)
and (viii) above, the amounts shall be expressed as a dollar amount per $1,000
of original principal amount of Certificates.
The foregoing information and reports shall be prepared and
determined by the Trustee based solely on Mortgage Loan data provided to the
Trustee by the Master Servicer no later than four Business Days prior to the
Distribution Date. In preparing or furnishing the Mortgage Loan data to the
Trustee, the Master Servicer shall be entitled to rely conclusively on the
accuracy of the information or data regarding the Mortgage Loans and the
related REO Property that has been provided to the Master Servicer by the
Servicer, and the Master Servicer shall not be obligated to verify, recompute,
reconcile or recalculate any such information or data. The Trustee shall be
entitled to conclusively rely on the Mortgage Loan data provided by the Master
Servicer and shall have no liability for any errors in such Mortgage Loan
data.
On each Distribution Date, the Trustee shall also deliver or cause to
be delivered by first class mail to the Depositor a copy of the
above-described written report, to the following address: Mortgage Finance
Group, ▇▇▇▇▇▇ Brothers Inc., Three World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or to such other
address as the Depositor may designate.
(b) Upon the reasonable advance written request of any
Certificateholder that is a savings and loan, bank or insurance company, which
request, if received by the Trustee, will be promptly forwarded to the Master
Servicer, the Master Servicer shall provide, or cause to be provided, (or, to
the extent that such information or documentation is not required to be
provided by the Servicer under the Servicing Agreement, shall use reasonable
efforts to obtain such information and documentation from the Servicer, and
provide) to such Certificateholder such reports and access to information and
documentation regarding the Mortgage Loans as such Certificateholder may
reasonably deem necessary to comply with applicable regulations of the Office
of Thrift Supervision or its successor or other regulatory authorities with
respect to investment in the Certificates; provided, however, that the Master
Servicer shall be entitled to be reimbursed by such Certificateholder for such
Master Servicer's actual expenses incurred in providing such reports and
access.
(c) Within 90 days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Trustee shall
send to each Person who at any time during the calendar year was a
Certificateholder of record, and make available to Certificate Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to Certificateholders
pursuant to Section 4.03(a) on an annual basis as may be required to enable
such Holders to prepare their federal income tax returns. Such information
shall include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund. The
Master Servicer shall provide the Trustee with such information as is
necessary for the Trustee to prepare such reports.
Section 4.04. Certificate Account. (a) The Trustee shall establish
and maintain in its name, as trustee, a trust account (the "Certificate
Account"), to be held in trust for the benefit of the Certificateholders until
disbursed pursuant to the terms of this Agreement. The Certificate Account
shall be an Eligible Account. If the existing Certificate Account ceases to be
an Eligible Account, the Trustee shall establish a new Certificate Account
that is an Eligible Account within 20 Business Days and transfer all funds on
deposit in such existing Certificate Account into such new Certificate
Account. The Certificate Account shall relate solely to the Certificates
issued hereunder and funds in the Certificate Account shall be held separate
and apart from and shall not be commingled with any other monies including,
without limitation, other monies of the Trustee held under this Agreement.
(b) The Trustee shall cause to be deposited into the Certificate
Account on the day on which, or, if such day is not a Business Day, the
Business Day immediately following the day on which, any monies are remitted
by the Master Servicer to the Trustee all such amounts. The Trustee shall make
withdrawals from the Certificate Account only for the following purposes:
(i) to withdraw amounts deposited in the Certificate
Account in error;
(ii) to pay itself any investment income earned with
respect to funds in the Certificate Account invested in Eligible
Investments as set forth in subsection (c) below, and to make
payments to itself prior to making distributions pursuant to Section
5.02 for any expenses or other indemnification owing to the Trustee
and others pursuant to any provision of this Agreement;
(iii) to make payments of the Master Servicing Fee (to
the extent not already withheld or withdrawn from the Collection
Account by the Master Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders
pursuant to Article V; and
(v) to clear and terminate the Certificate Account
pursuant to Section 7.02.
(c) The Trustee may invest, or cause to be invested, funds held in
the Certificate Account, which funds, if invested, shall be invested in
Eligible Investments (which may be obligations of the Trustee). All such
investments must mature no later than the next Distribution Date, and shall
not be sold or disposed of prior to their maturity. All such Eligible
Investments will be made in the name of the Trustee (in its capacity as such)
or its nominee. All income and gain realized from any such investment shall be
compensation for the Trustee and shall be subject to its withdrawal on order
from time to time. The amount of any losses incurred in respect of any such
investments shall be paid by the Trustee for deposit in the Certificate
Account out of its own funds, without any right of reimbursement therefor,
immediately as realized. Funds held in the Certificate Account that are not
invested shall be held in cash.
Section 4.05. Determination of LIBOR. (a) If the outstanding
Certificates include any LIBOR Certificates or consist of any LIBOR
Components, then on each LIBOR Determination Date the Trustee shall determine
LIBOR on the basis of the offered LIBOR quotations of the Reference Banks as
of 11:00 a.m. London time on such LIBOR Determination Date as follows:
(i) If on any LIBOR Determination Date two or more of the
Reference Banks provide such offered quotations, LIBOR for the next
Accrual Period will be the arithmetic mean of such offered quotations
(rounding such arithmetic mean if necessary to the nearest five
decimal places;
(ii) If on any LIBOR Determination Date only one or none
of the Reference Banks provides such offered quotations, LIBOR for
the next Accrual Period will be whichever is the higher of (x) LIBOR
as determined on the previous LIBOR Determination Date or (y) the
Reserve Interest Rate. The "Reserve Interest Rate" will be either (A)
the rate per annum which the Master Servicer determines to be the
arithmetic mean (rounding such arithmetic mean if necessary to the
nearest five decimal places) of the one-month Eurodollar lending
rates that New York City banks selected by the Depositor are quoting,
on the relevant LIBOR 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 Eurodollar lending rate that the New York
City banks selected by the Depositor are quoting on such LIBOR
Determination Date to leading European banks; and
(iii) If on any LIBOR Determination Date the Trustee is
required but is unable to determine the Reserve Interest Rate in the
manner provided in paragraph (ii) above, LIBOR for the next Accrual
Period will be LIBOR as determined on the previous LIBOR
Determination Date or, in the case of the first LIBOR Determination
Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate Interest Rate or Component Interest
Rate (or Rates) applicable to the LIBOR Certificates and LIBOR Components for
the relevant Accrual Period, in the absence of manifest error, will be final
and binding. In all cases, the Trustee may conclusively rely on quotations of
LIBOR for the Reference Banks as such quotations appear on the display
designated "LIUS01M" on the Bloomberg Financial Markets Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) whose quotations appear on the "Bloomberg Screen LIUS01M Index
Page" (as described in the definition of LIBOR) on the applicable LIBOR
Determination Date and (iii) which have been designated as such by the
Depositor and are able and willing to provide such quotations to the Depositor
on each LIBOR Determination Date. The Reference Banks initially shall be:
Barclay's plc, Bank of Tokyo, National Westminster Bank and Trust Company and
Bankers Trust Company. If any of the initial Reference Banks should be removed
from the Bloomberg Screen LIUS01M Index Page or in any other way fail to meet
the qualifications of a Reference Bank, the Depositor shall use its best
efforts to designate alternate Reference Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date LIBOR would, without giving effect to this
paragraph (d), be determined pursuant to such clause (a)(iii), then the
Depositor shall select an alternative interest rate index over which the
Depositor has no control that is used for determining Eurodollar lending rates
and is calculated and published (or otherwise made available) by an
independent third party, and such alternative interest rate index shall
constitute LIBOR for all purposes hereof.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally. (a) Subject to Section 7.01
respecting the final distribution on the Certificates, on each Distribution
Date the Trustee or the Paying Agent shall make distributions in accordance
with this Article V. Such distributions shall be made by check mailed to each
Certificateholder's address as it appears on the Certificate Register of the
Certificate Registrar (which shall initially be the Trustee) or, upon written
request made to the Trustee at least three Business Days prior to the related
Distribution Date to any Certificateholder owning an aggregate initial
Certificate Principal Amount of at least $2,500,000, or, in the case of the
Notional Certificates and Principal Only Certificates, a Percentage Interest
of 100%, by wire transfer in immediately available funds to an account
specified in the request and at the expense of such Certificateholder;
provided, however, that the final distribution in respect of any Certificate
shall be made only upon presentation and surrender of such Certificate at the
Corporate Trust Office. Wire transfers will be made at the expense of the
Holder requesting such wire transfer by deducting a wire transfer fee from the
related distribution. Notwithstanding such final payment of principal of any
of the Certificates, each Residual Certificate will remain outstanding until
the termination of each REMIC and the payment in full of all other amounts due
with respect to the Residual Certificate and at such time such final payment
in retirement of the Residual Certificate will be made only upon presentation
and surrender of such Certificate at the Corporate Trust Office of the Trustee
or at the office of its designated presenting agent in New York City. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Certificate Principal Amounts (or
initial Notional Amounts).
Section 5.02. Distributions from the Certificate Account. (a) On each
Distribution Date, the Trustee (or the Paying Agent on behalf of the Trustee)
shall withdraw from the Certificate Account the Available Distribution Amount
with respect to each Mortgage Pool, and shall distribute such amount to itself
(in the case of clause (i)) and to the Holders of record of each Class of
Certificates, in the following order of priority:
(i) from the Available Distribution Amount for each
Mortgage Pool, to the Trustee, the Trustee Fee allocable to
such Mortgage Pool for such Distribution Date;
(ii) from the Available Distribution Amount for
each Mortgage Pool, to each Class of Senior Certificates in
the related Certificate Group (other than any Class of
Principal Only Certificates), the Accrued Certificate
Interest thereon for such Distribution Date, as reduced by
such Class' allocable share of any Net Prepayment Interest
Shortfalls for the related Mortgage Pool for such
Distribution Date; provided, however, that any shortfall in
available amounts for each Mortgage Pool shall be allocated
among the Classes of the related Certificate Group in
proportion to the amount of Accrued Certificate Interest (as
so reduced) that would otherwise be distributable thereon;
(iii) from the Available Distribution Amount for
each Mortgage Pool, to each Class of Senior Certificates in
the related Certificate Group (other than any Class of
Principal Only Certificates), any related Interest Shortfall
for such Distribution Date; provided, however, that any
shortfall in available amounts for each Mortgage Pool shall
be allocated among the Classes of the related Certificate
Group in proportion to the Interest Shortfall for each such
Class on such Distribution Date;
(iv) from the remaining Available Distribution
Amount for each Mortgage Pool, to the Senior Certificates of
the related Certificate Group (other than any Class of
Notional Certificates), as follows.
(A) to the Class 1-A1, Class 1-A2, Class
1-AP and Class R Certificates, from the Available
Distribution Amount for Pool 1 for such
Distribution Date, in reduction of their respective
Class Principal Amounts, concurrently, as follows:
(1) to the Class R Certificate,
the Senior Principal Distribution Amount
for Pool 1 for such Distribution Date,
until the Class Principal Amount thereof
has been reduced to zero;
(2) to the Class 1-A1 and Class
1-A2 Certificates, pro rata in proportion
to their respective Class Principal
Amounts, the remaining Senior Principal
Distribution Amount for Pool 1 for such
Distribution Date, until the respective
Class Principal Amounts thereof have been
reduced to zero; and
(3) to the Class 1-AP
Certificates, the AP Principal
Distribution Amount for Pool 1 for such
Distribution Date, until the Class
Principal Amount thereof has been reduced
to zero;
(B) to the Class 2-A1, Class 2-A2 and
Class 2-AP Certificates, from the Available
Distribution Amount for Pool 2 for such
Distribution Date, in reduction of their respective
Class Principal Amounts, concurrently, as follows:
(1) to the Class 2-A1 and Class
2-A2 Certificates, pro rata in proportion
to their respective Class Principal
Amounts, the Senior Principal Distribution
Amount for Pool 2 for such Distribution
Date, until the respective Class Principal
Amounts thereof have been reduced to zero;
and
(2) to the Class 2-AP
Certificates, the AP Principal
Distribution Amount for Pool 2 for such
Distribution Date, until the Class
Principal Amount thereof has been reduced
to zero;
(v) to the Class 1-AP and Class 2-AP Certificates,
to the extent of the remaining Available Distribution Amount
for each Mortgage Pool, the Class AP Deferred Amount for
such Class and Distribution Date, until the Class Principal
Amount thereof has been reduced to zero; provided, however,
that (A) distributions pursuant to this priority shall not
exceed the aggregate Subordinate Principal Distribution
Amount for all Mortgage Pools for such date; (B) such
amounts will not reduce the Class Principal Amounts of such
Classes; and (C) in the event the aggregate Subordinate
Principal Distribution Amount for all Mortgage Pools is
insufficient to fully pay the Class AP Deferred Amount for
the Class 1-AP and Class 2-AP Certificates, such amount
shall be distributed pro rata to such Classes on the basis
of their respective Class AP Deferred Amounts;
(vi) from the remaining Available Distribution
Amount for all Mortgage Pools, subject to the prior
distribution of amounts pursuant to Section 5.02(e) in the
case of clauses (C), (F), (I), (L), (O) and (R) below, to
the Subordinated Certificates, as follows:
(A) to the Class B1 Certificates, the
Accrued Certificate Interest thereon for such
Distribution Date, as reduced by each such Class's
allocable share of any Net Prepayment Interest
Shortfalls for such Distribution Date;
(B) to the Class B1 Certificates, any
Interest Shortfall for such Class on such
Distribution Date;
(C) to the Class B1 Certificates, in
reduction of the Class Principal Amount thereof,
such Class's Subordinate Class Percentage of each
Subordinate Principal Distribution Amount for such
Distribution Date, except as provided in Section
5.02(c), until the Certificate Principal Balance
thereof has been reduced to zero;
(D) to the Class B2 Certificates, the
Accrued Certificate Interest thereon for such
Distribution Date, as reduced by each such Class's
allocable share of any Net Prepayment Interest
Shortfalls for such Distribution Date;
(E) to the Class B2 Certificates, any
Interest Shortfall for such Class on such
Distribution Date;
(F) to the Class B2 Certificates, in
reduction of the Certificate Principal Amount
thereof, such Class's Subordinate Class Percentage
of each Subordinate Principal Distribution Amount
for such Distribution Date, except as provided in
Section 5.02(c), until the Class Principal Amount
thereof has been reduced to zero;
(G) to the Class B3 Certificates, the
Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's
allocable share of any Net Prepayment Interest
Shortfalls for such Distribution Date;
(H) to the Class B3 Certificates, any
Interest Shortfall for such Class on such
Distribution Date;
(I) to the Class B3 Certificates, in
reduction of the Certificate Principal Amount
thereof, such Class's Subordinate Class Percentage
of each Subordinate Principal Distribution Amount
for such Distribution Date, except as provided in
Section 5.02(c), until the Class Principal Amount
thereof has been reduced to zero;
(J) to the Class B4 Certificates, the
Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's
allocable share of any Net Prepayment Interest
Shortfalls for such Distribution Date;
(K) to the Class B4 Certificates, any
Interest Shortfall for such Class on such
Distribution Date;
(L) to the Class B4 Certificates, in
reduction of the Certificate Principal Amount
thereof, such Class's Subordinate Class Percentage
of each Subordinate Principal Distribution Amount
for such Distribution Date, except as provided in
Section 5.02(c), until the Certificate Principal
Balance thereof has been reduced to zero;
(M) to the Class B5 Certificates, the
Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's
allocable share of any Net Prepayment Interest
Shortfalls for such Distribution Date;
(N) to the Class B5 Certificates, any
Interest Shortfall for such Class on such
Distribution Date;
(O) to the Class B5 Certificates, in
reduction of the Certificate Principal Amount
thereof, such Class's Subordinate Class Percentage
of each Subordinate Principal Distribution Amount
for such Distribution Date, except as provided in
Section 5.02(c), until the Class Principal Balance
thereof has been reduced to zero;
(P) to the Class B6 Certificates, the
Accrued Certificate Interest thereon for such
Distribution Date, as reduced by such Class's
allocable share of any Net Prepayment Interest
Shortfalls for such Distribution Date;
(Q) to the Class B6 Certificates, any
Interest Shortfall for such Class on such
Distribution Date; and
(R) to the Class B6 Certificates, in
reduction of the Certificate Principal Amount
thereof, such Class's Subordinate Class Percentage
of each Subordinate Principal Distribution Amount
for such Distribution Date, except as provided in
Section 5.02(c), until the Certificate Principal
Balance thereof has been reduced to zero.
