Exhibit 4.1
NEW CENTURY MORTGAGE SECURITIES, INC.,
Depositor
NEW CENTURY MORTGAGE CORPORATION,
Master Servicer
FIRSTAR BANK MILWAUKEE, N.A.,
Trustee
and
U.S. BANK NATIONAL ASSOCIATION,
Trust Administrator
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 1999
---------------------------------
NEW CENTURY HOME EQUITY LOAN TRUST,
SERIES 1999-NCB
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.................................................................1
Section 1.02. Accounting...................................................................33
ARTICLE II
ESTABLISHMENT OF THE TRUST;
PURCHASE AND SALE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Establishment of the Trust...................................................34
Section 2.02. Purchase and Sale of Mortgage Loans..........................................34
Section 2.03. Grant of Security Interest...................................................34
Section 2.04. Document Delivery Requirements...............................................35
Section 2.05. Acceptance by the Trustee....................................................39
Section 2.06. Repurchase or Substitution of Mortgage Loans by the Seller, the
Depositor or the Master Servicer.............................................40
Section 2.07. Representations, Warranties and Covenants of the Master Servicer.............45
Section 2.08. Representations and Warranties of the Depositor..............................48
Section 2.09. Execution of Certificates....................................................51
Section 2.10. Designation of Interests in the Trust........................................52
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST
Section 3.01. Administration of the Trust; Servicing of the Mortgage Loans.................54
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers.............58
Section 3.03. Successor Subservicers, Termination of Subservicing Agreement................59
Section 3.04. Liability of the Master Servicer.............................................60
Section 3.05. No Contractual Relationship Between Subservicers and Trust
Administrator, Trustee or Certificateholders.................................60
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Section 3.06. Assumption or Termination of Sub-Servicing Agreements by Trust
Administrator................................................................60
Section 3.07. Collection of Certain Mortgage Loan Payments.................................61
Section 3.08. Subservicing Accounts........................................................62
Section 3.09. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts.....................................................................62
Section 3.10. Collection Account...........................................................63
Section 3.11. Withdrawals from the Collection Account......................................65
Section 3.12. Investment of Funds in the Accounts..........................................66
Section 3.13. Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage............................................................68
Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption Agreements....................69
Section 3.15. Realization upon Defaulted Mortgage Loans....................................70
Section 3.16. Trustee and Trust Administrator to Cooperate; Release of Mortgage Files......72
Section 3.17. Servicing Compensation.......................................................74
Section 3.18. Reports to the Trust Administrator and the Trustee; Collection
Account Statements...........................................................74
Section 3.19. Statement as to Compliance and Financial Statements..........................74
Section 3.20. Independent Public Accountants' Servicing Report.............................75
Section 3.21. Access to Certain Documentation..............................................76
Section 3.22. Title, Management and Disposition of REO Property............................76
Section 3.23. Prepayment Interest Shortfalls...............................................79
Section 3.24. First Liens..................................................................79
Section 3.25. Indemnification..............................................................80
Section 3.26. Certain Procedures Relating to Successor Subservicers and Successor
Master Servicers.............................................................81
Section 3.27. Reports to the Securities and Exchange Commission............................81
Section 3.28. Servicing Termination........................................................82
ARTICLE IV
FLOW OF FUNDS
Section 4.01. Establishment of Accounts....................................................83
Section 4.02. The Certificate Insurance Policy.............................................83
Section 4.03. Deposits into, and Transfers Among, the Accounts.............................85
Section 4.04. Flow of Funds and Distributions..............................................86
Section 4.05. Statements to Certificateholders.............................................90
Section 4.06. Remittance Reports; Delinquency Advances by the Master Servicer
and Insurance Claims.........................................................94
Section 4.07. Compliance with Withholding Requirements.....................................96
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ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.............................................................97
Section 5.02. Registration of Transfer and Exchange of Certificates........................97
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates...........................102
Section 5.04. Persons Deemed Certificateholders...........................................103
Section 5.05. Book-Entry Certificates.....................................................103
Section 5.06. Notices to Depository.......................................................104
Section 5.07. Definitive Certificates.....................................................104
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Liability of the Depositor and the Master Servicer..........................106
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer.............106
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer, any
Subservicer and Others......................................................106
Section 6.04. Limitation on Resignation of the Master Servicer; No Assignment or
Delegation of Duties by Master Servicer.....................................107
Section 6.05. Rights of the Depositor, the Certificateholders and Others in Respect
of the Master Servicer......................................................108
Section 6.06. Eligibility Requirements for Master Servicer................................109
ARTICLE VII
DEFAULT
Section 7.01. Master Servicer Defaults; Certain Matters Affecting the Master
Servicer....................................................................110
Section 7.02. Trust Administrator or Trustee to Act; Appointment of Successor.............113
Section 7.03. Notification to Mortgagors and Certificateholders...........................114