(b) Net Prepayment Interest Shortfalls for each Mortgage Pool shall
be allocated among the Certificates of the related Certificate Group (other
than any related Principal Only Certificates) pro rata based on (i) in the
case of the related Non-AP Senior Certificates, the Accrued Certificate
Interest otherwise distributable thereon, and (ii) in the case of the
Subordinate Certificates, interest accrued on the related Apportioned
Principal Balances.
(c) (i) If on any Distribution Date the Credit Support Percentage for
the Class B1 Certificates is less than the Original Credit Support Percentage
for such Class, then, notwithstanding anything to the contrary in Section
5.02(a), no distribution of amounts described in clauses (ii) and (iii) of the
definition of Subordinate Principal Distribution Amount will be made in
respect of the Class B2, Class B3, Class B4, Class B5 or Class B6 Certificates
on such Distribution Date. (ii) If on any Distribution Date the Credit Support
Percentage for the Class B2 Certificates is less than the Original Credit
Support Percentage for such Class, then, notwithstanding anything to the
contrary in Section 5.02(a), no distribution of amounts described in clauses
(ii) and (iii) of the definition of Subordinate Principal Distribution Amount
will be made in respect of the Class B3, Class B4, Class B5 or Class B6
Certificates on such Distribution Date. (iii) If on any Distribution Date the
Credit Support Percentage for the Class B3 Certificates is less than the
Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B4, Class B5 or Class
B6 Certificates on such Distribution Date. (iv) If on any Distribution Date
the Credit Support Percentage for the Class B4 Certificates is less than the
Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B5 or Class B6
Certificates on such Distribution Date. (v) If on any Distribution Date the
Credit Support Percentage for the Class B5 Certificates is less than the
Original Credit Support Percentage for such Class, then, notwithstanding
anything to the contrary in Section 5.02(a), no distribution of amounts
described in clauses (ii) and (iii) of the definition of Subordinate Principal
Distribution Amount will be made in respect of the Class B6 Certificates on
such Distribution Date.
Any amount not distributed in respect of any Class on any
Distribution Date pursuant to the immediately preceding paragraph will be
allocated among the remaining Subordinate Classes in proportion to their
respective Certificate Principal Amounts.
(d) On each Distribution Date, the Trustee shall distribute to the
Holder of the Class R Certificate any amounts remaining in the Upper Tier
REMIC for such Distribution Date after application of all amounts described in
paragraph (a) of this Section 5.02. Any distributions pursuant to this
paragraph (d) shall not reduce the Class Principal Amount of the Class R
Certificate.
(e) (i) On each Distribution Date prior to the Credit Support
Depletion Date but on or after the date on which the aggregate Certificate
Principal Amount of the Non-AP Senior Certificates of any Certificate Group
has been reduced to zero, amounts otherwise distributable as principal on each
Class of Subordinate Certificates pursuant to Section 5.02(a)(vi), in reverse
order of priority, in respect of such Class's Subordinate Class Percentage of
the Subordinate Principal Distribution Amount for the Mortgage Pool relating
to such retired Certificates, shall be distributed as principal to the Non-AP
Senior Certificates (other than any Notional Certificates) remaining
outstanding, until the Class Principal Amounts thereof have been reduced to
zero, provided that on such Distribution Date (a) the Aggregate Subordinate
Percentage for such Distribution Date is less than 200% of the Aggregate
Subordinate Percentage as of the Cut-off Date or (b) the average outstanding
principal balance of the Mortgage Loans in any Mortgage Pool that are
delinquent 60 days or more over the last six months as a percentage of the
related Group Subordinate Amount is greater than or equal to 50%.
(ii) On any Distribution Date on which any Certificate
Group constitutes an Undercollateralized Group, all amounts otherwise
distributable as principal on the Subordinate Certificates, in
reverse order of priority (other than amounts necessary to pay Class
AP Deferred Amounts or unpaid Interest Shortfalls) (or, following the
Credit Support Depletion Date, such other amounts described in the
immediately following sentence), will be distributed as principal to
the Non-AP Senior Certificates (other than any Notional Certificates)
of such Undercollateralized Group, until the aggregate Certificate
Principal Amount of such Non-AP Senior Certificates equals the Non-AP
Pool Balance of the related Mortgage Pool (such distribution, an
"Undercollateralization Distribution"). In the event that any
Certificate Group constitutes an Undercollateralized Group on any
Distribution Date following the Credit Support Depletion Date,
Undercollateralization Distributions will be made from any Available
Distribution Amount for the Mortgage Pool not related to an
Undercollateralized Group remaining after all required amounts have
been distributed to the Non-AP Senior Certificates of such other
Certificate Group. In addition, the amount of any unpaid Interest
Shortfalls with respect to an Undercollateralized Group on any
Distribution Date (including any Interest Shortfalls for such
Distribution Date) will be distributed to the Non-AP Senior
Certificates of such Undercollateralized Group prior to the payment
of any Undercollateralization Distributions from amounts otherwise
distributable as principal on the Subordinate Certificates, in
reverse order of priority (or, following the Credit Support Depletion
Date, as provided in the preceding sentence).
Section 5.03. Allocation of Realized Losses. (a) On any Distribution
Date, (x) the applicable AP Percentage of the principal portion of each
Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan in
each Mortgage Pool will be allocated to the related Class of Principal Only
Certificates until the Class Principal Amount thereof has been reduced to
zero; and (y) the applicable Non-AP Percentage of the principal portion of
each Realized Loss (other than any Excess Loss) in respect of a Mortgage Loan
shall be allocated in the following order of priority:
first, to the Class B6 Certificates, until the
Class Principal Amount thereof has been reduced to zero;
second, to the Class B5 Certificates, until the
Class Principal Amount thereof has been reduced to zero;
third, to the Class B4 Certificates, until the
Class Principal Amount thereof has been reduced to zero;
fourth, to the Class B3 Certificates, until the
Class Principal Amount thereof has been reduced to zero;
fifth, to the Class B2 Certificates, until the
Class Principal Amount thereof has been reduced to zero;
sixth, to the Class B1 Certificates, until the
Class Principal Amount thereof has been reduced to zero; and
seventh, to the Classes of Senior Certificates of
either Certificate Group, pro rata, in accordance with their
Class Principal Amounts; provided, that any such loss
allocated to any Class of Accrual Certificates shall be
allocated (subject to Section 5.03(c)) on the basis of the
lesser of (x) the Class Principal Amount thereof immediately
prior to the applicable Distribution Date and (y) the Class
Principal Amount thereof on the Closing Date (as reduced by
any Realized Losses previously allocated thereto).
(b) With respect to any Distribution Date, the applicable Non-AP
Percentage of the principal portion of any Excess Loss in respect of a
Mortgage Loan shall be allocated, pro rata, to the Subordinate Certificates
(without regard to which Mortgage Pool experienced the loss) and the Group 1
Certificates and the Group 2 Certificates (without regard to whether the
Realized Loss was realized by Pool 1 or Pool 2) and on the basis of the
Apportioned Principal Balances of the Classes of Subordinate Certificates and
Class Principal Amounts of the Senior Certificates; provided, that any such
loss allocated to any Class of Accrual Certificates (and any Accrual
Component) shall be allocated (subject to Section 5.03(c)) on the basis of the
lesser of (x) the Class Principal Amount thereof immediately prior to the
applicable Distribution Date and (y) the Class Principal Amount thereof on the
Closing Date (as reduced by any Realized Losses previously allocated thereto).
The applicable AP Percentage of the principal portion of an Excess Loss in a
Mortgage Pool will be applied to the related Class of Principal Only
Certificates until the Class Principal Amount thereof has been reduced to
zero.
(c) Any Realized Losses allocated to a Class of Certificates pursuant
to Section 5.03(a) or (b) shall be allocated among the Certificates of such
Class in proportion to their respective Certificate Principal Amounts. Any
allocation of Realized Losses pursuant to this paragraph (c) shall be
accomplished by reducing the Certificate Principal Amount of the related
Certificates on the related Distribution Date in accordance with Section
5.03(d).
(d) Realized Losses allocated in accordance with this Section 5.03
shall be allocated on the Distribution Date in the month following the month
in which such loss was incurred and, in the case of the principal portion
thereof, after giving effect to distributions made on such Distribution Date,
except that the aggregate amount of Realized Losses to be allocated to the
Principal Only Certificates on such Distribution Date will be taken into
account in determining distributions in respect of any related Class AP
Deferred Amount for such date.
(e) On each Distribution Date, the Subordinate Certificate Writedown
Amount for such date shall effect a corresponding reduction in the Certificate
Principal Amount of the lowest ranking Class of outstanding Subordinate
Certificates, which reduction shall occur on such Distribution Date after
giving effect to distributions made on such Distribution Date.
(f) In the event that there is a recovery of an amount in respect of
principal of a Mortgage Loan, which amount had previously been allocated as a
Realized Loss to one or more Classes of Certificates, each outstanding Class
to which any portion of such Realized Loss had previously been allocated shall
be entitled to receive, on the Distribution Date in the month following the
month in which such recovery is received, its pro rata share (based on the
Class Principal Amount thereof) of such recovery, up to the amount of the
portion of such Realized Loss previously allocated to such Class. In the event
that the total amount of such recovery exceeds the amount of Realized Loss
allocated to the outstanding Classes in accordance with the preceding
provisions, each outstanding Class of Certificates shall be entitled to
receive its pro rata share of the amount of such excess, up to the amount of
any unrecovered Realized Loss previously allocated to such Class. Any such
recovery allocated to a Class of Certificates shall not further reduce the
Certificate Principal Amount of such Certificate. Any such amounts not
otherwise allocated to any Class of Certificates, pursuant to this subsection
shall be treated as Principal Prepayments for purposes of this Agreement.
Section 5.04. Advances by Master Servicer and Trustee. (a) Advances
shall be made in respect of each Deposit Date as provided herein. If, on any
Determination Date, the Master Servicer determines that any Scheduled Payments
due during the related Due Period (other than Balloon Payments) have not been
received, the Master Servicer shall, or cause the Servicer to, advance such
amount, less an amount, if any, to be set forth in an Officer's Certificate to
be delivered to the Trustee on such Determination Date, which if advanced the
Master Servicer or the Servicer has determined would not be recoverable from
amounts received with respect to such Mortgage Loan, including late payments,
Liquidation Proceeds, Insurance Proceeds or otherwise. If the Master Servicer
determines that an Advance is required, it shall on the Deposit Date
immediately following such Determination Date either (i) remit to the Trustee
from its own funds (or funds advanced by the Servicer) for deposit in the
Certificate Account immediately available funds in an amount equal to such
Advance, (ii) cause to be made an appropriate entry in the records of the
Collection Account that funds in such account being held for future
distribution or withdrawal have been, as permitted by this Section 5.04, used
by the Master Servicer to make such Advance, and remit such immediately
available funds to the Trustee for deposit in the Certificate Account or (iii)
make Advances in the form of any combination of clauses (i) and (ii)
aggregating the amount of such Advance. Any funds being held in the Collection
Account for future distribution to Certificateholders and so used shall be
replaced by the Master Servicer from its own funds by remittance to the
Trustee for deposit in the Certificate Account on or before any future Deposit
Date to the extent that funds in the Certificate Account on such Deposit Date
shall be less than payments to Certificateholders required to be made on the
related Distribution Date. The Master Servicer and the Servicer shall be
entitled to be reimbursed from the Collection Account for all Advances made by
it as provided in Section 4.02.
(b) In the event that the Master Servicer fails for any reason to
make an Advance required to be made pursuant to Section 5.04 on or before the
Deposit Date, the Trustee, solely in its capacity as successor Master Servicer
pursuant to Section 6.14, shall, on or before the related Distribution Date,
deposit in the Certificate Account an amount equal to the excess of (a)
Advances required to be made by the Master Servicer or the Servicer that would
have been deposited in such Certificate Account over (b) the amount of any
Advance made by the Master Servicer or the Servicer with respect to such
Distribution Date; provided, however, that the Trustee shall be required to
make such Advance only if it is not prohibited by law from doing so and it has
determined that such Advance would be recoverable from amounts to be received
with respect to such Mortgage Loan, including late payments, Liquidation
Proceeds, Insurance Proceeds, or otherwise. The Trustee shall be entitled to
be reimbursed from the Certificate Account for Advances made by it pursuant to
this Section 5.04 as if it were the Master Servicer.
Section 5.05. Compensating Interest Payments. The amount of the
Aggregate Master Servicing Compensation payable to the Master Servicer in
respect of any Distribution Date shall be reduced by the amount of any
Compensating Interest Payment for such Distribution Date, but only to the
extent such Compensating Interest Payment is not actually made by the Servicer
on the applicable Remittance Date. Such amount shall not be treated as an
Advance and shall not be reimbursable to the Master Servicer.
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. (a) The Trustee, except during the
continuance of an Event of Default (of which a Responsible Officer of the
Trustee shall have actual knowledge), undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. Any
permissive right of the Trustee provided for in this Agreement shall not be
construed as a duty of the Trustee. If an Event of Default (of which a
Responsible Officer of the Trustee shall have actual knowledge) has occurred
and has not otherwise been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement and use the same degree
of care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own affairs unless the
Trustee is acting as Master Servicer, in which case it shall use the same
degree of care and skill as the Master Servicer hereunder.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they are in the form required by this Agreement; provided, however,
that the Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer, to the Trustee pursuant to
this Agreement, and shall not be required to recalculate or verify any
numerical information furnished to the Trustee pursuant to this Agreement.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful
misconduct. No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the consent or direction of Holders of
Certificates as provided in Section 6.19 hereof;
(ii) For all purposes under this Agreement, the Trustee
shall not be deemed to have notice of any Event of Default (other
than resulting from a failure by the Master Servicer (i) to remit
funds (or to make Advances) or (ii) to furnish information to the
Trustee when required to do so) unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at
the Corporate Trust Office, and such notice references the Holders of
the Certificates and this Agreement;
(iii) No provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in
this Agreement shall in any event require the Trustee to perform, or
be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement except during
such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master
Servicer in accordance with the terms of this Agreement; and
(iv) The Trustee shall not be responsible for any act or
omission of the Master Servicer. In particular, the Trustee shall not
be liable for any servicing errors or interruptions resulting from
any failure of the Master Servicer or the Servicer to maintain
computer and other information systems that are year 2000 compliant.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall use its best efforts to remit to the Master
Servicer upon receipt any such complaint, claim, demand, notice or other
document (i) which is delivered to the Corporate Trust Office of the Trustee,
(ii) of which a Responsible Officer has actual knowledge, and (iii) which
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
(e) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests
aggregating not less than 25% as to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement.
(f) Subject to Section 4.04, the Trustee shall not be held liable by
reason of any insufficiency in any account (including without limitation the
Collection Amount) held by or on behalf of the Trustee resulting from any
investment loss on any Eligible Investment included therein (except to the
extent that the Trustee is the obligor and has defaulted thereon).
(g) Except as otherwise provided herein, the Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this Agreement or
any agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any re-recording, re-filing or
re-depositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or
any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in the
Collection Account or the Certificate Account, or (D) to confirm or verify the
contents of any reports or certificates of the Master Servicer delivered to
the Trustee pursuant to this Agreement believed by the Trustee to be genuine
and to have been signed or presented by the proper party or parties.
(h) The Trustee shall not be liable in its individual capacity for an
error of judgment made in good faith by a Responsible Officer or other
officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
(i) Notwithstanding anything in this Agreement to the contrary, the
Trustee shall not be liable for special, indirect or consequential losses or
damages of any kind whatsoever (including, but not limited to, lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage
and regardless of the form of action.
Section 6.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 6.01:
(i) The Trustee may request, and may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors, opinion of counsel or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of
its counsel or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document (provided the same
appears regular on its face), unless requested in writing to do so by
Holders of at least a majority in Class Principal Amount (or Class
Notional Amount) of each Class of Certificates; provided, however,
that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable
indemnity against such expense or liability or payment of such
estimated expenses as a condition to proceeding. The reasonable
expense thereof shall be paid by the Holders requesting such
investigation;
(v) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, custodians, or attorneys, which agents, custodians or
attorneys shall have any and all of the rights, powers, duties and
obligations of the Trustee conferred on them by such appointment
provided that the Trustee shall continue to be responsible for its
duties and obligations hereunder to the extent provided herein, and
provided further that the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney
appointed with due care by the Trustee;
(vi) The Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Agreement or to
institute, conduct or defend any litigation hereunder or in relation
hereto, in each case at the request, order or direction of any of the
Certificateholders 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;
(vii) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty,
and the Trustee shall not be answerable for other than its negligence
or willful misconduct in the performance of such act; and
(viii) The Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust Fund created hereby
or the powers granted hereunder.
Section 6.03. Trustee Not Liable for Certificates. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of
the Certificates (other than the certificate of authentication on the
Certificates) or of any Mortgage Loan, or related document save that the
Trustee represents that, assuming due execution and delivery by the other
parties hereto, this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms except that such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and other similar
laws affecting the enforcement of the rights of creditors generally, and (B)
general principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law. The Trustee shall not be
accountable for the use or application by the Depositor of funds paid to the
Depositor in consideration of the assignment of the Mortgage Loans to the
Trust Fund by the Depositor or for the use or application of any funds
deposited into the Collection Account, the Certificate Account, any Escrow
Account or any other fund or account maintained with respect to the
Certificates. The Trustee shall not be responsible for the legality or
validity of this Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be
issued hereunder. Except as otherwise provided herein, the Trustee shall have
no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.
Section 6.04. Trustee May Own Certificates. The Trustee and any
Affiliate or agent of the Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates and may transact banking and trust
with the other parties hereto with the same rights it would have if it were
not Trustee or such agent.
Section 6.05. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC and
(ii) a corporation or national banking association, organized and doing
business under the laws of any State or the United States of America,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of not less than $50,000,000 and subject to
supervision or examination by federal or state authority. If such corporation
or national banking association publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then, for the purposes of this Section, the combined
capital and surplus of such corporation or national banking association shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified
in Section 6.06.
Section 6.06. Resignation and Removal of Trustee. (a) The Trustee may
at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Depositor and the Master Servicer. Upon
receiving such notice of resignation, the Depositor will promptly appoint a
successor trustee by written instrument, one copy of which instrument shall be
delivered to the resigning Trustee, one copy to the successor trustee and one
copy to the Master Servicer. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)
a tax is imposed or threatened with respect to the Trust Fund by any state in
which the Trustee or the Trust Fund held by the Trustee is located, or (iv)
the continued use of the Trustee would result in a downgrading of the rating
by the Rating Agencies of any Class of Certificates with a rating, then the
Depositor shall remove the Trustee and appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the Trustee so
removed, one copy to the successor trustee and one copy to the Master
Servicer.
(c) The Holders of more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates may at any time upon 30
days' written notice to the Trustee and to the Depositor remove the Trustee by
such written instrument, signed by such Holders or their attorney-in-fact duly
authorized, one copy of which instrument shall be delivered to the Depositor,
one copy to the Trustee so removed and one copy to the Master Servicer; the
Depositor shall thereupon use its best efforts to appoint a mutually
acceptable successor trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.07.
Section 6.07. Successor Trustee. (a) Any successor trustee appointed
as provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and
documents and statements related to each Mortgage Files held by it hereunder,
and shall duly assign, transfer, deliver and pay over to the successor trustee
the entire Trust Fund, together with all necessary instruments of transfer and
assignment or other documents properly executed necessary to effect such
transfer and such of the record or copies thereof maintained by the
predecessor trustee in the administration hereof as may be requested by the
successor trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Master Servicer and
the predecessor trustee shall execute and deliver such other instruments and
do such other things as may reasonably be required to more fully and certainly
vest and confirm in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Master Servicer shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates at their addresses as
shown in the Certificate Register and to the Rating Agencies. The expenses of
such mailing shall be borne by the Master Servicer.
Section 6.08. Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Persons succeeding to the business of the
Trustee, shall be the successor to the Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided that
such Person shall be eligible under the provisions of Section 6.05.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or
Custodian. (a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or the Certificateholders evidencing more than 50% of
the Class Principal Amount (or Class Notional Amount) of each Class of
Certificates shall each have the power from time to time to appoint one or
more Persons to act either as co-trustees jointly with the Trustee, or as
separate trustees, or as custodians, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan
outside the state where the Trustee has its principal place of business where
such separate trustee or co-trustee is necessary or advisable (or the Trustee
has been advised by the Master Servicer that such separate trustee or
co-trustee is necessary or advisable) under the laws of any state in which a
property securing a Mortgage Loan is located or for the purpose of otherwise
conforming to any legal requirement, restriction or condition in any state in
which a property securing a Mortgage Loan is located or in any state in which
any portion of the Trust Fund is located. The separate Trustees, co-trustees,
or custodians so appointed shall be trustees or custodians for the benefit of
all the Certificateholders and shall have such powers, rights and remedies as
shall be specified in the instrument of appointment; provided, however, that
no such appointment shall, or shall be deemed to, constitute the appointee an
agent of the Trustee. The obligation of the Trustee to make Advances pursuant
to Section 5.04 and 6.14 hereof shall not be affected or assigned by the
appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred
upon the Trustee in respect of the receipt, custody and payment of
moneys shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate
trustee, co-trustee, or custodian jointly, except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations, including the holding of title to the Trust
Fund or any portion thereof in any such jurisdiction, shall be
exercised and performed by such separate trustee, co-trustee, or
custodian;
(iii) no trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other
trustee or custodian hereunder; and
(iv) the Trustee or the Certificateholders evidencing
more than 50% of the Aggregate Voting Interests of the Certificates
may at any time accept the resignation of or remove any separate
trustee, co-trustee or custodian, so appointed by it or them, if such
resignation or removal does not violate the other terms of this
Agreement.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. The Trustee shall
not be responsible for any action or inaction of any separate trustee,
co-trustee or custodian. If any separate trustee, co-trustee or custodian
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to Certificateholders of the appointment shall be
required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the
co-trustees to the extent, and in accordance with the standards, specified in
Section 6.12 hereof (which compensation shall not reduce any compensation
payable to the Trustee under such Section).
Section 6.10. Authenticating Agents. (a) The Trustee may appoint one
or more Authenticating Agents which shall be authorized to act on behalf of
the Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and
a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be a corporation
organized and doing business under the laws of the United States of America or
of any state, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to do a trust business and subject to supervision
or examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any Person succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.10, the Trustee may appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Depositor and shall mail notice of
such appointment to all Holders of Certificates. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers, duties and responsibilities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.10. No Authenticating Agent shall have
responsibility or liability for any action taken by it as such at the
direction of the Trustee. Any Authenticating Agent shall be entitled to
reasonable compensation for its services and, if paid by the Trustee, it shall
be a reimbursable expense pursuant to Section 6.12.
Section 6.11. Indemnification of Trustee. The Trustee and its
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense incurred in connection
with any legal proceeding and incurred without negligence or willful
misconduct on their part, arising out of, or in connection with, the
acceptance or administration of the trusts created hereunder, including the
costs and expenses of defending themselves against any claim in connection
with the exercise or performance of any of their powers or duties hereunder,
provided that:
(i) with respect to any such claim, the Trustee shall have
given the Depositor, the Master Servicer and the Holders written
notice thereof promptly after the Trustee shall have knowledge
thereof; provided, however, any reasonable delay by the Trustee to
provide written notice to the Depositor, the Master Servicer and the
Holders promptly after the Trustee shall have obtained knowledge of a
claim shall not relieve the Trust Fund of its obligations to
indemnify the Trustee under this Section 6.11;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Depositor in
preparing such defense; and
(iii) notwithstanding anything to the contrary in this
Section 6.11, the Trust Fund shall not be liable for settlement of
any such claim by the Trustee entered into without the prior consent
of the Depositor, which consent shall not be unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense
under any environmental law.
Section 6.12. Fees and Expenses of Trustee. The Trustee shall be
entitled to the Trustee Fee (which shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust), to the
extent provided herein, and in addition, the Trustee shall be entitled to
receive, and is authorized to pay to itself the amount of income or gain
earned from the investment of funds in the Certificate Account.
Section 6.13. Collection of Monies. Except as otherwise expressly
provided in this Agreement, the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The Trustee shall hold
all such money and property received by it as part of the Trust Fund and shall
distribute it as provided in this Agreement. If the Trustee shall not have
timely received amounts to be remitted with respect to the Mortgage Loans from
the Master Servicer, the Trustee shall request the Master Servicer to make
such distribution as promptly as practicable or legally permitted. If the
Trustee shall subsequently receive any such amount, it may withdraw such
request.
Section 6.14. Events of Default; Trustee To Act; Appointment of
Successor. (a) The occurrence of any one or more of the following events shall
constitute an "Event of Default":
(i) Any failure by the Master Servicer to furnish the
Trustee the Mortgage Loan data sufficient to prepare the reports
described in Section 4.03(a) which continues unremedied for a period
of one Business Day after the date upon which written notice of such
failure shall have been given to such Master Servicer by the Trustee
or to such Master Servicer and the Trustee by the Holders of not less
than 25% of the Class Principal Amount (or Class Notional Amount) of
each Class of Certificates affected thereby; or
(ii) Any failure on the part of the Master Servicer duly
to observe or perform in any material respect any other of the
covenants or agreements on the part of such Master Servicer contained
in this Agreement which continues unremedied for a period of 30 days
(or 15 days, in the case of a failure to maintain any Insurance
Policy required to be maintained pursuant to this Agreement) after
the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to such Master Servicer by the
Trustee, or to such Master Servicer and the Trustee by the Holders of
not less than 25% of the Class Principal Amount (or Class Notional
Amount) of each Class of Certificates affected thereby; or
(iii) A decree or order of a court or agency or
supervisory authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Master Servicer, and such decree
or order shall have remained in force undischarged or unstayed for a
period of 60 days or any Rating Agency reduces or withdraws or
threatens to reduce or withdraw the rating of the Certificates
because of the financial condition or loan servicing capability of
such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment
of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities,
voluntary liquidation or similar proceedings of or relating to such
Master Servicer or of or relating to all or substantially all of its
property; or
(v) The Master Servicer shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall
dispose of all or substantially all of its assets, or consolidate
with or merge into another entity or shall permit another entity to
consolidate or merge into it, such that the resulting entity does not
meet the criteria for a successor servicer as specified in Section
9.27 hereof; or
(vii) If a representation or warranty set forth in
Section 9.14 hereof shall prove to be incorrect as of the time made
in any respect that materially and adversely affects the interests of
the Certificateholders, and the circumstance or condition in respect
of which such representation or warranty was incorrect shall not have
been eliminated or cured within 60 days after the date on which
written notice of such incorrect representation or warranty shall
have been given to the Master Servicer by the Trustee, or to the
Master Servicer and the Trustee by the Holders of not less than 25%
of the Aggregate Certificate Principal Amount of each Class of
Certificates; or
(viii)A sale or pledge of the any of the rights of the
Master Servicer hereunder or an assignment of this Agreement by the
Master Servicer or a delegation of the rights or duties of the Master
Servicer hereunder shall have occurred in any manner not otherwise
permitted hereunder and without the prior written consent of the
Trustee and Certificateholders holding more than 50% of the Class
Principal Amount (or Class Notional Amount) of each Class of
Certificates;
(ix) Any Servicer at any time is not either an FNMA- or
FHLMC- approved Seller/Servicer, and the Master Servicer has not
terminated the rights and obligations of such Servicer under the
Servicing Agreement and replaced such Servicer with an FNMA- or
FHLMC-approved servicer within 30 days of the absence of such
approval; or
(x) Any failure of the Master Servicer to remit to the
Trustee any payment required to be made to the Trustee for the
benefit of Certificateholders under the terms of this Agreement,
including any Advance, on any Deposit Date.
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the Master Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Principal Amount (or
Class Notional Amount) of each Class of Certificates, terminate all of the
rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. If an Event of Default described in
clause (x) of this Section 6.14 shall occur, then, in each and every case,
subject to applicable law, the Trustee, by notice in writing to the Master
Servicer, shall promptly terminate all of the rights and obligations of the
Master Servicer hereunder and in and to the Mortgage Loans and the proceeds
thereof. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer, and only in its
capacity as Master Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee
pursuant to and under the terms of this Agreement; and the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the defaulting
Master Servicer as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether
to complete the transfer and endorsement or assignment of the Mortgage Loans
and related documents or otherwise. The defaulting Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the defaulting
Master Servicer's responsibilities and rights hereunder as Master Servicer
including, without limitation, notifying Mortgagors of the assignment of the
master servicing function and providing the Trustee or its designee all
documents and records in electronic or other form reasonably requested by it
to enable the Trustee or its designee to assume the defaulting Master
Servicer's functions hereunder and the transfer to the Trustee for
administration by it of all amounts which shall at the time be or should have
been deposited by the defaulting Master Servicer in the Collection Account
maintained by such defaulting Master Servicer and any other account or fund
maintained with respect to the Certificates or thereafter received with
respect to the Mortgage Loans. The Master Servicer being terminated shall bear
all costs of a master servicing transfer, including but not limited to those
of the Trustee reasonably allocable to specific employees and overhead, legal
fees and expenses, accounting and financial consulting fees and expenses, and
costs of amending the Agreement, if necessary.
Notwithstanding the termination of its activities as Master Servicer,
each terminated Master Servicer shall continue to be entitled to reimbursement
to the extent provided in Section 4.02(i), (ii), (iii), (iv), (v), (vi),
(vii), (ix) and (xi) to the extent such reimbursement relates to the period
prior to such Master Servicer's termination.
If any Event of Default shall occur of which a Responsible Officer of
the Trustee has actual knowledge, the Trustee shall promptly notify the Rating
Agencies of the nature and extent of such Event of Default. The Trustee shall
immediately give written notice to the Master Servicer upon such Master
Servicer's failure to remit funds on the Deposit Date.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee
receives the resignation of the Master Servicer evidenced by an Opinion of
Counsel pursuant to Section 9.29, the Trustee, unless another master servicer
shall have been appointed, shall be the successor in all respects to the
Master Servicer in its capacity as such under this Agreement and the
transactions set forth or provided for herein and shall have all the rights
and powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Master Servicer
hereunder, including the obligation to make Advances; provided, however, that
any failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In addition, the Trustee
shall have no responsibility for any act or omission of the Master Servicer
prior to the issuance of any notice of termination and shall have no liability
relating to the representations and warranties of the Master Servicer set
forth in Section 9.14. In the Trustee's capacity as such successor, the
Trustee shall have the same limitations on liability herein granted to the
Master Servicer. As compensation therefor, the Trustee shall be entitled to
receive all compensation payable to the Master Servicer under this Agreement,
including the Master Servicing Fee.
(c) Notwithstanding the above, the Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than $15,000,000
and meeting such other standards for a successor master servicer as are set
forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer, like the Master Servicer. Any entity designated by the Trustee as a
successor master servicer may be an Affiliate of the Trustee; provided,
however, that, unless such Affiliate meets the net worth requirements and
other standards set forth herein for a successor master servicer, the Trustee,
in its individual capacity shall agree, at the time of such designation, to be
and remain liable to the Trust Fund for such Affiliate's actions and omissions
in performing its duties hereunder. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess
of that permitted to the Master Servicer hereunder. The Trustee and such
successor shall take such actions, consistent with this Agreement, as shall be
necessary to effectuate any such succession and may make other arrangements
with respect to the servicing to be conducted hereunder which are not
inconsistent herewith. The Master Servicer shall cooperate with the Trustee
and any successor master servicer in effecting the termination of the Master
Servicer's responsibilities and rights hereunder including, without
limitation, notifying Mortgagors of the assignment of the master servicing
functions and providing the Trustee and successor master servicer, as
applicable, all documents and records in electronic or other form reasonably
requested by it to enable it to assume the Master Servicer's functions
hereunder and the transfer to the Trustee or such successor master servicer,
as applicable, all amounts which shall at the time be or should have been
deposited by the Master Servicer in the Collection Account and any other
account or fund maintained with respect to the Certificates or thereafter be
received with respect to the Mortgage Loans. Neither the Trustee nor any other
successor master servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof caused by (i) the failure of the Master Servicer to
deliver, or any delay in delivering, cash, documents or records to it, (ii)
the failure of the Master Servicer to cooperate as required by this Agreement,
(iii) the failure of the Master Servicer to deliver the Mortgage Loan data to
the Trustee as required by this Agreement or (iv) restrictions imposed by any
regulatory authority having jurisdiction over the Master Servicer.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Event of
Default.