Section 7.04. Additional Remedies of Trustee upon Master Servicer Defaults................114
Section 7.05. Waiver of Master Servicer Defaults..........................................114
Section 7.06. Survivability of Master Servicer Liabilities................................115
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR
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Section 8.01. Duties of Trustee and the Trust Administrator...............................116
Section 8.02. Certain Matters Affecting the Trustee and the Trust Administrator...........117
Section 8.03. Neither Trustee nor Trust Administrator Liable for Certificates or
Mortgage Loans..............................................................119
Section 8.04. Trustee and Trust Administrator May Own Certificates........................119
Section 8.05. Expenses of Trustee and Trust Administrator.................................119
Section 8.06. Trustee and Trust Administrator Eligibility Requirements....................120
Section 8.07. Resignation and Removal of the Trustee and the Trust Administrator..........120
Section 8.08. Successor Trustee and Trust Administrator...................................122
Section 8.09. Merger or Consolidation of Trustee or Trust Administrator...................123
Section 8.10. Appointment of Co-Trustee or Separate Trustee...............................123
Section 8.11. Trust Administrator Records.................................................124
Section 8.12. Appointment of Office or Agency.............................................124
Section 8.13. Exercise of Trustee Powers by Certificateholders............................125
Section 8.14. Representations and Warranties..............................................125
ARTICLE IX
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 9.01. Certain Rights of the Certificate Insurer...................................127
Section 9.02. Trustee To Act Solely with Consent of the Certificate Insurer...............127
Section 9.03. Trust Estate and Accounts Held for Benefit of the Certificate Insurer
and the Certificateholders..................................................128
Section 9.04. Effect of Payments by the Certificate Insurer; Subrogation..................128
Section 9.05. Notices to the Certificate Insurer..........................................129
Section 9.06. Third-Party Beneficiary.....................................................129
Section 9.07. Trust Administrator to Hold the Policy......................................129
ARTICLE X
TERMINATION
Section 10.01. Termination.................................................................130
Section 10.02. Additional Termination Requirements.........................................132
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment...................................................................133
Section 11.02. Recordation of Agreement; Counterparts......................................134
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Section 11.03. Limitation on Rights of Certificateholders..................................134
Section 11.04. Governing Law; Jurisdiction.................................................135
Section 11.05. Notices.....................................................................135
Section 11.06. Severability of Provisions..................................................136
Section 11.07. Article and Section References..............................................136
Section 11.08. Notice to the Rating Agencies...............................................137
Section 11.09. Further Assurances..........................................................138
Section 11.10. Benefits of Agreement.......................................................138
Section 11.11. Acts of Certificateholders..................................................138
Section 11.12. Tax Matters Person..........................................................139
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EXHIBITS:
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Exhibit A Form of Class A Certificate
Exhibit B Forms of Class R Certificate
Exhibit C Form of Mortgage Loan Purchase Agreement
Exhibit D [Reserved]
Exhibit E-1 Request for Release
Exhibit E-2 Request for Release (Mortgage Loans Paid in Full)
Exhibit F-1 Form of Trust Administrator's Initial Certification
Exhibit F-2 Form of Trust Administrator's Final Certification
Exhibit F-3 Form of Trust Administrator's Quarterly Certification
Exhibit G Form of Liquidation Report
Exhibit H-1 Forms of Transfer Certification
Exhibit H-2 Form of ERISA Certification
Exhibit I Form of Class R Certificate Transferor Affidavit and Transfer
Affidavit and Agreement
Exhibit J Form of Written Order to Authenticate
Exhibit K Form of Certificate Insurance Policy
Exhibit L Mortgage Loan Schedule
Exhibit M Prepayment Charge Schedule
vi
This Pooling and Servicing Agreement is dated as of September
1, 1999 (the "Agreement"), among NEW CENTURY MORTGAGE SECURITIES, INC. as
depositor (the "Depositor"), NEW CENTURY MORTGAGE CORPORATION as servicer (in
such capacity, the "Master Servicer" or "New Century"), FIRSTAR BANK MILWAUKEE,
N.A. as trustee (the "Trustee"), and U.S. BANK NATIONAL ASSOCIATION as trust
administrator (the "Trust Administrator").
PRELIMINARY STATEMENT:
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
WHEREAS, New Century is in the business of originating or
purchasing from others certain mortgage loans, including the Mortgage Loans;
WHEREAS, the Depositor has purchased from the Seller Mortgage
Loans originated or purchased by New Century and wishes to establish a trust
administered by the Trustee and the Trust Administrator, which trust will (i)
purchase the Mortgage Loans from the Depositor, with the result that the entire
beneficial ownership of the Mortgage Loans will be in the Trust Estate, and (ii)
issue pass-through certificates which in the aggregate will evidence the entire
beneficial ownership in the Trust Estate, with the result that, following such
purchase from the Depositor, the Trustee will hold legal title to the Trust
Estate and the Certificateholders will hold beneficial title to the Trust
Estate; and
WHEREAS, the Master Servicer wishes to provide for the
servicing of the Mortgage Loans on the terms and conditions herein set forth;
WHEREAS, the Depositor intends that a REMIC election will be
made with respect to the Trust Estate for federal income tax purposes. The Trust
Estate will be evidenced by the Regular Certificates (which will represent the
"regular interests" in the Trust Estate) and the Class R Certificates (which
will represent the sole "residual interests" in the Trust Estate). The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the REMIC Certificate Maturity Date.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the Depositor, the Master Servicer, the Trustee and the Trust
Administrator agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the meanings specified in this Article. Unless otherwise
specified, all calculations of interest described herein shall be made on the
basis of a 360-day year consisting of twelve 30-day months, except that
calculations in respect of interest on the Class A-1 Certificates shall be made
on the basis of the actual number of days elapsed divided by 360 days.