Section 6.16. Waiver of Defaults. 35% or more of the Aggregate Voting
Interests of Certificateholders may waive any default or Event of Default by
the Master Servicer in the performance of its obligations hereunder, except
that a default in the making of any required deposit to the Certificate
Account that would result in a failure of the Trustee to make any required
payment of principal of or interest on the Certificates may only be waived
with the consent of 100% of the affected Certificateholders. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 6.17. Notification to Holders. Upon termination of the Master
Servicer or appointment of a successor to the Master Servicer, in each case as
provided herein, the Trustee shall promptly mail notice thereof by first class
mail to the Certificateholders at their respective addresses appearing on the
Certificate Register. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to the Trustee, give written notice
thereof to Certificateholders, unless such Event of Default shall have been
cured or waived prior to the issuance of such notice and within such 45-day
period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
During Event of Default. Subject to the provisions of Section 8.01 hereof,
during the continuance of any Event of Default, Holders of Certificates
evidencing not less than 25% of the Class Principal Amount (or Class Notional
Amount) of each Class of Certificates 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, (i) the conducting or
defending of any administrative action or litigation hereunder or in relation
hereto and (ii) the terminating of the Master Servicer or any successor master
servicer from its rights and duties as master servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the cost, expenses and liabilities which may be incurred
therein or thereby; and, provided further, that, subject to the provisions of
Section 8.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee, in accordance with an Opinion of Counsel, 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 6.19. Action Upon Certain Failures of the Master Servicer and
Upon Event of Default. In the event that a Responsible Officer of the Trustee
shall have actual knowledge of any action or inaction of the Master Servicer
that would become an Event of Default upon the Master Servicer's failure to
remedy the same after notice, the Trustee shall give notice thereof to the
Master Servicer. For all purposes of this Agreement, in the absence of actual
knowledge by a Responsible Officer of the Trustee, the Trustee shall not be
deemed to have knowledge of any failure of the Master Servicer or any other
Event of Default unless notified in writing by the Depositor, the Master
Servicer or a Certificateholder.
Section 6.20. Preparation of Tax Returns and Other Reports. (a) The
Trustee shall prepare or cause to be prepared on behalf of the Trust Fund,
based upon information calculated in accordance with this Agreement pursuant
to instructions given by the Depositor, and the Trustee shall file, federal
tax returns and appropriate state income tax returns and such other returns as
may be required by applicable law relating to the Trust Fund, and the Trustee
shall forward copies to the Depositor of all such returns and Form 1099
information and such other information within the control of the Trustee as
the Depositor may reasonably request in writing, and shall forward to each
Certificateholder such forms and furnish such information within the control
of the Trustee as are required by the Code and the REMIC Provisions to be
furnished to them, and will prepare and file annual reports required by
applicable state authorities, will file copies of this Agreement with the
appropriate state authorities as may be required by applicable law, and will
prepare and disseminate to Certificateholders Form 1099 (or otherwise furnish
information within the control of the Trustee) to the extent required by
applicable law. The Master Servicer will indemnify the Trustee for any
liability of or assessment against the Trustee resulting from any error in any
of such tax or information returns directly resulting from errors in the
information provided by such Master Servicer (other than information that is
derived solely from information provided by the Servicer).
(b) The Trustee shall prepare and file with the Internal Revenue
Service ("IRS"), on behalf of the Trust Fund, an application on IRS Form SS-4.
The Trustee, upon receipt from the IRS of the Notice of Taxpayer
Identification Number Assigned, shall promptly forward a copy of such notice
to the Master Servicer and the Depositor.
(c) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K and thereafter the Trustee will prepare or cause to
be prepared Form 10-Ks and Form 10-Qs (if necessary), or monthly current
reports on Form 8-K, on behalf of the Trust Fund, as may be required by
applicable law, for filing with the Securities and Exchange Commission (the
"SEC"), and the Trustee will sign each such report on behalf of the Trust. The
Trustee will forward a copy of each such report to the Depositor promptly
after such report has been filed with the SEC. The Trustee agrees to use its
best commercial efforts to seek to terminate such filing obligation after the
period during which such filings are required under the Securities Exchange
Act of 1934. Promptly after filing a Form 15 or other applicable form with the
SEC in connection with such termination, the Trustee shall deliver to the
Depositor a copy of such form together with copies of confirmations of receipt
by the SEC of each report filed therewith on behalf of the Trust Fund.
ARTICLE VII
PURCHASE AND TERMINATION
OF THE TRUST FUND
Section 7.01. Termination of Trust Fund Upon Repurchase or
Liquidation of All Mortgage Loans. (a) The respective obligations and
responsibilities of the Trustee and the Master Servicer created hereby (other
than the obligation of the Trustee to make payments to Certificateholders as
set forth in Section 7.02, the obligation of the Master Servicer to make a
final remittance to the Trustee for deposit into the Certificate Account
pursuant to Section 4.01 and the obligations of the Master Servicer to the
Trustee pursuant to Sections 9.10 and 9.14), shall terminate on the earlier of
(i) the final payment or other liquidation of the last Mortgage Loan remaining
in the Trust Fund and the disposition of all REO Property and (ii) the sale of
all remaining property held by the Trust Fund in accordance with Section
7.01(b) or Section 7.01(c); provided, however, that in no event shall the
Trust Fund created hereby continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late
Ambassador of the United States to the Court of St. James's, living on the
date hereof. Any termination of the Trust Fund shall be carried out in such a
manner so that the termination of each REMIC included therein shall qualify as
a "qualified liquidation" under the REMIC Provisions.
(b) On the Distribution Date occurring in September 2002 (the "Pool 1
Call Date"), and on each Distribution Date at three month intervals
thereafter, the Holder of the Class 1-A2 Certificate may, upon thirty (30)
Business Days prior written notice to the Trustee, purchase the Mortgage
Loans, REO Property and any other property remaining in Pool 1 (the "Pool 1
Call Option"). On the Distribution Date occurring in October 2004 (the "Pool 2
Call Date"), and at three months intervals thereafter, the holder of the Class
2-A2 Certificate may, upon thirty (30) Business Days prior written to the
Trustee, purchase the Mortgage Loans, REO Property and any other property
remaining in Pool 2 (the "Pool 2 Call Option"). The purchase price of the Pool
1 Mortgage Loans and related property (the "Pool 1 Purchase Price") or the
purchase price of the Pool 2 Mortgage Loans and related property (the "Pool 2
Purchase Price"), as applicable, shall be the sum of: (i) 100% of the unpaid
principal balance of each Mortgage Loan in the related Mortgage Pool on the
day of such purchase plus interest accrued thereon at the applicable Mortgage
Rate with respect to any Mortgage Loan to the Due Date in the Due Period
immediately preceding the related Distribution Date to the date of such
repurchase, (ii) the fair market value of any REO Property and any other
property in the related Mortgage Pool, such fair market value to be determined
by an appraiser or appraisers appointed by the Master Servicer with the
consent of the Trustee and (iii) any unreimbursed Servicing Advances with
respect to each Mortgage Loan in the related Mortgage Pool. The Trust Fund
shall be terminated upon the later to occur of (i) the Class 1-A2
Certificateholder's exercise of the Pool 1 Call Option or (ii) the Class A2
Certificateholder's exercise of the Pool 2 Call Option.
(c) On any Distribution Date occurring (i) after the Pool 2 Call Date
and (ii) after the date on which the aggregate Scheduled Principal Balance of
the Mortgage Loans is less than 10% of the Cut-off Date Aggregate Principal
Balance, the Depositor may, upon written direction to the Trustee, cause the
Trustee to sell (or arrange for the sale of) the assets of the Trust Fund. The
property of the Trust Fund shall be sold at a price (the "Termination Price")
equal to: (i) 100% of the unpaid principal balance of each Mortgage Loan on
the day of such purchase plus interest accrued thereon at the applicable
Mortgage Rate with respect to any Mortgage Loan to the Due Date in the Due
Period immediately preceding the related Distribution Date to the date of such
repurchase, (ii) the fair market value of any REO Property and any other
property held by any REMIC, such fair market value to be determined by an
appraiser or appraisers appointed by the Master Servicer with the consent of
the Trustee and (iii) any unreimbursed Servicing Advances with respect to each
Mortgage Loan.
Section 7.02. Procedure Upon Termination of Trust Fund. (a) Notice of
any termination pursuant to the provisions of Section 7.01, specifying the
Distribution Date upon which the final distribution shall be made, shall be
given promptly by the Trustee by first class mail to Certificateholders mailed
(x) no later than five Business Days after the Trustee has received notice of
the latest to occur of (i) the Holder of the Class 1-A2 Certificate notifying
the Trustee of its intent to exercise its Pool 1 Call Option or (ii) the
Holder of the Class 2-A2 Certificate notifying the Trustee of its intent to
exercise its Pool 2 Call Option, (y) no later than five Business Days after
the Trustee has received notice from the Depositor of its intent to exercise
its right to cause the termination of the Trust Fund pursuant to Section
7.01(c) or (z) upon the final payment or other liquidation of the last
Mortgage Loan or REO Property in the Trust Fund. Such notice shall specify (A)
the Distribution Date upon which final distribution on the Certificates of all
amounts required to be distributed to Certificateholders pursuant to Section
5.02 will be made upon presentation and surrender of the Certificates at the
Corporate Trust Office, and (B) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distribution being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified. The Trustee shall give such notice to the Master
Servicer and the Certificate Registrar at the time such notice is given to
Holders of the Certificates. Upon any such termination, the duties of the
Certificate Registrar with respect to the Certificates shall terminate and the
Trustee shall terminate, or request the Master Servicer to terminate, the
Collection Account it maintains, the Certificate Account and any other account
or fund maintained with respect to the Certificates, subject to the Trustee's
obligation hereunder to hold all amounts payable to Certificateholders in
trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to
contact the remaining Certificateholders concerning surrender of such
Certificates, and the cost thereof shall be paid out of the amounts
distributable to such Holders. If within two years after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee
shall, subject to applicable state law relating to escheatment, hold all
amounts distributable to such Holders for the benefit of such Holders. No
interest shall accrue on any amount held by the Trustee and not distributed to
a Certificateholder due to such Certificateholder's failure to surrender its
Certificate(s) for payment of the final distribution thereon in accordance
with this Section.
(c) Any reasonable expenses incurred by the Trustee in connection
with any termination or liquidation of the Trust Fund shall be paid from
proceeds received from the liquidation of the Trust Fund.
Section 7.03. Procedure Upon Exercise of the Pool 1 Call Option or
Pool 2 Call Option. If only the Pool 1 Call Option or the Pool 2 Call Option
is exercised and the other such option has not been exercised, then the
Trustee shall retire any outstanding Certificates of the related Certificate
Group; provided that the Class R Certificate shall remain outstanding until
the Trust Fund is terminated as provided herein. The Trustee shall provide
notice to the Certificateholders of the related Certificate Group in the same
manner and shall follow the same procedures with respect to such
Certificateholders as it would in the case of a termination of the Trust Fund
under Section 7.02.
Section 7.04. Additional Requirements under the REMIC Provisions. (a)
If the Class 1-A2 Certificateholder exercises the Pool 1 Call Option and the
Pool 2 Call Option remains unexercised, then the Trustee shall treat the sale
of the Pool 1 Mortgage Loans, REO Property, and any other property remaining
in Pool 1 and the distribution of the proceeds of such sale to the
Certificateholders as the liquidation of the Pool 1 Lower Tier REMIC. The
Trustee shall prepare or cause to be prepared a final federal income tax
return for the Pool 1 Lower Tier REMIC and shall attach a statement to such
final tax return indicating that the statement is made pursuant to Treas. Reg.
ss. 1.860F-1. The statement shall provide that the first day in the 90-day
liquidation period is the day immediately preceding the day on which the of
the Pool 1 Mortgage Loans, REO Property, and any other property in Pool 1 were
sold to the Class 1-A2 Certificateholder pursuant to the Pool 1 Call Option.
(b) If the Class 2-A2 Certificateholder exercises the Pool 2 Call
Option and the Pool 1 Call Option remains unexercised, then the Trustee shall
treat the sale of the Pool 2 Mortgage Loans, REO Property, and any other
property remaining in Pool 2 and the distribution of the proceeds of such sale
to the Certificateholders as the liquidation of the Pool 2 Lower Tier REMIC.
The Trustee shall prepare, or cause to be prepared, and file a final federal
income tax return for the Pool 2 Lower Tier REMIC and shall attach a statement
to such final tax return indicating that the statement is made pursuant to
Treas. Reg. ss. 1.860F-1. The statement shall provide that the first day in
the 90-day liquidation period is the day immediately preceding the day on
which the of the Pool 2 Mortgage Loans, REO Property, and any other property
in Pool 2 were sold to the Class 2-A2 Certificateholder pursuant to the Pool 2
Call Option.
(c) The Trustee shall treat the termination of the Trust Fund under
Section 7.01 as the liquidation of any REMIC created under this Agreement that
had not previously been liquidated. The Trustee shall prepare, or cause to be
prepared, and file a final federal income tax return for each such REMIC and
shall attach a statement to such final return stating indicating that the
statement is made pursuant to Treas. Reg. ss. 1.860F-1. The statement shall
provide that the first day in the 90-day liquidation period is the day
immediately preceding the day on which the assets of the Trust Fund were sold
pursuant to Section 7.01 of the Agreement.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders. (a) The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or this Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or
proceeding in any court for a partition or winding up of this Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder,
shall have any right to vote or in any manner otherwise control the Master
Servicer or the operation and management of the Trust Fund, or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in
the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association,
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates evidencing not less than 25% of the
Class Principal Amount (or Class Notional Amount) of Certificates of each
Class 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
cost, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for sixty days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request has been
given such Trustee during such sixty-day period by such Certificateholders; 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 of any provision of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to
any other such Holder, or to enforce any right under this Agreement, except in
the manner herein provided and for the benefit of all Certificateholders. For
the protection and enforcement of the provisions of this Section, each and
every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 8.02. Access to List of Holders. (a) If the Trustee is not
acting as Certificate Registrar, the Certificate Registrar will furnish or
cause to be furnished to the Trustee, within fifteen days after receipt by the
Certificate Registrar 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 of each Class as of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Trustee, and such
application states that the Applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Certificates and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Trustee shall, within five Business
Days after the receipt of such application, afford such Applicants reasonable
access during the normal business hours of the Trustee to the most recent list
of Certificateholders held by the Trustee or shall, as an alternative, send,
at the Applicants' expense, the written communication proffered by the
Applicants to all Certificateholders at their addresses as they appear in the
Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Certificate Registrar and the Trustee that neither the
Depositor, the Master Servicer, the Certificate Registrar nor the Trustee
shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 8.03. Acts of Holders of Certificates. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by Holders or Certificate
Owner, if the Holder is a Clearing Agency, may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where expressly
required herein, to the Master Servicer. Such instrument or instruments (as
the action embodies therein and evidenced thereby) are herein sometimes
referred to as an "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agents shall be sufficient for any purpose of this Agreement and conclusive in
favor of the Trustee and Master Servicer, if made in the manner provided in
this Section. Each of the Trustee and Master Servicer shall promptly notify
the other of receipt of any such instrument by it, and shall promptly forward
a copy of such instrument to the other.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership,
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the individual executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Master Servicer, nor the
Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Master Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer. The Certificateholders,
by their purchase and acceptance of the Certificates, appoint Aurora Loan
Services Inc., as Master Servicer. For and on behalf of the Depositor, the
Trustee and the Certificateholders, the Master Servicer shall master service
the Mortgage Loans in accordance with the provisions of this Agreement and the
provisions of the Servicing Agreement.
Section 9.02. Master Servicer Fidelity Bond and Master Servicer
Errors and Omissions Insurance Policy. (a) The Master Servicer, at its
expense, shall maintain in effect a Fidelity Bond and an Errors and Omissions
Insurance Policy, affording coverage with respect to all directors, officers,
employees and other Persons acting on such Master Servicer's behalf, and
covering errors and omissions in the performance of the Master Servicer's
obligations hereunder. The Errors and Omissions Insurance Policy and the
Fidelity Bond shall be in such form and amount that would meet the
requirements of FNMA or FHLMC if it were the purchaser of the Mortgage Loans.
The Master Servicer shall (i) require the Servicer to maintain an Errors and
Omissions Insurance Policy and a Fidelity Bond in accordance with the
provisions of the Servicing Agreement, (ii) cause the Servicer to provide to
the Master Servicer certificates evidencing that such policy and bond is in
effect and to furnish to the Master Servicer any notice of cancellation,
non-renewal or modification of the policy or bond received by it, as and to
the extent provided in the Servicing Agreement, and (iii) furnish copies of
the certificates and notices referred to in clause (ii) to the Trustee upon
its request. The Fidelity Bond and Errors and Omissions Insurance Policy may
be obtained and maintained in blanket form.
(b) The Master Servicer shall promptly report to the Trustee any
material changes that may occur in the Master Servicer Fidelity Bond or the
Master Servicer Errors and Omissions Insurance Policy and shall furnish to the
Trustee, on request, certificates evidencing that such bond and insurance
policy are in full force and effect. The Master Servicer shall promptly report
to the Trustee all cases of embezzlement or fraud, if such events involve
funds relating to the Mortgage Loans. The total losses, regardless of whether
claims are filed with the applicable insurer or surety, shall be disclosed in
such reports together with the amount of such losses covered by insurance. If
a bond or insurance claim report is filed with any of such bonding companies
or insurers, the Master Servicer shall promptly furnish a copy of such report
to the Trustee. Any amounts relating to the Mortgage Loans collected by the
Master Servicer under any such bond or policy shall be promptly remitted by
the Master Servicer to the Trustee for deposit into the Certificate Account.
Any amounts relating to the Mortgage Loans collected by the Servicer under any
such bond or policy shall be remitted to the Master Servicer to the extent
provided in the Servicing Agreement.
Section 9.03. Master Servicer's Financial Statements and Related
Information. For each year this Agreement is in effect, the Master Servicer
shall submit to the Trustee, each Rating Agency and the Depositor a copy of
its annual unaudited financial statements on or prior to May 31 of each year.
Such financial statements shall include a balance sheet, income statement,
statement of retained earnings, statement of additional paid-in capital,
statement of changes in financial position and all related notes and schedules
and shall be in comparative form, certified by a nationally recognized firm of
Independent Accountants to the effect that such statements were examined and
prepared in accordance with generally accepted accounting principles applied
on a basis consistent with that of the preceding year.
Section 9.04. Power to Act; Procedures. (a) The Master Servicer shall
master service the Mortgage Loans and shall have full power and authority,
subject to the REMIC Provisions and the provisions of Article X hereof, and
the Servicer shall have full power and authority (to the extent provided in
the Servicing Agreement) to do any and all things that it may deem necessary
or desirable in connection with the servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the Servicing
Agreement, as applicable; provided that the Master Servicer shall not take, or
knowingly permit the Servicer to take, any action that is inconsistent with or
prejudices the interests of the Trust Fund or the Certificateholders in any
Mortgage Loan or the rights and interests of the Depositor, the Trustee and
the Certificateholders under this Agreement. The Master Servicer shall
represent and protect the interests of the Trust Fund in the same manner as it
protects its own interests in mortgage loans in its own portfolio in any
claim, proceeding or litigation regarding a Mortgage Loan and shall not make
or permit any Servicer to make any modification, waiver or amendment of any
term of any Mortgage Loan that would cause the Trust Fund to fail to qualify
as a REMIC or result in the imposition of any tax under Section 860F(a) or
Section 860G(d) of the Code. Without limiting the generality of the foregoing,
the Master Servicer in its own name or in the name of the Servicer, and the
Servicer, to the extent such authority is delegated to the Servicer by the
Master Servicer under the Servicing Agreement, is hereby authorized and
empowered by the Trustee when the Master Servicer or the Servicer, as the case
may be, believes it appropriate in its best judgment and in accordance with
Accepted Servicing Practices and the Servicing Agreement, to execute and
deliver, on behalf of itself and the Certificateholders, the Trustee or any of
them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties.
The Trustee shall furnish the Master Servicer, upon request, with any powers
of attorney empowering the Master Servicer or the Servicer to execute and
deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to
the Mortgage Loans or the Mortgaged Property, in accordance with the Servicing
Agreement and this Agreement, and the Trustee shall execute and deliver such
other documents, as the Master Servicer may request, necessary or appropriate
to enable the Master Servicer to master service and administer the Mortgage
Loans and carry out its duties hereunder, in each case in accordance with
Accepted Servicing Practices (and the Trustee shall have no liability for
misuse of any such powers of attorney by the Master Servicer or the Servicer).
If the Master Servicer or the Trustee has been advised that it is likely that
the laws of the state in which action is to be taken prohibit such action if
taken in the name of the Trustee or that the Trustee would be adversely
affected under the "doing business" or tax laws of such state if such action
is taken in its name, then upon request of the Trustee, the Master Servicer
shall join with the Trustee in the appointment of a co-trustee pursuant to
Section 6.09 hereof. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in those
instances where it is taking action in the name of the Trustee, be deemed to
be the agent of the Trustee.
(b) In master servicing and administering the Mortgage Loans, the
Master Servicer shall employ procedures, and shall cause the Servicer to
employ procedures (including, but not limited to, collection procedures),
consistent with the Servicing Agreement. Consistent with the foregoing, the
Master Servicer may, and may permit any Servicer to, in its discretion (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due
dates for payments due on a Mortgage Note for a period not greater than 120
days; provided, however, that the maturity of any Mortgage Loan shall not be
extended past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any extension
described in clause (ii) above, the Master Servicer shall make or cause to be
made Advances on the related Mortgage Loan in accordance with the provisions
of Section 5.04 on the basis of the amortization schedule of such Mortgage
Loan without modification thereof by reason of such extension. Notwithstanding
anything to the contrary in this Agreement, the Master Servicer shall not,
unless default by the related Mortgagor is, in the reasonable judgment of the
Master Servicer, imminent, permit any modification, waiver or amendment of any
material term of any Mortgage Loan (including but not limited to the interest
rate, the principal balance, the amortization schedule, or any other term
affecting the amount or timing of payments on the Mortgage Loan or the
collateral therefor) unless the Master Servicer shall have provided or caused
to be provided to the Trustee an Opinion of Counsel in writing to the effect
that such modification, waiver or amendment would not be treated as giving
rise to a new debt instrument for federal income tax purposes and would not
adversely affect the status of the REMIC.
Section 9.05. Servicing Agreement Between the Master Servicer and the
Servicer; Enforcement of Servicer's Obligations. (a) The Servicing Agreement
requires the Servicer to service the Mortgage Loans in accordance with the
provisions thereof. References in this Agreement to actions taken or to be
taken by the Master Servicer include actions taken or to be taken by the
Servicer on behalf of the Master Servicer. Any fees and other amounts payable
to the Servicer shall be deducted from amounts remitted to the Master Servicer
by the Servicer and shall not be an obligation of the Trust.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Servicer under the
Servicing Agreement, and shall, in the event that the Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
terminate the rights and obligations of the Servicer thereunder and either act
as servicer of the related Mortgage Loans or enter into a Servicing Agreement
with a successor Servicer. Such enforcement, including, without limitation,
the legal prosecution of claims, termination of the Servicing Agreement and
the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer, in its good
faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at
its own expense, and shall be reimbursed therefor initially only (i) from a
general recovery resulting from such enforcement only to the extent, if any,
that such recovery exceeds all amounts due in respect of the related Mortgage
Loans or (ii) from a specific recovery of costs, expenses or attorneys' fees
against the party against whom such enforcement is directed, and then, to the
extent that such amounts are insufficient to reimburse the Master Servicer for
the costs of such enforcement, (iii) from the Collection Account.
Section 9.06. Collection of Taxes, Assessments and Similar Items. (a)
To the extent provided in the Servicing Agreement, the Master Servicer shall
cause the Servicer to establish and maintain one or more custodial accounts at
a depository institution (which may be a depository institution with which the
Master Servicer or the Servicer establishes accounts in the ordinary course of
its servicing activities), the accounts of which are insured to the maximum
extent permitted by the FDIC (each, an "Escrow Account") and shall deposit
therein any collections of amounts received with respect to amounts due for
taxes, assessments, water rates, Standard Hazard Insurance Policy premiums or
any comparable items for the account of the Mortgagors. Withdrawals from any
Escrow Account may be made (to the extent amounts have been escrowed for such
purpose) only in accordance with the Servicing Agreement. The Servicer shall
be entitled to all investment income not required to be paid to Mortgagors on
any Escrow Account maintained by the Servicer. The Master Servicer shall make
(or cause to be made) to the extent provided in the Servicing Agreement
advances to the extent necessary in order to effect timely payment of taxes,
water rates, assessments, Standard Hazard Insurance Policy premiums or
comparable items in connection with the related Mortgage Loan (to the extent
that the Mortgagor is required, but fails, to pay such items), provided that
it has determined that the funds so advanced are recoverable from escrow
payments, reimbursement pursuant to Section 4.02(v) or otherwise.
(b) Costs incurred by the Master Servicer or by the Servicer in
effecting the timely payment of taxes and assessments on the properties
subject to the Mortgage Loans may be added to the amount owing under the
related Mortgage Note where the terms of the Mortgage Note so permit;
provided, however, that the addition of any such cost shall not be taken into
account for purposes of calculating the distributions to be made to
Certificateholders. Such costs, to the extent that they are unanticipated,
extraordinary costs, and not ordinary or routine costs shall be recoverable by
the Master Servicer pursuant to Section 4.02(v).
Section 9.07. Termination of Servicing Agreements; Successor
Servicers. (a) The Master Servicer shall be entitled to terminate the rights
and obligations of the Servicer under the Servicing Agreement in accordance
with the terms and conditions of such Servicing Agreement and without any
limitation by virtue of this Agreement; provided, however, that in the event
of termination of the Servicing Agreement by the Master Servicer or the
Servicer, the Master Servicer shall either act as Servicer of the related
Mortgage Loans, or enter into a Servicing Agreement with a successor Servicer.
(b) If the Master Servicer acts as Servicer, it will not assume
liability for the representations and warranties of the Servicer, if any, that
it replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties
made by the terminated Servicer in respect of the related Mortgage Loans, and
in the event of any such assumption by the successor Servicer, the Trustee or
the Master Servicer, as applicable, may, in the exercise of its business
judgment, release the terminated Servicer from liability for such
representations and warranties.
Section 9.08. Master Servicer Liable for Enforcement. Notwithstanding
the Servicing Agreement, the Master Servicer shall remain obligated and liable
to the Trustee and the Certificateholders in accordance with the provisions of
this Agreement, to the extent of its obligations hereunder, without diminution
of such obligation or liability by virtue of such Servicing Agreement or
arrangement. The Master Servicer shall use commercially reasonable efforts to
ensure that the Mortgage Loans are serviced in accordance with the provisions
of this Agreement and shall use commercially reasonable efforts to enforce the
provisions of the Servicing Agreement for the benefit of the
Certificateholders. The Master Servicer shall be entitled to enter into any
agreement with the Servicer for indemnification of the Master Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification. Except as expressly set forth herein, the Master Servicer
shall have no liability for the acts or omissions of the Servicer in the
performance by the Servicer of its obligations under the Servicing Agreement.
Section 9.09. No Contractual Relationship Between Servicers and
Trustee or Depositor. Any Servicing Agreement that may be entered into and any
other transactions or services relating to the Mortgage Loans involving a
Servicer in its capacity as such and not as an originator shall be deemed to
be between such Servicer, the Seller and the Master Servicer, and the Trustee
and the Depositor shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to such
Servicer except as set forth in Section 9.10 hereof.
Section 9.10. Assumption of Servicing Agreement by Trustee. (a) In
the event the Master Servicer shall for any reason no longer be the Master
Servicer (including by reason of any Event of Default under this Agreement),
the Trustee shall thereupon assume all of the rights and obligations of such
Master Servicer hereunder and under the Servicing Agreement entered into with
respect to the Mortgage Loans. The Trustee, its designee or any successor
master servicer appointed by the Trustee shall be deemed to have assumed all
of the Master Servicer's interest herein and therein to the same extent as if
such Servicing Agreement had been assigned to the assuming party, except that
the Master Servicer shall not thereby be relieved of any liability or
obligations of the Master Servicer under such Servicing Agreement accruing
prior to its replacement as Master Servicer, and shall be liable to the
Trustee, and hereby agrees to indemnify and hold harmless the Trustee from and
against all costs, damages, expenses and liabilities (including reasonable
attorneys' fees) incurred by the Trustee as a result of such liability or
obligations of the Master Servicer and in connection with the Trustee's
assumption (but not its performance, except to the extent that costs or
liability of the Trustee are created or increased as a result of negligent or
wrongful acts or omissions of the Master Servicer prior to its replacement as
Master Servicer) of the Master Servicer's obligations, duties or
responsibilities thereunder; provided that the Master Servicer shall not
indemnify or hold harmless the Trustee against negligent or wrongful acts or
omissions of the Trustee.
(b) The Master Servicer that has been terminated shall, upon request
of the Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to the Servicing Agreement
and the related Mortgage Loans and an accounting of amounts collected and held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of each Servicing Agreement to the assuming party.
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements. To the
extent provided in the Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicer to enforce such clauses in accordance with the Servicing Agreement.
If applicable law prohibits the enforcement of a due-on-sale clause or such
clause is otherwise not enforced in accordance with the Servicing Agreement,
and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may
be released from liability in accordance with the Servicing Agreement.
Section 9.12. Release of Mortgage Files. (a) Upon becoming aware of
the payment in full of any Mortgage Loan, or the receipt by the Master
Servicer of a notification that payment in full has been escrowed in a manner
customary for such purposes for payment to Certificateholders on the next
Distribution Date, the Master Servicer will, or will cause the Servicer to,
promptly notify the Trustee (or the applicable Custodian) by a certification
(which certification shall include a statement to the effect that all amounts
received in connection with such payment that are required to be deposited in
the Collection Account maintained by the Master Servicer pursuant to Section
4.01 have been or will be so deposited) of a Servicing Officer and shall
request the Trustee or the applicable Custodian, to deliver to the Servicer
the related Mortgage File. Upon receipt of such certification and request, the
Trustee or the applicable Custodian (with the consent, and at the direction of
the Trustee, which consent and discretion is hereby given), shall promptly
release the related Mortgage File to the Servicer and the Trustee shall have
no further responsibility with regard to such Mortgage File. Upon any such
payment in full, the Master Servicer is authorized, and the Servicer, to the
extent such authority is delegated to the Servicer by the Master Servicer
under the Servicing Agreement, is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan,
an instrument of satisfaction (or assignment of mortgage without recourse)
regarding the Mortgaged Property subject to the Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the
Person or Persons entitled thereto against receipt therefor of such payment,
it being understood and agreed that no expenses incurred in connection with
such instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with Accepted Servicing
Practices and the Servicing Agreement, the Trustee shall execute such
documents as shall be prepared and furnished to the Trustee by the Master
Servicer, or by the Servicer (in form reasonably acceptable to the Trustee)
and as are necessary to the prosecution of any such proceedings. The Trustee
or the Custodian, shall, upon request of the Master Servicer, or of the
Servicer, and delivery to the Trustee or the applicable Custodian, of a trust
receipt signed by a Servicing Officer substantially in the form of Exhibit C,
release the related Mortgage File held in its possession or control to the
Master Servicer (or the Servicer). Such trust receipt shall obligate the
Master Servicer or Servicer to return the Mortgage File to the Trustee or
Custodian, as applicable, when the need therefor by the Master Servicer or
Servicer no longer exists unless the Mortgage Loan shall be liquidated, in
which case, upon receipt of a certificate of a Servicing Officer similar to
that herein above specified, the trust receipt shall be released by the
Trustee or the Custodian, as applicable, to the Master Servicer (or the
Servicer).
Section 9.13. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee. (a) The Master Servicer shall transmit, or
cause the Servicer to transmit, to the Trustee such documents and instruments
coming into the possession of the Master Servicer or the Servicer from time to
time as are required by the terms hereof to be delivered to the Trustee. Any
funds received by the Master Servicer or by the Servicer in respect of any
Mortgage Loan or which otherwise are collected by the Master Servicer or by
the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Master Servicer's right to retain or
withdraw from the Collection Account the Master Servicing Fee and other
amounts provided in this Agreement, and to the right of the Servicer to retain
its Servicing Fee as provided in the Servicing Agreement. The Master Servicer
shall, and shall (to the extent provided in the Servicing Agreement) cause the
Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Trustee, its agents and accountants at any time upon
reasonable request and during normal business hours, and to Certificateholders
that are savings and loan associations, banks or insurance companies, the
Office of Thrift Supervision, the FDIC and the supervisory agents and
examiners of such Office and Corporation or examiners of any other federal or
state banking or insurance regulatory authority if so required by applicable
regulations of the Office of Thrift Supervision or other regulatory authority,
such access to be afforded without charge but only upon reasonable request in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request the Master Servicer shall not
be responsible for determining the sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, or the Servicer, in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master
Servicer, or by the Servicer, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee; provided, however, that the Master Servicer and the Servicer
shall be entitled to setoff against, and deduct from, any such funds any
amounts that are properly due and payable to the Master Servicer or the
Servicer under this Agreement or the Servicing Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with
the execution of this Agreement, the Trustee shall own or, to the extent that
a court of competent jurisdiction shall deem the conveyance of the Mortgage
Loans from the Seller to the Depositor not to constitute a sale, the Trustee
shall have a security interest in the Mortgage Loans and in all Mortgage Files
representing such Mortgage Loans and in all funds now or hereafter held by, or
under the control of, the Servicer or the Master Servicer that are collected
by the Servicer or the Master Servicer in connection with the Mortgage Loans,
whether as scheduled installments of principal and interest or as full or
partial prepayments of principal or interest or as Liquidation Proceeds or
Insurance Proceeds or otherwise, and in all proceeds of the foregoing and
proceeds of proceeds (but excluding any fee or other amounts to which the
Servicer is entitled under the Servicing Agreement, or the Master Servicer or
the Depositor is entitled to hereunder); and the Master Servicer agrees that
so long as the Mortgage Loans are assigned to and held by the Trustee, all
documents or instruments constituting part of the Mortgage Files, and such
funds relating to the Mortgage Loans which come into the possession or custody
of, or which are subject to the control of, the Master Servicer or the
Servicer shall be held by the Master Servicer or the Servicer for and on
behalf of the Trustee as the Trustee's agent and bailee for purposes of
perfecting the Trustee's security interest therein as provided by the
applicable Uniform Commercial Code or other laws.