Many of the defined terms listed below may apply to both Loan
Groups or Certificate Groups and are sometimes used in this Agreement to refer
to a particular Loan Group or Certificate Group by the adjectival use of the
words "Group I" and "Group II".
"1933 Act": The Securities Act of 1933, as amended.
"Accepted Servicing Procedures": The servicing procedures set
forth in Section 3.01(b)(i).
"Account": Either the Collection Account or the Certificate
Account.
"Accrual Period": With respect to any Class of Regular
Certificates (other than the Class A-1 Certificates) and any Distribution Date
after the first Distribution Date, the calendar month preceding the month of
such Distribution Date (such calendar month assumed for purposes of this
definition to have 30 days). With respect to any Class of Regular Certificates
(other than the Class A-1 Certificates) and the first Distribution Date, the
period beginning on the Closing Date and ending on September 30, 1999. With
respect to the Class A-1 Certificates and any Distribution Date after the first
Distribution Date, the period commencing on the immediately preceding
Distribution Date and ending on the day immediately preceding such Distribution
Date. With respect to the Class A-1 Certificates and the first Distribution
Date, the period commencing on the Closing Date and ending on the day
immediately preceding such Distribution Date.
"Additional Servicing Compensation": As defined in Section
3.17 hereof.
"Administrative Fee": The amount payable to the Trustee on
each Distribution Date pursuant to Section 8.05 as compensation for all services
rendered by it in the execution of the trust hereby created and in the exercise
and performance of any of the powers and duties of the Trustee hereunder, which
amount shall equal one twelfth of the product of (i) the Administrative Fee
Rate, multiplied by (ii) the aggregate Loan Balance of the Mortgage Loans and
any REO Properties as of the second preceding Due Date (or, in the case of the
initial Distribution Date, as of the Cut-off Date). The fee payable to the Trust
Administrator for all services rendered by it in the exercise and performance of
any of the powers and duties of the Trust Administrator hereunder will be paid
by the Trustee out of the Administrative Fee.
"Administrative Fee Rate": 0.007% per annum.
2
"Aggregate Loan Balance": With respect to any date of
determination, the aggregate of the Loan Balances of the Mortgage Loans,
calculated as of such date of determination; provided, however, that the
Aggregate Loan Balance with respect to the Distribution Date on which the
Termination Price is to be paid will be deemed to have been equal to zero as of
the last day of the related Due Period.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Annual Loss Percentage": With respect to any Distribution
Date, a fraction, expressed as a percentage, the numerator of which is the
aggregate of all Realized Losses for the twelve months ending on the last day of
the preceding month and the denominator of which is the Aggregate Loan Balance
of the Mortgage Loans and REO Properties as of the first day of the twelfth
preceding calendar month.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale or transfer of the Mortgage to the assignee thereof (or, if such
sale or transfer is to the Trustee, then to the Trustee for the benefit of
Certificateholders), which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law.
"Available Funds": With respect to any Distribution Date, the
sum of Group I Available Funds and Group II Available Funds.
"Available Funds Shortfall": With respect to any Distribution
Date, an amount equal to the sum of (a) the amount, if any, by which the
aggregate of the Interest Distribution Amounts for such Distribution Date
exceeds the amount available, pursuant to Section 4.04(b) hereof and before
giving effect to any Insured Payment, to pay the Interest Distribution Amounts
for such Distribution Date and (b) the OC Deficit for such Distribution Date.
"Bankruptcy Code": The Bankruptcy Code, as amended (Title 11
to the United States Code).
"BIF": The Bank Insurance Fund of the FDIC.
"Book-Entry Certificates": Any of the Certificates that shall
be registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06 hereof). On the Closing
Date, all of the Offered Certificates shall be Book-Entry Certificates.
3
"Book-Entry Custodian": The custodian appointed pursuant to
Section 5.05.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking or savings institutions in The City of New York, California
or in the city in which the corporate trust offices of the Trustee or the Trust
Administrator is located are authorized or obligated by law or executive order
to be closed.
"Calculation Date": With respect to any Distribution Date, the
first day of the calendar month in which such Distribution Date occurs.
"Call Option Date": The first Distribution Date on which the
Aggregate Loan Balance as of the end of the immediately preceding Due Period is
less than or equal to 10% of the Cut-off Date Pool Balance.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Account": The trust account or accounts created
and maintained by the Trust Administrator pursuant to Section 4.01 hereof which
shall be entitled "Certificate Account, U.S. Bank National Association, as Trust
Administrator for Firstar Bank Milwaukee, N.A., as Trustee, in trust for the
registered Certificateholders of New Century Asset Backed Pass-Through
Certificates, Series 1999-NCB", and which must be an Eligible Account.
"Certificate Group": Either the Group I Certificates or the
Group II Certificates, as the context may require.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Class R
Certificate for any purpose hereof.
"Certificate Insurer": Financial Security Assurance Inc., a
stock insurance company organized and created under the laws of the State of New
York, and any successor thereto.