(d) The Master Servicer agrees that it shall not, and shall not
authorize the Servicer to, create, incur or subject any Mortgage Loans, or any
funds that are deposited in any custodial account, Escrow Account or the
Collection Account, or any funds that otherwise are or may become due or
payable to the Trustee, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, nor assert by legal action or
otherwise any claim or right of setoff against any Mortgage Loan or any funds
collected on, or in connection with, a Mortgage Loan.
Section 9.14. Representations and Warranties of the Master Servicer.
(a) The Master Servicer hereby represents and warrants to the Depositor and
the Trustee, for the benefit of the Certificateholders, as of the Closing Date
that:
(i) it is validly existing and in good standing under the
jurisdiction of its formation, and as Master Servicer has full power
and authority to transact any and all business contemplated by this
Agreement and to execute, deliver and comply with its obligations
under the terms of this Agreement, the execution, delivery and
performance of which have been duly authorized by all necessary
corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the
Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's charter or
bylaws, (B) violate any law or regulation or any administrative
decree or order to which it is subject or (C) constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Master Servicer
is a party or by which it is bound or to which any of its assets are
subject, which violation, default or breach would materially and
adversely affect the Master Servicer's ability to perform its
obligations under this Agreement;
(iii) this Agreement constitutes, assuming due
authorization, execution and delivery hereof by the other respective
parties hereto, a legal, valid and binding obligation of the Master
Servicer, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement
of creditors' rights in general, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding
in equity or at law);
(iv) the Master Servicer is not in default with respect
to any order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency to the extent that
any such default would materially and adversely affect its
performance hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and
adversely affect its ability as Master Servicer to perform its
obligations under this Agreement or that requires the consent of any
third person to the execution of this Agreement or the performance by
the Master Servicer of its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the
Master Servicer's knowledge, threatened against the Master Servicer
which would prohibit its entering into this Agreement or performing
its obligations under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the
primary business of which is the servicing of conventional
residential mortgage loans, is an FNMA- and FHLMC- approved
seller/servicer;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Master Servicer of or compliance by
the Master Servicer with this Agreement or the consummation of the
transactions contemplated by this Agreement, except for such
consents, approvals, authorizations and orders (if any) as have been
obtained;
(ix) the consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Master
Servicer; and
(x) the Master Servicer has obtained an Errors and
Omissions Insurance Policy and a Fidelity Bond in accordance with
Section 9.02, each of which is in full force and effect, and each of
which provides at least such coverage as is required hereunder.
(b) It is understood and agreed that the representations and
warranties set forth in this Section 9.14 shall survive the execution and
delivery of this Agreement. The Master Servicer shall indemnify the Depositor
and the Trustee and hold them harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on
or grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in Section 9.14(a). Notwithstanding
anything in this Agreement to the contrary, the Master Servicer shall not be
liable for special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits). It is understood and
agreed that the enforcement of the obligation of the Master Servicer set forth
in this Section to indemnify the Depositor and the Trustee as provided in this
Section constitutes the sole remedy (other than as set forth in Section 6.14)
of the Depositor and the Trustee, respecting a breach of the foregoing
representations and warranties. Such indemnification shall survive any
termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor,
the Master Servicer or the Trustee or notice thereof by any one of such
parties to the other parties.
(c) It is understood and agreed that the representations and
warranties of the Depositor set forth in Sections 2.03(a) through (f) shall
survive the execution and delivery of this Agreement. The Depositor shall
indemnify the Master Servicer and hold it harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Depositor's representations and warranties contained in Sections 2.03(a)
through (f) hereof. It is understood and agreed that the enforcement of the
obligation of the Depositor set forth in this Section to indemnify the Master
Servicer as provided in this Section constitutes the sole remedy of the Master
Servicer respecting a breach by the Depositor of the representations and
warranties in Sections 2.03(a) through (f) hereof.
Any cause of action against the Depositor relating to or arising out
of the breach of the representations and warranties made in Sections 2.03(a)
through (f) hereof shall accrue upon discovery of such breach by either the
Depositor or the Master Servicer or notice thereof by any one of such parties
to the other parties.
Section 9.15. Closing Certificate and Opinion. On or before the
Closing Date, the Master Servicer shall cause to be delivered to the Depositor
and ▇▇▇▇▇▇ Brothers Inc. an Opinion of Counsel, dated the Closing Date, in
form and substance reasonably satisfactory to the Depositor and ▇▇▇▇▇▇
Brothers Inc., as to the due authorization, execution and delivery of this
Agreement by the Master Servicer and the enforceability thereof.
Section 9.16. Standard Hazard and Flood Insurance Policies. For each
Mortgage Loan, the Master Servicer shall maintain, or cause to be maintained
by the Servicer, standard fire and casualty insurance and, where applicable,
flood insurance, all in accordance with the provisions of this Agreement and
the Servicing Agreement, as applicable. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set
forth in the Servicing Agreement and that no earthquake or other additional
insurance is to be required of any Mortgagor or to be maintained on property
acquired in respect of a defaulted loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
Pursuant to Section 4.01, any amounts collected by the Master
Servicer, or by the Servicer, under any insurance policies maintained pursuant
to this Section 9.16 (other than amounts to be applied to the restoration or
repair of the property subject to the related Mortgage or released to the
Mortgagor in accordance with the Servicing Agreement) shall be deposited into
the Collection Account, subject to withdrawal pursuant to Section 4.02. Any
cost incurred by the Master Servicer or the Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added
to the amount owing under the Mortgage Loan where the terms of the Mortgage
Loan so permit; provided, however, that the addition of any such cost shall
not be taken into account for purposes of calculating the distributions to be
made to Certificateholders and shall be recoverable by the Master Servicer or
the Servicer pursuant to Section 4.02(v).
Section 9.17. Presentment of Claims and Collection of Proceeds. The
Master Servicer shall, or shall cause the Servicer (to the extent provided in
the Servicing Agreement) to, prepare and present on behalf of the Trustee and
the Certificateholders all claims under the Insurance Policies with respect to
the Mortgage Loans, and take such actions (including the negotiation,
settlement, compromise or enforcement of the insured's claim) as shall be
necessary to realize recovery under such policies. Any proceeds disbursed to
the Master Servicer (or disbursed to the Servicer and remitted to the Master
Servicer) in respect of such policies or bonds shall be promptly deposited in
the Collection Account upon receipt, except that any amounts realized that are
to be applied to the repair or restoration of the related Mortgaged Property
as a condition requisite to the presentation of claims on the related Mortgage
Loan to the insurer under any applicable Insurance Policy need not be so
deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit the Servicer (consistent
with the Servicing Agreement) to take, any action that would result in
non-coverage under any applicable Primary Mortgage Insurance Policy of any
loss which, but for the actions of such Master Servicer or Servicer, would
have been covered thereunder. The Master Servicer shall use its best
reasonable efforts to keep in force and effect, or to cause the Servicer to
keep in force and effect (to the extent that the Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable
to each Mortgage Loan in accordance with the provisions of this Agreement and
the Servicing Agreement, as applicable. The Master Servicer shall not, and
shall not permit the Servicer to, cancel or refuse to renew any such Primary
Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Certificates and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the Servicing
Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause the Servicer
to present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or the
Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. Trustee To Retain Possession of Certain Insurance
Policies and Documents. The Trustee (or its custodian, if any, as directed by
the Trustee), shall retain possession and custody of the originals of the
Primary Mortgage Insurance Policies or certificate of insurance if applicable
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts distributable in
respect of the Certificates have been distributed in full and the Master
Servicer otherwise has fulfilled its obligations under this Agreement, the
Trustee (or its custodian, if any, as directed by the Trustee) shall also
retain possession and custody of each Mortgage File in accordance with and
subject to the terms and conditions of this Agreement. The Master Servicer
shall promptly deliver or cause to be delivered to the Trustee (or its
custodian, if any, as directed by the Trustee), upon the execution or receipt
thereof the originals of the Primary Mortgage Insurance Policies and any
certificates of renewal thereof, and such other documents or instruments that
constitute portions of the Mortgage File that come into the possession of the
Master Servicer from time to time.
Section 9.20. Realization Upon Defaulted Mortgage Loans. The Master
Servicer shall use its reasonable best efforts to, or to cause the Servicer
to, foreclose upon, repossess 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, all in accordance with the Servicing
Agreement.
Section 9.21. Compensation to the Master Servicer. The Master
Servicer shall (i) be entitled, at its election, either (a) to pay itself the
Master Servicing Fee, as reduced pursuant to Section 5.05, in respect of the
Mortgage Loans out of any Mortgagor payment on account of interest prior to
the deposit of such payment in the Collection Account it maintains or (b) to
withdraw from the Collection Account, subject to Section 5.05, the Master
Servicing Fee to the extent permitted by Section 4.02(iv). The Master Servicer
shall also be entitled, at its election, either (a) to pay itself the Master
Servicing Fee in respect of each delinquent Mortgage Loan master serviced by
it out of Liquidation Proceeds in respect of such Mortgage Loan or other
recoveries with respect thereto to the extent permitted in Section 4.02 or (b)
to withdraw from the Collection Account it maintains the Master Servicing Fee
in respect of each Liquidated Mortgage Loan to the extent of such Liquidation
Proceeds or other recoveries, to the extent permitted by Section 4.02.
Servicing compensation in the form of assumption fees, if any, late payment
charges, as collected, if any, or otherwise (including any Prepayment Penalty
Amount) shall be retained by the Master Servicer (or the Servicer) and shall
not be deposited in the Collection Account. If the Master Servicer does not
retain or withdraw the Master Servicing Fee from the Collection Account as
provided herein, the Master Servicer shall be entitled to direct the Trustee
to pay the Master Servicing Fee to such Master Servicer by withdrawal from the
Certificate Account to the extent that payments have been received with
respect to the applicable Mortgage Loan. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its activities hereunder
and shall not be entitled to reimbursement therefor except as provided in this
Agreement. Pursuant to Section 4.01(e), all income and gain realized from any
investment of funds in the Collection Account shall be for the benefit of the
Master Servicer as additional compensation. The provisions of this Section
9.21 are subject to the provisions of Section 6.14(b).
Section 9.22. REO Property. (a) In the event the Trust Fund acquires
ownership of any REO Property in respect of any Mortgage Loan, the deed or
certificate of sale shall be issued to the Trustee, or to its nominee, on
behalf of the Certificateholders. The Master Servicer shall use its reasonable
best efforts to sell, or, to the extent provided in the Servicing Agreement,
cause the Servicer to sell, any REO Property as expeditiously as possible and
in accordance with the provisions of this Agreement and the Servicing
Agreement, as applicable, but in all events within the time period, and
subject to the conditions set forth in Article X hereof. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall protect and
conserve, or cause the Servicer to protect and conserve, such REO Property in
the manner and to such extent required by the Servicing Agreement, subject to
Article X hereof.
(b) The Master Servicer shall deposit or cause to be deposited all
funds collected and received by it, or recovered from any Servicer, in
connection with the operation of any REO Property in the Collection Account.
(c) The Master Servicer and the Servicer, upon the final disposition
of any REO Property, shall be entitled to reimbursement for any related
unreimbursed Advances as well as any unpaid Master Servicing Fees or Servicing
Fees from Liquidation Proceeds received in connection with the final
disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Master Servicing Fees or Servicing Fees may be
reimbursed or paid, as the case may be, prior to final disposition, out of any
net rental income or other net amounts derived from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the Servicer as
provided above, shall be deposited in the Collection Account on or prior to
the Determination Date in the month following receipt thereof (and the Master
Servicer shall provide prompt written notice to the Trustee upon such deposit)
and be remitted by wire transfer in immediately available funds to the Trustee
for deposit into the Certificate Account on the next succeeding Deposit Date.
Section 9.23. [Omitted]
Section 9.24. Reports to the Trustee. (a) Not later than 30 days
after each Distribution Date, the Master Servicer shall forward to the Trustee
a statement, deemed to have been certified by a Servicing Officer, setting
forth the status of the Collection Account maintained by the Master Servicer
as of the close of business on the related Distribution Date, indicating that
all distributions required by this Agreement to be made by the Master Servicer
have been made (or if any required distribution has not been made by the
Master Servicer, specifying the nature and status thereof) and showing, for
the period covered by such statement, the aggregate of deposits into and
withdrawals from the Collection Account maintained by the Master Servicer.
Copies of such statement shall be provided by the Master Servicer to the
Depositor, Attention: Contract Finance, and, upon request, any
Certificateholders (or by the Trustee at the Master Servicer's expense if the
Master Servicer shall fail to provide such copies (unless (i) the Master
Servicer shall have failed to provide the Trustee with such statement or (ii)
the Trustee shall be unaware of the Master Servicer's failure to provide such
statement)).
(b) Not later than two Business Days following each Distribution
Date, the Master Servicer shall deliver to the Person designated by the
Depositor, in a format consistent with other electronic loan level reporting
supplied by the Master Servicer in connection with similar transactions, "loan
level" information with respect to the Mortgage Loans as of the related
Determination Date, to the extent that such information has been provided to
the Master Servicer by the Servicer or by the Depositor.
Section 9.25. Annual Officer's Certificate as to Compliance. (a) The
Master Servicer shall deliver to the Trustee and the Rating Agencies on or
before May 31 of each year, commencing on May 31, 2001, an Officer's
Certificate, certifying that with respect to the period ending on the
immediately preceding December 31; (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement; (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that the Servicer
has failed to perform any of its duties, responsibilities and obligations
under the Servicing Agreement in all material respects throughout such year,
or, if there has been a material default in the performance or fulfillment of
any such duties, responsibilities or obligations, specifying each such default
known to such Servicing Officer and the nature and status thereof, and (iv)
the Master Servicer has received from the Servicer such Servicer's annual
certificate of compliance and a copy of the Servicer's annual audit report, in
each case to the extent required under the Servicing Agreement, or, if any
such certificate or report has not been received by the Master Servicer, the
Master Servicer is using its best reasonable efforts to obtain such
certificate or report.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the Trustee at
the Master Servicer's expense if the Master Servicer failed to provide such
copies (unless (i) the Master Servicer shall have failed to provide the
Trustee with such statement or (ii) the Trustee shall be unaware of the Master
Servicer's failure to provide such statement).
Section 9.26. Annual Independent Accountants' Servicing Report. If
the Master Servicer has, during the course of any fiscal year, directly
serviced any of the Mortgage Loans, then the Master Servicer at its expense
shall cause a nationally recognized firm of independent certified public
accountants to furnish a statement to the Trustee, the Rating Agencies and the
Depositor on or before May 31 of each year, commencing on May 31, 2001, to the
effect that, with respect to the most recently ended fiscal year, such firm
has examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
FHLMC or the Uniform Single Attestation Program for Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities have been
conducted in compliance with this Agreement, or that such examination has
disclosed no material items of noncompliance except for (i) such exceptions as
such firm believes to be immaterial, (ii) such other exceptions as are set
forth in such statement and (iii) such exceptions that the Uniform Single
Attestation Program for Mortgage Bankers or the Audit Program for Mortgages
Serviced by FHLMC requires it to report. Copies of such statements shall be
provided to any Certificateholder upon request by the Master Servicer, or by
the Trustee at the expense of the Master Servicer if the Master Servicer shall
fail to provide such copies. If such report discloses exceptions that are
material, the Master Servicer shall advise the Trustee whether such exceptions
have been or are susceptible of cure, and will take prompt action to do so.
Section 9.27. Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from
any merger, conversion, other change in form or consolidation to which the
Master Servicer shall be a party, or any Person succeeding to the business of
the Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master
Servicer shall be a Person that shall be qualified and approved to service
mortgage loans for FNMA or FHLMC and shall have a net worth of not less than
$15,000,000.
Section 9.28. Resignation of Master Servicer. Except as otherwise
provided in Sections 9.27 and 9.29 hereof, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it unless it or the
Trustee determines that the Master Servicer's duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be cured.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel that shall be Independent to such effect
delivered to the Trustee. No such resignation shall become effective until the
Trustee shall have assumed, or a successor master servicer shall have been
appointed by the Trustee and until such successor shall have assumed, the
Master Servicer's responsibilities and obligations under this Agreement.
Notice of such resignation shall be given promptly by the Master Servicer to
the Depositor.
Section 9.29. Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
performed by the Master Servicer hereunder; provided, however, that the Master
Servicer shall have the right without the prior written consent of the
Trustee, the Depositor or the Rating Agencies to delegate or assign to or
subcontract with or authorize or appoint an Affiliate of the Master Servicer
to perform and carry out any duties, covenants or obligations to be performed
and carried out by the Master Servicer hereunder. In no case, however, shall
any such delegation, subcontracting or assignment to an Affiliate of the
Master Servicer relieve the Master Servicer of any liability hereunder. Notice
of such permitted assignment shall be given promptly by the Master Servicer to
the Depositor and the Trustee. If, pursuant to any provision hereof, the
duties of the Master Servicer are transferred to a successor master servicer,
the entire amount of the Master Servicing Fees and other compensation payable
to the Master Servicer pursuant hereto, including amounts payable to or
permitted to be retained or withdrawn by the Master Servicer pursuant to
Section 9.21 hereof, shall thereafter be payable to such successor master
servicer.
Section 9.30. Limitation on Liability of the Master Servicer and
Others. Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to the
Trustee or the Certificateholders for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Master Servicer or any such person against any liability that would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in its performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to master service the Mortgage
Loans in accordance with this Agreement and that in its opinion may involve it
in any expenses or liability; provided, however, that the Master Servicer may
in its sole discretion undertake any such action that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Collection Account it maintains as provided by Section 4.02.
The Master Servicer shall not be liable for any acts or omissions of
any Servicer. In particular, the Master Servicer shall not be liable for any
servicing errors or interruptions resulting from any failure of any Servicer
to maintain computer and other information systems that are year-2000
compliant.
Section 9.31. Indemnification; Third-Party Claims. The Master
Servicer agrees to indemnify the Depositor and the Trustee, and hold them
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liability, fees
and expenses that the Depositor and the Trustee may sustain as a result of the
failure of the Master Servicer to perform its duties and master service the
Mortgage Loans in compliance with the terms of this Agreement. The Depositor
and the Trustee shall immediately notify the Master Servicer if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans
entitling the Depositor or the Trustee to indemnification hereunder, whereupon
the Master Servicer shall assume the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it
or them in respect of such claim.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration. (a) As set forth in the
Preliminary Statement hereto, the Trustee shall elect REMIC status in
accordance with the REMIC Provisions with respect to each of the Lower Tier
REMICs and the Upper Tier REMIC. The Trustee shall make such elections on
Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of such elections, each Lower Tier
Interest, other than the Class LTR1 Interest and the Class LTR2 Interest, is
hereby designated as a regular interest in the Lower Tier REMIC to which such
Lower Tier Interest relates, and each Certificate, other than the Class R
Certificate, is hereby designated as a regular interest in the Upper Tier
REMIC. The Class LTR1 Interest is hereby designated as the sole residual
interest in the Pool 1 Lower Tier REMIC and the Class LTR2 Interest is hereby
designated as the sole residual interest in the Pool 2 Lower Tier REMIC. The
Class R Certificate evidences ownership of the Class LTR1 and Class LTR2
Interests and is also hereby designated as the sole residual interest in the
Upper Tier REMIC.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 86OG(a)(9) of the Code. For purposes
of Treasury Regulation 1.860G-1(a)(4), the "Latest Possible Distribution Date"
is the latest date specified in Section 7.01(a).
(c) The Trustee shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Trustee in fulfilling its
duties hereunder (including its duties as tax return preparer). The Trustee
shall be entitled to reimbursement of expenses to the extent provided in
clause (i) above from the Certificate Account.
(d) The Trustee shall prepare, sign and file, all of each REMIC's
federal and state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be
borne by the Trustee.
(e) The Trustee or its designee shall perform on behalf of each REMIC
all reporting and other tax compliance duties that are the responsibility of
such REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, if required by the Code, the REMIC Provisions, or
other such guidance, the Trustee shall provide (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any disqualified
person or organization and (ii) to the Certificateholders such information or
reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Master Servicer and the Holders of Certificates
shall take any action or cause the REMIC to take any action necessary to
create or maintain the status of such REMIC as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain such
status. Neither the Trustee, the Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause the REMIC to take any action
or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of such REMIC as a REMIC or (ii) result in the imposition
of a tax upon such REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Trustee and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger such
status or result in the imposition of such a tax. In addition, prior to taking
any action with respect to the REMIC or the assets therein, or causing such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of a Residual Certificate will consult with the
Trustee and the Master Servicer, or their respective designees, in writing,
with respect to whether such action could cause an Adverse REMIC Event to
occur with respect to such REMIC, and no such Person shall take any such
action or cause such REMIC to take any such action as to which the Trustee or
the Master Servicer has advised it in writing that an Adverse REMIC Event
could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in such REMIC or, if no such amounts are available, out
of other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to holders of regular interests in such REMIC, as the case
may be.
(h) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement with respect to eligible
substitute mortgage loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) Upon the request of any Rating Agency, the Trustee shall deliver
to such Rating Agency an Officer's Certificate stating the Trustee's
compliance with the provisions of this Section 10.01.
Section 10.02. Prohibited Transactions and Activities. Neither the
Depositor, the Master Servicer nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund,
(iii) the termination of each REMIC pursuant to Article VII of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement, or (v) a
repurchase of Mortgage Loans pursuant to Article II of this Agreement or (vi)
the exercise of the Pool 1 Call Option or the Pool 2 Call Option, nor acquire
any assets for any REMIC, nor sell or dispose of any investments in the
Certificate Account for gain, nor accept any contributions to the REMIC after
the Closing Date, unless it has received an Opinion of Counsel (at the expense
of the party causing such sale, disposition, or substitution) that such
disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of such REMIC as a REMIC or of the Certificates other
than the Residual Certificates as the regular interests therein, (b) affect
the distribution of interest or principal on the Certificates, (c) result in
the encumbrance of the assets transferred or assigned to the Trust Fund
(except pursuant to the provisions of this Agreement) or (d) cause such REMIC
to be subject to a tax on prohibited transactions or prohibited contributions
pursuant to the REMIC Provisions.
Section 10.03. Indemnification with Respect to Certain Taxes and Loss
of REMIC Status. (a) In the event that a REMIC fails to qualify as a REMIC,
loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Trustee of its duties and
obligations set forth herein, the Trustee shall indemnify the Holder of the
Residual Certificate against any and all losses, claims, damages, liabilities
or expenses ("Losses") resulting from such negligence; provided, however, that
the Trustee shall not be liable for any such Losses attributable to the action
or inaction of the Master Servicer, the Depositor, or the Holder of such
Residual Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which
the Trustee has relied. The foregoing shall not be deemed to limit or restrict
the rights and remedies of the Holder of such Residual Certificate now or
hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Trustee have any liability (1) for any action
or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent
performance by the Trustee of its duties and obligations set forth herein, and
(3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).
Section 10.04. REO Property. (a) Notwithstanding any other provision
of this Agreement, the Master Servicer, acting on behalf of the Trustee
hereunder, shall not, and shall, to the extent provided in the Servicing
Agreement, not permit the Servicer to, rent, lease, or otherwise earn income
on behalf of any REMIC with respect to any REO Property which might cause such
REO Property to fail to qualify as "foreclosure" property within the meaning
of section 860G(a)(8) of the Code or result in the receipt by any REMIC of any
"income from non-permitted assets" within the meaning of section 860F(a)(2) of
the Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Master Servicer has advised, or has
caused the Servicer to advise, the Trustee in writing to the effect that,
under the REMIC Provisions, such action would not adversely affect the status
of the REMIC as a REMIC and any income generated for such REMIC by the REO
Property would not result in the imposition of a tax upon such REMIC.
(b) The Master Servicer shall make, or shall cause the Servicer to
make, reasonable efforts to sell any REO Property for its fair market value.
In any event, however, the Master Servicer shall, or shall cause the Servicer
to, dispose of any REO Property within three years from the end of the
calendar year of its acquisition by the Trust Fund unless the Trustee has
received a grant of extension from the Internal Revenue Service to the effect
that, under the REMIC Provisions and any relevant proposed legislation and
under applicable state law, the REMIC may hold REO Property for a longer
period without adversely affecting the REMIC status of such REMIC or causing
the imposition of a Federal or state tax upon such REMIC. If the Trustee has
received such an extension, then the Trustee, or the Master Servicer, acting
on its behalf hereunder, shall, or shall cause the Servicer to, continue to
attempt to sell the REO Property for its fair market value for such period
longer than three years as such extension permits (the "Extended Period"). If
the Trustee has not received such an extension and the Trustee, or the Master
Servicer acting on behalf of the Trustee hereunder, or the Servicer is unable
to sell the REO Property within 33 months after its acquisition by the Trust
Fund or if the Trustee has received such an extension, and the Trustee, or the
Master Servicer acting on behalf of the Trustee hereunder, is unable to sell
the REO Property within the period ending three months before the close of the
Extended Period, the Master Servicer shall, or shall cause the Servicer to,
before the end of the three year period or the Extended Period, as applicable,
(i) purchase such REO Property at a price equal to the REO Property's fair
market value or (ii) auction the REO Property to the highest bidder (which may
be the Master Servicer) in an auction reasonably designed to produce a fair
price prior to the expiration of the three-year period or the Extended Period,
as the case may be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 11.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject matter
hereof. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms
hereof.
Section 11.03. Amendment. (a) This Agreement may be amended from time
to time by the Depositor, the Master Servicer and the Trustee, without notice
to or the consent of any of the Holders, (i) to cure any ambiguity, (ii) to
cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the Trust
Fund or this Agreement in any Offering Document; or to correct or supplement
any provision herein which may be inconsistent with any other provisions
herein, (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or (iv) to add, delete, or amend any
provisions to the extent necessary or desirable to comply with any
requirements imposed by the Code and the REMIC Provisions. No such amendment
effected pursuant to the preceding sentence shall, as evidenced by an Opinion
of Counsel, adversely affect the status of any REMIC created pursuant to this
Agreement, nor shall such amendment effected pursuant to clause (iii) of such
sentence adversely affect in any material respect the interests of any Holder.
Prior to entering into any amendment without the consent of Holders pursuant
to this paragraph, the Trustee may require an Opinion of Counsel (at the
expense of the party requesting such amendment) to the effect that such
amendment is permitted under this paragraph. Any such amendment shall be
deemed not to adversely affect in any material respect any Holder, if the
Trustee receives written confirmation from each Rating Agency that such
amendment will not cause such Rating Agency to reduce, qualify or withdraw the
then current rating assigned to the Certificates (and any Opinion of Counsel
requested by the Trustee in connection with any such amendment may rely
expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of not less than 66-2/3% of the Class Principal Amount (or Percentage
Interest) of each Class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders; provided, however, that no such amendment shall be made unless the
Trustee receives an Opinion of Counsel, at the expense of the party requesting
the change, that such change will not adversely affect the status of the REMIC
as a REMIC or cause a tax to be imposed on such REMIC; and provided further,
that no such amendment may (i) reduce in any manner the amount of, or delay
the timing of, payments received on Mortgage Loans which are required to be
distributed on any Certificate, without the consent of the Holder of such
Certificate or (ii) reduce the aforesaid percentages of Class Principal Amount
(or Percentage Interest) of Certificates of each Class, the Holders of which
are required to consent to any such amendment without the consent of the
Holders of 100% of the Class Principal Amount (or Class Notional Amount) of
each Class of Certificates affected thereby. For purposes of this paragraph,
references to "Holder" or "Holders" shall be deemed to include, in the case of
any Class of Book-Entry Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to any amendment of any Servicing
Agreement except pursuant to the standards provided in this Section with
respect to amendment of this Agreement.
Section 11.04. Voting Rights. Except to the extent that the consent
of all affected Certificateholders is required pursuant to this Agreement,
with respect to any provision of this Agreement requiring the consent of
Certificateholders representing specified percentages of aggregate outstanding
Certificate Principal Amount (or Notional Amount), Certificates owned by the
Depositor, the Master Servicer, the Trustee or the Servicer or Affiliates
thereof are not to be counted so long as such Certificates are owned by the
Depositor, the Master Servicer, the Trustee or the Servicer or Affiliates
thereof.
Section 11.05. Provision of Information. (a) For so long as any of
the Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, each of the Depositor and the Trustee
agree to cooperate with each other to provide to any Certificateholders and to
any prospective purchaser of Certificates designated by such
Certificateholder, upon the request of such Certificateholder or prospective
purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee
in providing such information shall be reimbursed by the Depositor.
(b) The Trustee will provide to any person to whom a Prospectus was
delivered, upon the request of such person specifying the document or
documents requested, (i) a copy (excluding exhibits) of any report on Form 8-K
or Form 10-K filed with the Securities and Exchange Commission pursuant to
Section 6.20(c) and (ii) a copy of any other document incorporated by
reference in the Prospectus. Any reasonable out-of-pocket expenses incurred by
the Trustee in providing copies of such documents shall be reimbursed by the
Depositor.
(c) On each Distribution Date, the Trustee shall deliver or cause to
be delivered by first class mail to the Depositor, Attention: Contract
Finance, a copy of the report delivered to Certificateholders pursuant to
Section 4.03.
Section 11.06. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 11.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
received by (a) in the case of the Depositor, Structured Asset Securities
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇, (b) in the case of the Trustee, The Chase Manhattan
Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇,
Attention: Capital Markets Fiduciary Services/SASCO 2000-ALS2, and (c) in the
case of the Master Servicer, Aurora Loan Services Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: Master Servicing or as to
each party such other address as may hereafter be furnished by such party to
the other parties in writing. Any notice required or permitted to be mailed to
a Holder 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 Holder receives such notice.
Section 11.08. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 11.09. Indulgences; No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
Section 11.10. Headings Not To Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement. Nothing in this Agreement or in
the Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of
the Certificates, any benefit or any legal or equitable right, power, remedy
or claim under this Agreement, except to the extent specified in Section
11.14.
Section 11.12. Special Notices to the Rating Agencies. (a) The
Depositor shall give prompt notice to the Rating Agencies of the occurrence of
any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to
Section 11.03;
(ii) any Assignment by the Master Servicer of its rights
hereunder or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in
Section 6.14;
(iv) any notice of termination given to the Master
Servicer pursuant to Section 6.14 and any resignation of the Master
Servicer hereunder;
(v) the appointment of any successor to any Master
Servicer pursuant to Section 6.14; and
(vi) the making of a final payment pursuant to
Section 7.02.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight
courier, as follows:
If to Fitch, to:
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgage Surveillance
If to S&P, to:
Standard & Poor's Ratings Services
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Residential Mortgage Surveillance
(c) The Trustee shall deliver to the Rating Agencies reports prepared
pursuant to Section 4.03.