"Certificate Insurer Default": The existence and continuance
of a failure by the Certificate Insurer to make a payment required under the
Policy in accordance with its terms.
"Certificate Owner": With respect to each Book-Entry
Certificate, any beneficial owner thereof.
"Certificate Principal Balance": With respect to any Regular
Certificate, the product of (i) the Percentage Interest represented by the
related Regular Certificate and (ii) the Class Certificate Principal Balance of
the related Class as of such date of determination.
"Certificate Register": The register maintained pursuant to
Section 5.02 hereof.
4
"Civil Relief Act": The Soldiers' and Sailors' Civil Relief
Act of 1940, as amended.
"Class": Collectively, Certificates which have the same
priority of payment and bear the same class designation and the form of which is
identical except for variation in (i) the Initial Certificate Principal Balance
and (ii) the Percentage Interest evidenced thereby.
"Class A Certificates": Any one of the Class X-0, Xxxxx X-0,
Class A-3, Class A-4, Class A-5, Class A-6 or Class A-7 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed, authenticated and delivered by the Trustee or the Trust
Administrator, representing the right to distributions as set forth herein and
therein, and evidencing an interest designated as a "regular interest" in the
REMIC Trust for purposes of the REMIC Provisions.
"Class A-1 Certificate," "Class A-2 Certificate," "Class A-3
Certificate," "Class A-4 Certificate," "Class A-5 Certificate," "Class A-6
Certificate," "Class A-7 Certificate": Any one of the related Classes of
Certificates as designated on the face thereof substantially in the form annexed
hereto as Exhibit A, executed, authenticated and delivered by the Trustee or the
Trust Administrator, representing the right to distributions as set forth herein
and therein, and evidencing an interest designated as a "regular interest" in
the REMIC Trust for purposes of the REMIC Provisions.
"Class A-6 Priority Distribution Amount": As of any
Distribution Date, the lesser of (a) the product of (x) the Group I Principal
Distribution Amount (plus, without duplication, any amount distributed in
reduction of the Certificate Principal Balances of the Group I Certificates
pursuant to Section 4.04(b)(II)(vii)), (y) the Class A-6 Pro Rata Percentage and
(z) the Shift Percentage and (b) the Group I Principal Distribution Amount
(plus, without duplication, any amount distributed in reduction of the
Certificate Principal Balances of the Group I Certificates pursuant to Section
4.04(b)(II)(vii)).
"Class A-6 Pro Rata Percentage": As of any Distribution Date,
a fraction the numerator of which is the Class Certificate Principal Balance of
the Class A-6 Certificates on such Distribution Date and the denominator of
which is the aggregate of the Class Certificate Principal Balances of all
Classes of Group I Certificates on such Distribution Date.
"Class Certificate Principal Balance": With respect to any
Class of Regular Certificates and any date of determination, the Original Class
Certificate Principal Balance of such Class reduced by the sum of all amounts
actually distributed in respect of principal of such Class on all prior
Distribution Dates.
"Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B, executed, authenticated and delivered by the Trustee or the Trust
Administrator, representing the right to distributions as set forth herein and
therein.
"Closing Date": September 28, 1999.
5
"Code": The Internal Revenue Code of 1986 as it may be amended
from time to time.
"Collection Account": The account or accounts created and
maintained pursuant to Section 3.10(a) hereof, which shall be entitled
"Collection Account, U.S. Bank National Association, as Trust Administrator for
Firstar Bank Milwaukee, N.A., as Trustee, in trust for the registered
Certificateholders of New Century Home Equity Loan Certificates, Series
1999-NCB", and which must be an Eligible Account.
"Corporate Trust Office": The principal corporate trust office
of the Trust Administrator or the Trustee at which at any particular time its
corporate trust business with respect to the Certificates shall be administered,
which office (a) in the case of the Trust Administrator is located at 000 Xxxx
Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance/New
Century 1999-NCB, or at such other address as the Trust Administrator may
designate from time to time by notice to the Certificateholders, the Depositor,
the Master Servicer, the Trustee and the Certificate Insurer and (b) in the case
of the Trustee is located at 0000 X. Xxxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, or such other address as the Trustee may designate from time to time by
notice to the Certificateholders, the Depositor, the Master Servicer, the Trust
Administrator and the Certificate Insurer.
"Cram Down Loss": With respect to a Mortgage Loan, the amount
of reduction of such Mortgage Loan's Loan Balance resulting from an order issued
by a court of appropriate jurisdiction in an insolvency proceeding. A "Cram Down
Loss" shall be deemed to have occurred on the date of issuance of such order.
"Cumulative Loss Percentage": As of any Distribution Date, the
fraction, expressed as a percentage, whose numerator is the aggregate of all
Realized Losses during the period beginning with the Startup Date and ending on
the last day of the calendar month preceding such Distribution Date and whose
denominator is the Cut-off Date Pool Balance.
"Cut-off Date": With respect to any Mortgage Loan other than a
Qualified Substitute Mortgage Loan, the later of (i) the date of origination of
such Mortgage Loan or (ii) the close of business on September 1, 1999. With
respect to any Qualified Substitute Mortgage Loan, the date designated as such
on the Mortgage Loan Schedule (as amended).
"Cut-off Date Loan Balance": As to any Mortgage Loan, the
outstanding, unpaid principal balance thereof as of the close of business on the
applicable Cut-off Date after giving effect to all scheduled principal payments
due, whether or not received, on or prior to the related Cut-off Date.
"Cut-off Date Loan Group Balance": With respect to each Loan
Group, the aggregate of the Cut-off Date Loan Balances of the Mortgage Loans in
such Loan Group.
6
"Cut-off Date Pool Balance": The aggregate of the Cut-off Date
Loan Balances of the Mortgage Loans.
"Definitive Certificates": As defined in Section 5.05 hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Qualified Substitute Mortgage Loans.
"Delinquency Advance": As defined in Section 4.06(b) hereof.
"Delinquency Percentage": With respect to any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
Aggregate Loan Balance of all Mortgage Loans that are 60 or more days
Delinquent, in foreclosure or relating to REO Properties as of the close of
business on the last day of the preceding calendar month, and the denominator of
which is the Aggregate Loan Balance of the Mortgage Loans as of the close of
business on the last day of the preceding calendar month.
"Delinquency Statistic Date": September 1, 1999.
"Delinquent": A Mortgage Loan is "Delinquent" if any Monthly
Payment due thereon is not made by the close of business on the day such Monthly
Payment is scheduled to be due. A Mortgage Loan is "30 days Delinquent" if such
Monthly Payment has not been received by the close of business on the
corresponding day of the month immediately succeeding the month in which such
Monthly Payment was due, or, if there is no such corresponding day (e.g., as
when a 30- day month follows a 31-day month in which a payment was due on the
31st day of such month) then on the last day of such immediately succeeding
month, and similarly for "60 days Delinquent," "90 days Delinquent" and so on.
"Depositor": New Century Mortgage Securities, Inc., a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository
Trust Company, whose nominee is Cede & Co., or any other organization registered
as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry
Certificates, the agreement among the Depositor, the Trust Administrator and the
initial Depository, to be dated on or about September 28, 1999.
7
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Distribution Date,
the close of business on the fifteenth day of the calendar month in which such
Distribution Date occurs or, if such fifteenth day is not a Business Day, the
close of business on the Business Day immediately preceding such fifteenth day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Disqualified Organization": Any of the following: (i) the
United States, any State or political subdivision thereof, any possession of the
United States, or any agency or instrumentality of any of the foregoing (other
than an instrumentality which is a corporation if all of its activities are
subject to tax and, except for Xxxxxxx Mac, a majority of its board of directors
is not selected by such governmental unit), (ii) any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income), (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code and (v) any other
Person so designated by the Trustee or the Trust Administrator based upon an
Opinion of Counsel that the holding of an ownership interest in a Class R
Certificate by such Person may cause the Trust Estate or any Person having an
ownership interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the transfer of an ownership interest in a Class R
Certificate to such Person. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
"Distribution Date": The 25th day of any calendar month, or if
such 25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in October 1999.
"Due Date": With respect to each Mortgage Loan, the day of the
calendar month on which the Monthly Payment for such Mortgage Loan was due,
exclusive of any days of grace.
8
"Due Period": With respect to any Distribution Date, the
period beginning on the second day of the calendar month preceding the calendar
month in which such Distribution Date occurs, and ending on the first day of the
calendar month in which such Distribution Date occurs.
"Eligible Account": Either (A) a segregated account or
accounts maintained with an institution whose deposits are insured by the BIF or
the SAIF of the FDIC, the unsecured and uncollateralized long-term debt
obligations of which shall be rated "A" or better by S&P and "A2" or better by
Moody's or the short-term debt obligations of which shall be rated "P-1" by
Moody's and in one of S&P's two highest short-term rating categories by S&P, and
which is any of (i) a federal savings association duly organized, validly
existing and in good standing under the federal banking laws, (ii) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (iii) a national banking association duly
organized, validly existing and in good standing under the federal banking laws,
(iv) a principal subsidiary of a bank holding company and (v) approved in
writing by the Certificate Insurer or (B) a segregated trust account maintained
with the trust department of a federal or state chartered depository institution
or trust company, having capital and surplus of not less than $100,000,000,
acting in its fiduciary capacity. Any Eligible Account maintained by the Trustee
or the Trust Administrator shall comply with the provisions of clause (B)
hereof.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"Estate in Real Property": A fee simple estate or a leasehold
estate in a parcel of real property.
"Xxxxxx Xxx": Federal National Mortgage Association or any
successor thereto.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"Final Recovery Determination": A determination by the Master
Servicer with respect to any defaulted Mortgage Loan or REO Property (other than
a Mortgage Loan purchased or replaced by the Seller or the Master Servicer
pursuant to Section 2.06 or 3.15(c) hereof) that all Net Recovery Proceeds and
other payments or recoveries that the Master Servicer, in its reasonable
judgment, expects to be finally recoverable have been recovered or that the
Master Servicer, in its reasonable judgment as evidenced by an Officers'
Certificate which accompanies the related Liquidation Report in the form of
Exhibit G hereto, believes the cost of obtaining any additional recoveries would
exceed the amount of such recoveries. The Master Servicer shall maintain
records, prepared by a Servicing Officer, of each Final Recovery Determination.