Section 11.13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
Section 11.14. Transfer of Servicing. The Seller agrees that it shall
provide written notice to the Trustee and the Master Servicer thirty days
prior to any transfer or assignment by the Seller of its rights under the
Servicing Agreement or of the servicing thereunder or delegation of its rights
or duties thereunder or any portion thereof to any Person other than the
initial Servicer under the Servicing Agreement. In addition, the ability of
the Seller to transfer or assign its rights and delegate its duties under the
Servicing Agreement or to transfer the servicing thereunder to a successor
servicer shall be subject to the following conditions:
(i) Such successor servicer must be qualified to service
loans for FNMA or FHLMC;
(ii) Such successor servicer must satisfy the
seller/servicer eligibility standards in the Servicing Agreement,
exclusive of any experience in mortgage loan origination, and must be
reasonably acceptable to the Master Servicer, whose approval shall
not be unreasonably withheld;
(iii) Such successor servicer must execute and deliver to
the Trustee and the Master Servicer an agreement, in form and
substance reasonably satisfactory to the Trustee and the Master
Servicer, that contains an assumption by such successor servicer of
the due and punctual performance and observance of each covenant and
condition to be performed and observed by the Servicer under the
Servicing Agreement;
(iv) There must be delivered to the Trustee a letter from
each Rating Agency to the effect that such transfer of servicing will
not result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Certificates;
(v) The Seller shall, at its cost and expense, take such
steps, or cause the terminated Servicer to take such steps, as may be
necessary or appropriate to effectuate and evidence the transfer of
the servicing of the Mortgage Loans to such successor servicer,
including, but not limited to, the following: (A) to the extent
required by the terms of the Mortgage Loans and by applicable federal
and state laws and regulations, the Seller shall cause the prior
Servicer to timely mail to each obligor under a Mortgage Loan any
required notices or disclosures describing the transfer of servicing
of the Mortgage Loans to the successor servicer; (B) prior to the
effective date of such transfer of servicing, the Seller shall cause
the prior Servicer to transmit to any related insurer notification of
such transfer of servicing; (C) on or prior to the effective date of
such transfer of servicing, the Seller shall cause the prior Servicer
to deliver to the successor servicer all Mortgage Loan Documents and
any related records or materials; (D) on or prior to the effective
date of such transfer of servicing, the Seller shall cause the prior
Servicer to transfer to the successor servicer, or, if such transfer
occurs after a Remittance Date but before the next succeeding Deposit
Date, to the Master Servicer, all funds held by the Servicer in
respect of the Mortgage Loans; (E) on or prior to the effective date
of such transfer of servicing, the Seller shall cause the prior
Servicer to, after the effective date of the transfer of servicing to
the successor servicer, continue to forward to such successor
servicer, within one Business Day of receipt, the amount of any
payments or other recoveries received by the prior Servicer, and to
notify the successor servicer of the source and proper application of
each such payment or recovery; and (F) the Seller shall cause the
prior Servicer to, after the effective date of transfer of servicing
to the successor servicer, continue to cooperate with the successor
servicer to facilitate such transfer in such manner and to such
extent as the successor servicer may reasonably request.
IN WITNESS WHEREOF, the Depositor, the Trustee and the Master
Servicer have caused their names to be signed hereto by their respective
officers hereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK,
as Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
AURORA LOAN SERVICES INC., as Master
Servicer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Solely for purposes of Section 11.14,
accepted and agreed to by:
▇▇▇▇▇▇ CAPITAL, A DIVISION OF
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
EXHIBIT A
FORMS OF CERTIFICATES
EXHIBIT B-1
FORM OF INITIAL CERTIFICATION
---------------
Date
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Trust Agreement (the "Trust Agreement"), dated as of
April 1, 2000 among Structured Asset Securities Corporation,
as Depositor, The Chase Manhattan Bank, as Trustee, and
Aurora Loan Services Inc., as Master Servicer, with respect to
Aurora Loan Services Mortgage Pass-Through Certificates,
Series 2000-2
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as Custodian on behalf of the
Trustee, hereby certifies that it (or its custodian) has received the
documents listed in Section 2.01(b) of the Trust Agreement for each Mortgage
File pertaining to each Mortgage Loan listed on Schedule A, to the Trust
Agreement, subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Trust Agreement and the Trust Agreement sections cross-referenced
therein.
[Custodian], on behalf of
THE CHASE MANHATTAN BANK,
as Trustee
By:_________________________
Name:
Title:
EXHIBIT B-2
FORM OF INTERIM CERTIFICATION
------------
Date
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Trust Agreement (the "Trust Agreement"), dated as of
April 1, 2000 among Structured Asset Securities
Corporation, as Depositor, The Chase Manhattan Bank,
as Trustee, and Aurora Loan Services Inc., as
Master Servicer, with respect to Aurora Loan Services
Mortgage Pass-Through Certificates, Series 2000-2
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2.01(b) of
the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents identified above and has
determined that each such document appears regular on its face and appears to
relate to the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement including, but
not limited to, Section 2.02(b).
[Custodian], on behalf of
THE CHASE MANHATTAN BANK,
as Trustee
By:___________________________
Name:
Title:
EXHIBIT B-3
FORM OF FINAL CERTIFICATION
------------
Date
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Structured Asset Securities Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Trust Agreement (the "Trust Agreement"), dated as of April 1,
2000 among Structured Asset Securities Corporation, as
Depositor, The Chase Manhattan Bank, as Trustee, and Aurora
Loan Services Inc., as Master Servicer, with respect to Aurora
Loan Services Mortgage Pass-Through Certificates, Series 2000-2
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as Custodian on behalf of the Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2.01(b) of
the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the documents listed above and has
determined that each such document appears to be complete and, based on an
examination of such documents, the information set forth in the Mortgage Loan
Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement.
[Custodian], on behalf of
THE CHASE MANHATTAN BANK,
as Trustee
By:___________________________
Name:
Title:
EXHIBIT B-4
FORM OF ENDORSEMENT
Pay to the order of The Chase Manhattan Bank, as trustee (the
"Trustee") under the Trust Agreement dated as of April 1, 2000, among
Structured Asset Securities Corporation, as Depositor, the Trustee and the
Master Servicer relating to Aurora Loan Services Mortgage Pass-Through
Certificates, Series 2000-2, without recourse.
--------------------------------------
[current signatory on note]
By:___________________________________
Name:
Title:
EXHIBIT C
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
-----------
Date
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of April 1, 2000 among
Structured Asset Securities Corporation, as Depositor, Aurora Loan Services
Inc., as Master Servicer, and you, as Trustee (the "Trust Agreement"), the
undersigned Master Servicer hereby requests a release of the Mortgage File
held by you as Trustee with respect to the following described Mortgage Loan
for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The Master Servicer hereby certifies
that all amounts received in connection with the loan have been or will be
credited to the Collection Account or the Certificate Account (whichever is
applicable) pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The Master Servicer hereby certifies
that a Qualifying Substitute Mortgage Loan has been assigned and delivered to
you along with the related Mortgage File pursuant to the Trust Agreement.)
4. Mortgage Loan repurchased. (The Master Servicer hereby certifies
that the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Trust
Agreement.)
5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be
held by the undersigned in accordance with the provisions of the Trust
Agreement and will be returned to you within ten (10) days of our receipt of
the Mortgage File, except if the Mortgage Loan has been paid in full, or
repurchased or substituted for a Qualifying Substitute Mortgage Loan (in which
case the Mortgage File will be retained by us permanently) and except if the
Mortgage Loan is being foreclosed (in which case the Mortgage File will be
returned when no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to
them in the Trust Agreement.
-------------------------------------
[Name of Master Servicer]
By:__________________________________
Name:
Title: Servicing Officer
EXHIBIT D-1
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn,
deposes and says:
1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the
"Purchaser"), a _______________________ [description of type of entity] duly
organized and existing under the laws of the [State of __________] [United
States], on behalf of which he [she] makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is __________.
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code") and will not be a "disqualified organization" as of
__________________ [date of transfer], and that the Purchaser is not acquiring
a Residual Certificate (as defined in the Agreement) for the account of, or as
agent (including a broker, nominee, or other middleman) for, any person or
entity from which it has not received an affidavit substantially in the form
of this affidavit. For these purposes, a "disqualified organization" means the
United States, any state or political subdivision thereof, any foreign
government, any international organization, any agency or instrumentality of
any of the foregoing (other than an instrumentality if all of its activities
are subject to tax and a majority of its board of directors is not selected by
such governmental entity), any cooperative organization furnishing electric
energy or providing telephone service to persons in rural areas as described
in Code Section 1381(a)(2)(C), any "electing large partnership" within the
meaning of Section 775 of the Code, or any organization (other than a farmers'
cooperative described in Code Section 521) that is exempt from federal income
tax unless such organization is subject to the tax on unrelated business
income imposed by Code Section 511.
4. That the Purchaser is not, and on __________________ [date of
transfer] will not be, and is not and on such date will not be investing the
assets of, an employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a plan subject to Code Section
4975 or a person or entity that is using the assets of any employee benefit
plan or other plan to acquire a Residual Certificate.
5. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, The Chase Manhattan Bank, as Trustee and Aurora Loan Services
Inc., as Master Servicer, dated as of April 1, 2000, no transfer of a Residual
Certificate shall be permitted to be made to any person unless the Trustee has
received a certificate from such transferee to the effect that such transferee
is not an employee benefit plan subject to ERISA or a plan subject to Section
4975 of the Code and is not using the assets of any employee benefit plan or
other plan to acquire a Residual Certificate.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (such
entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to such Residual Certificate.
8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge that the
requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof are
not satisfied or that the Purchaser has reason to believe does not satisfy the
requirements set forth in paragraph 7 hereof, and (ii) without obtaining from
the prospective Purchaser an affidavit substantially in this form and
providing to the Trustee a written statement substantially in the form of
Exhibit G to the Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any cash
flows generated by the interest and that it intends to pay taxes associated
with holding such Residual Certificate as they become due.
10. That the Purchaser (i) is a U.S. Person or (ii) is a Non-U.S.
Person that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor
and the Trustee with an effective Internal Revenue Service Form 4224 or
successor form at the time and in the manner required by the Code. "Non-U.S.
Person" Any person other than (i) a citizen or resident of the United States;
(ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United
States or of any state thereof, including, for this purpose, the District of
Columbia; (iii) a partnership (or entity treated as a partnership for tax
purposes) organized in the United States or under the laws of the United
States or of any state thereof, including, for this purpose, the District of
Columbia (unless provided otherwise by future Treasury regulations); (iv) an
estate whose income is includible in gross income for United States income tax
purposes regardless of its source; or (v) a trust, if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more U.S. Persons have authority to control all
substantial decisions of the trust. Notwithstanding the last clause of the
preceding sentence, to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996, and treated as U.S. Persons prior to
such date, may elect to continue to be U.S. Persons.
11. That the Purchaser agrees to such amendments of the Trust
Agreement as may be required to further effectuate the restrictions on
transfer of any Residual Certificate to such a "disqualified organization," an
agent thereof, a Book-Entry Nominee, or a person that does not satisfy the
requirements of paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Trustee as
its agent to act as "tax matters person" of the Trust Fund pursuant to the
Trust Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [title of officer] this _____ day of __________, 20__.
--------------------------------------
[name of Purchaser]
By:___________________________________
Name:
Title:
Personally appeared before me the above-named [name of
officer] ________________, known or proved to me to be the same person who
executed the foregoing instrument and to be the [title of officer]
_________________ of the Purchaser, and acknowledged to me that he [she]
executed the same as his [her] free act and deed and the free act and deed of
the Purchaser.
Subscribed and sworn before me this _____ day of __________,
20__.
NOTARY PUBLIC
---------------------------------
COUNTY OF_____________________
STATE OF_______________________
My commission expires the _____ day of __________, 20__.
EXHIBIT D-2
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
-------------------
Date
Re: Aurora Loan Services Mortgage Pass-Through Certificates,
Series 2000-2
_______________________ (the "Transferor") has reviewed the
attached affidavit of _____________________________ (the "Transferee"), and
has no actual knowledge that such affidavit is not true and has no reason to
believe that the information contained in paragraph 7 thereof is not true, and
has no reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
-------------------------------
Name:
Title:
EXHIBIT E
SERVICING AGREEMENT
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Aurora Loan Services Mortgage Pass-Through Certificates,
Series 2000-2
-----------------------------------------------------------
Reference is hereby made to the Trust Agreement dated as of
April 1, 2000 (the "Trust Agreement") among Structured Asset Securities
Corporation, as Depositor, Aurora Loan Services Inc., as Master Servicer and
The Chase Manhattan Bank, as Trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Trust Agreement.
This letter relates to $_________ initial Certificate
Principal Amount of Class __ Certificates which are held in the form of
Definitive Certificates registered in the name of _____________________ (the
"Transferor"). The Transferor has requested a transfer of such Definitive
Certificates for Definitive Certificates of such Class registered in the name
of [insert name of transferee].
In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Trust Agreement and the Certificates and (ii) Rule 144A under the Securities
Act to a purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer", which
purchaser is aware that the sale to it is being made in reliance upon Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Placement Agent and the
Depositor.
----------------------------------------
[Name of Transferor]
By:_____________________________________
Name:
Title:
Dated: __________________, ________
EXHIBIT G
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
------------------
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Aurora Loan Services Mortgage Pass-Through Certificates, Series
2000-2 (the "Privately Offered Certificates") of Structured Asset Securities
Corporation (the "Depositor"), we confirm that:
(1) We understand that the Privately Offered Certificates have not been,
and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as
permitted in the following sentence. We agree, on our own behalf and
on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Privately Offered Certificates
within three years of the later of the date of original issuance of
the Privately Offered Certificates or the last day on which such
Privately Offered Certificates are owned by the Depositor or any
affiliate of the Depositor (which includes the Placement Agent) we
will do so only (A) to the Depositor, (B) to "qualified institutional
buyers" (within the meaning of Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act ("QIBs"), (C)
pursuant to the exemption from registration provided by Rule 144
under the Securities Act, or (D) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Trustee under the Trust Agreement dated as of April
1, 2000 among the Depositor, Aurora Loan Services Inc., as Master
Servicer and The Chase Manhattan Bank, as Trustee (the "Trustee"), a
signed letter in the form of this letter; and we further agree, in
the capacities stated above, to provide to any person purchasing any
of the Privately Offered Certificates from us a notice advising such
purchaser that resales of the Privately Offered Certificates are
restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited
Investor, we will be required to furnish to the Trustee and the
Depositor a certification from such transferee in the form hereof to
confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act. We further understand that the
Privately Offered Certificates purchased by us will bear a legend to
the foregoing effect.
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in
the Privately Offered Certificates, and we and any account for which
we are acting are each able to bear the economic risk of such
investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional
Accredited Investor) as to each of which we exercise sole investment
discretion.
(5) We have received such information as we deem necessary in order to
make our investment decision.
(6) If we are acquiring ERISA-Restricted Certificates, we understand that
in accordance with ERISA, the Code and the Exemption, no Plan as to
which the Purchaser, the Depositor, the Servicer or the Master
Servicer or the Trustee is a party in interest or disqualified
person, and no person acting on behalf of such a Plan may acquire
such Certificate unless the acquisition would constitute an exempt
transaction under a statutory exemption or any of the administrative
exemptions issued by the U.S. Department of Labor.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Trust Agreement.
You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
----------------------------------
[Purchaser]
By________________________________
Name:
Title:
EXHIBIT H
[FORM OF ERISA TRANSFER AFFIDAVIT]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is the ______________________ of (the
"Investor"), a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.
2. The Investor either (x) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), the Trustee of any such plan or
a person acting on behalf of any such plan nor a person using the assets of
any such plan or (2) if the Investor is an insurance company, such Investor is
purchasing such Certificates with funds contained in an "Insurance Company
General Account" (as such term is defined in Section v(e) of the Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under PTCE 95-60; or (y) shall
deliver to the Trustee and the Depositor an opinion of counsel (a "Benefit
Plan Opinion") satisfactory to the Trustee and the Depositor, and upon which
the Trustee and the Depositor shall be entitled to rely, to the effect that
the purchase or holding of such Certificate by the Investor will not result in
the assets of the Trust Fund being deemed to be plan assets and subject to the
prohibited transaction provisions of ERISA or the Code and will not subject
the Trustee or the Depositor to any obligation in addition to those undertaken
by such entities in the Trust Agreement, which opinion of counsel shall not be
an expense of the Trustee or the Depositor.
3. The Investor hereby acknowledges that under the terms of
the Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, as Depositor, Aurora Loan Services Inc., as Master Servicer, and
The Chase Manhattan Bank, as Trustee, dated as of April 1, 2000, no transfer
of the ERISA-Restricted Certificates shall be permitted to be made to any
person unless the Depositor and Trustee have received a certificate from such
transferee in the form hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument
to be executed on its behalf, pursuant to proper authority, by its duly
authorized officer, duly attested, this ____ day of _______________, 20__.
----------------------------------------
[Investor]
By:_____________________________________
Name:
Title:
ATTEST:
---------------------------
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named
___________________, known or proved to me to be the same person who executed
the foregoing instrument and to be the _________________ of the Investor, and
acknowledged that he executed the same as his free act and deed and the free
act and deed of the Investor.
Subscribed and sworn before me this _____ day of ___________
20___.
----------------------------------
NOTARY PUBLIC
My commission expires the
____ day of __________, 20__.
EXHIBIT I
MONTHLY REMITTANCE ADVICE
EXHIBIT J
MONTHLY ELECTRONIC DATA TRANSMISSION
EXHIBIT K
CUSTODIAL AGREEMENT
SCHEDULE A
MORTGAGE LOAN SCHEDULE
SCHEDULE B
PRINCIPAL AMOUNT SCHEDULES
[Not Applicable]