"First Lien": With respect to any Second Mortgage Loan, the
mortgage loan relating to the corresponding Mortgaged Property having a first
priority lien.
"First Mortgage Loan": Any Mortgage Loan that is secured by a
first lien on or first priority security interest in the related Mortgaged
Property.
9
"Xxxxxxx Mac": Federal Home Loan Mortgage Corporation or any
successor thereto.
"Group I Available Funds": With respect to any Distribution
Date, the sum of all amounts on deposit in the Certificate Account on such
Distribution Date that are attributable to Loan Group I and are available after
giving effect to the distributions set forth in Section 4.04(a)(i) and (ii).
"Group I Basic Principal Distribution Amount": With respect to
the Group I Certificates and any Distribution Date, the excess of (i) the
related Principal Remittance Amount for such Distribution Date over (ii) the
related OC Release Amount, if any, for such Distribution Date.
"Group I Certificates": The Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5 and Class A-6 Certificates.
"Group I Extra Principal Distribution Amount": With respect to
the Group I Certificates and any Distribution Date, the lesser of (x) the Group
I General Excess Available Amount for such Distribution Date and (y) the related
OC Deficiency Amount for such Distribution Date.
"Group I General Excess Available Amount": With respect to the
Group I Certificates and each Distribution Date, the amount, if any, by which
the related Available Funds for such Distribution Date exceeds the aggregate
amount distributed on such Distribution Date pursuant to subclauses (i) through
(v) of clause I under Section 4.04(b).
"Group I Loan Balance": As of any date, the aggregate of the
Loan Balances of all Mortgage Loans in Loan Group I as of such date.
"Group I Mortgage Loan": A Mortgage Loan that is identified as
such on the Mortgage Loan Schedule.
"Group I Principal Distribution Amount": With respect to
Group I Certificates, and any Distribution Date (other than the final
Distribution Date), the sum of (i) the Group I Basic Principal Distribution
Amount and (ii) the Group I Extra Principal Distribution Amount.
"Group II Available Funds": With respect to any Distribution
Date, the sum of all amounts on deposit in the Certificate Account on such
Distribution Date that are attributable to Loan Group II and are available after
giving effect to the distributions set forth in Section 4.04(a)(i) and (ii).
"Group II Basic Principal Distribution Amount": With respect
to the Group II Certificates and any Distribution Date, the excess of (i) the
related Principal Remittance Amount for such Distribution Date over (ii) the
related OC Release Amount, if any, for such Distribution Date.
"Group II Certificates": The Class A-7 Certificates.
10
"Group II Extra Principal Distribution Amount": With respect
to the Group II Certificates and any Distribution Date, the lesser of (x) the
Group II General Excess Available Amount for such Distribution Date and (y) the
related OC Deficiency Amount for such Distribution Date.
"Group II General Excess Available Amount": With respect to
the Group II Certificates and each Distribution Date, the amount, if any, by
which the related Available Funds for such Distribution Date exceeds the
aggregate amount distributed on such Distribution Date pursuant to subclauses
(i) through (v) of clause II under Section 4.04(b).
"Group II Loan Balance": As of any date, the aggregate of the
Loan Balances of all Mortgage Loans in Loan Group II as of such date.
"Group II Mortgage Loan": A Mortgage Loan that is identified
as such on the Mortgage Loan Schedule.
"Group II Principal Distribution Amount": With respect to the
Group II Certificates and any Distribution Date (other than the final
Distribution Date), the sum of (i) the Group II Basic Principal Distribution
Amount and (ii) the Group II Extra Principal Distribution Amount.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Depositor, the Master
Servicer, the Subservicer and the Underwriters, (ii) does not have any direct
financial interest or any material indirect financial interest in the Depositor,
the Master Servicer, the Underwriters, the Subservicer or in any affiliate of
any of them, and (iii) is not connected with the Depositor, the Master Servicer,
the Subservicer or the Underwriters as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
"Independent Contractor": Either (i) any Person (other than
the Master Servicer and the Depositor) that would be an "independent contractor"
with respect to the Trust within the meaning of Section 856(d)(3) of the Code if
the Trust were a real estate investment trust (except that the ownership tests
set forth in that section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of Certificates), so
long as the Trust does not receive or derive any income from such Person and
provided that the relationship between such Person and the Trust is at arm's
length, all within the meaning of Treasury Regulation Section 1.856- 4(b)(5), or
(ii) any other Person (including the Master Servicer and the Depositor), if the
Trustee, the Trust Administrator and the Certificateholders have each received
an Opinion of Counsel to the effect that the taking of any action in respect of
any REO Property by such Person, subject to any conditions therein specified,
that is otherwise herein contemplated to be taken by an Independent Contractor
will not cause such REO Property to cease to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (determined without regard
to the exception applicable for purposes of Section 860D(a) of the Code), or
cause any income realized in respect of such REO Property to fail to qualify as
Rents from Real Property.
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"Initial Certificate Principal Balance": With respect to any
Regular Certificate, the amount so indicated on the face thereof.
"Insurance Agreement": The Insurance and Indemnity Agreement
dated as of September 28, 1999 among the Certificate Insurer, the Depositor, the
Seller and New Century.
"Insurance Premium": With respect to any Distribution Date,
the product of (x) the aggregate Class Certificate Principal Balance of all
Classes of Offered Certificates, after taking into account all distributions to
be made on such Distribution Date, and (y) one-twelfth of the Premium Rate.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Master Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with Accepted Servicing Procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Insured Distribution Amount": With respect to any
Distribution Date, the sum of (i) the aggregate of the Interest Distribution
Amounts and (ii) the OC Deficit, if any for such Distribution Date.
"Insured Payment": As of any Distribution Date, any Available
Funds Shortfall.
"Interest Determination Date": With respect to the Class A-1
Certificates and each Accrual Period after the initial Accrual Period, the
second LIBOR Business Day preceding the commencement of such Accrual Period.
"Interest Distribution Amount": With respect to any
Distribution Date and any Class of Offered Certificates, the interest accrued
during the related Accrual Period on the related Class Certificate Principal
Balance at the related Pass-Through Rate (less the sum of any Prepayment
Interest Shortfalls not covered by the Servicing Fee and any shortfalls in
interest resulting from the application of the Civil Relief Act in each case
that are allocable to such Class), plus any Interest Distribution Amount for
that Class remaining unpaid from the previous Distribution Date.
"Interest Remittance Amount": With respect to a Loan Group and
any Distribution Date and related Master Servicer Remittance Date, the aggregate
amount of all scheduled interest payments due on the Mortgage Loans in the
related Loan Group during the related Due Period (other than any Retained
Interest), which were either collected or advanced, net of the related Servicing
Fee thereon, plus the aggregate amount of the Prepayment Interest Shortfalls
resulting from Principal Prepayments during the related Prepayment Period to the
extent required to be paid by the Master Servicer pursuant to Section 3.23.
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"Late Collection": With respect to any Mortgage Loan and the
Monthly Payment due thereon during any Due Period, all amounts received
subsequent to the Determination Date immediately following such Due Period,
whether as a late payment of such Monthly Payment or as Insurance Proceeds,
Liquidation Proceeds or otherwise, which represent the late payment or
collection of such Monthly Payment.
"Late Payment Rate": For any date of determination, the lesser
of (i) the greater of (a) the highest rate of interest on any outstanding Class
of Certificates, and (b) the rate of interest set forth in the Eastern Edition
of The Wall Street Journal in its "Money Rates" section as the "prime rate" on
the first Business Day preceding such date of determination that such rate is so
published plus 2% and (ii) the maximum rate permissible under any applicable law
limiting interest rates. The Late Payment Rate shall be computed on the basis of
a year of 360 days calculating the actual number of days elapsed.
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds) received by the Master Servicer or Subservicer in connection with (i)
the taking of all or a part of a Mortgaged Property by exercise of the power of
eminent domain or condemnation or (ii) the liquidation of a defaulted Mortgage
Loan through a trustee's sale, foreclosure sale, REO Disposition or otherwise.
"Liquidation Report": The report in the form of Exhibit G
annexed hereto delivered by the Master Servicer pursuant to Section 3.15(e)
hereof.
"Loan Balance": With respect to each Mortgage Loan and any
date of determination, the Cut-off Date Loan Balance of such Mortgage Loan minus
all payments of scheduled principal due on or prior to such date of
determination, to the extent received or advanced, and all payments of
unscheduled principal received prior to the month of such date of determination,
minus the aggregate amount of any Cram Down Losses relating to such principal
balance and allocated thereto prior to such date; provided, however, that the
Loan Balance for any Mortgage Loan for which a Final Recovery Determination has
been made shall be zero as of the end of the month in which such Final Recovery
Determination was made, and at all times thereafter.
"Loan-to-Value Ratio": With respect to any Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Loan Balance
of the related Mortgage Loan on the date of origination of such Mortgage Loan or
the Loan Balance of such Mortgage Loan at the time of purchase of such Mortgage
Loan by the Depositor, plus, in the case of a Second Mortgage Loan, the
outstanding principal balance of the related First Lien on such date of
origination or purchase, as the case may be, of the Mortgage Loan, and the
denominator of which is the Value of the related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the
context may require.
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"Loan Group Balance": Either the Group I Loan Balance or the
Group II Loan Balance, as the context may require.
"Loan Group I": At any time, the Group I Mortgage Loans in the
aggregate.
"Loan Group II": At any time, the Group II Mortgage Loans in
the aggregate.
"Majority Certificateholders": The Holders of Certificates
evidencing at least 51% of the Voting Rights.
"Majority Class R Certificateholders": The Holders of Class R
Certificates evidencing at least a 51% Percentage Interest in the Class R
Certificates.
"Master Servicer": New Century Mortgage Corporation, a
corporation organized under the laws of the State of California, or its
successor in interest, in its capacity as servicer of the Mortgage Loans, which
term shall also include any successor servicer appointed hereunder.
"Master Servicer Default": One or more of the events described
in Section 7.01 hereof.
"Master Servicer Information": Any information contained in a
Liquidation Report.
"Master Servicer Loss Test": With respect to any Distribution
Date, a test that is satisfied if the Cumulative Loss Percentage for such
Distribution Date does not exceed the percentage below that corresponds to the
period (including the beginning and ending dates thereof) in which the last day
of the calendar month preceding such Distribution Date falls:
Period Cumulative Loss
------ Percentage
----------
September 1, 1999 - August 31, 2000 1.25%
September 1, 2000 - August 31, 2001 2.25%
September 1, 2001 - August 31, 2002 2.50%
September 1, 2002 - August 31, 2003 2.85%
September 1, 2003 and thereafter 3.45%
"Master Servicer Remittance Date": With respect to any
Distribution Date, the 18th day of the month of such Distribution Date (or, if
such day is not a Business Day, the next following Business Day).
"Master Servicer Termination Test": With respect to any
Distribution Date, a test which is satisfied if (x) the related Rolling
Delinquency Percentage is less than 14.0%, (y) the Master Servicer Loss Test for
such Distribution Date is satisfied and (z) the related Annual Loss Percentage
is not greater than 1.50%.
14
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by a Mortgagor from time to time under the related Mortgage Note,
determined after giving effect to any reduction in the amount of interest
collectible from the related Mortgagor as a result of the application of the
Civil Relief Act.
"Moody's": Xxxxx'x Investors Service, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors, and, if such corporation shall for any reason no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer to
any other "nationally recognized rating organization," as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission and designated by the Certificate Insurer, notice of which
designation shall be given to the Trustee, the Trust Administrator and the
Master Servicer by the Certificate Insurer.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on or first priority security interest in, or, a second
lien on or second priority security interest in, a Mortgaged Property securing a
Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.04
hereof pertaining to a particular Mortgage Loan and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan sold, transferred and
assigned to the Trustee and delivered to the Trust Administrator pursuant to
Section 2.02 and Section 2.06 hereof as from time to time is held as a part of
the Trust Estate, the Mortgage Loans so held being identified in the Mortgage
Loan Schedule. Any mortgage loan which, although intended by the parties hereto
to have been, and which purportedly was, sold to the Trustee by the Depositor
(as indicated by Exhibit L), that in fact was not transferred and assigned to
the Trustee and delivered to the Trust Administrator for any reason whatsoever,
shall nevertheless be considered a "Mortgage Loan" for all purposes of this
Agreement. As applicable, "Mortgage Loan" shall be deemed to refer to the
related REO Property.
"Mortgage Loan Purchase Agreement": The mortgage loan purchase
agreement, dated September 24, 1999, between the Seller and the Depositor, a
form of which is attached hereto as Exhibit C.
"Mortgage Loan Schedule": As of any date, the list of Mortgage
Loans included in the Trust on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Exhibit L (as
such list may be amended from time to time), which list shall set forth the
following information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name;
15
(iii) the street address of the Mortgaged Property,
including the city, state and five-digit ZIP code;
(iv) the type of Mortgaged Property;
(v) the Mortgage Rate;
(vi) the occupancy status;
(vii) the original term to stated maturity;
(viii) as of the Cut-off Date, the remaining number
of months to stated maturity;
(ix) the original principal balance;
(x) as of the Delinquency Statistic Date, the
paid through date;
(xi) the amount of the Monthly Payment;
(xii) the Cut-off Date Loan Balance;
(xiii) the Loan-to-Value Ratio;
(xiv) the stated maturity date;
(xv) the Due Date;
(xvi) the Value, if available;
(xvii) the lien priority of the Mortgage Loan;
(xviii) the first payment date;
(xix) the purpose of the Mortgage Loan, if
available;
(xx) whether the original Loan Balance of such
Mortgage Loan conforms to Xxxxxxx Mac and Xxxxxx Mae guidelines; and
(xxi) New Century's loan grade.
Such schedule shall also set forth the total of the amounts described under
(xii) above for all of the Mortgage Loans as of the specified date. Such
schedule may be in the form of more than one list,
16
which list or lists may have one or more attachments, collectively setting forth
all of the information required. Such list of information contained in a
Mortgage Loan Schedule shall also be provided to the Trustee and the Trust
Administrator in a computer-readable format on a tape or disk. The Mortgage Loan
Schedule shall be amended from time to time by the Trust Administrator in
accordance with Sections 2.06 and 2.12 hereof. With respect to any Qualified
Substitute Mortgage Loan, the amounts described in clauses (viii) and (xii),
shall also be set forth as of the date of substitution.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan (subject to any
reduction in such rate resulting from an order issued by a court of appropriate
jurisdiction in an insolvency proceeding), as provided in the related Mortgage
Note and as shown or described on the Mortgage Loan Schedule.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Net Mortgage Rate": With respect to each Mortgage Loan, a
rate of interest per annum equal to the Mortgage Rate minus the Servicing Fee
Rate.
"Net Recovery Proceeds": The amount of any gross Insurance
Proceeds or Liquidation Proceeds received with respect to any Mortgage Loan
minus the sum of (i) all unreimbursed Servicing Advances and Delinquency
Advances, if any, with respect to such Mortgage Loan, (ii) without duplication,
all accrued and unpaid Servicing Fees, if any, and (iii) without duplication,
liquidation expenses.
"Net WAC Cap": With respect to any Distribution Date and
Certificate Group, an amount equal to (A) the average of the Mortgage Rates of
the Related Loan Group as of the first day of the month preceding the month of
such Distribution Date (or, in the case of the first Distribution Date, the
Closing Date), weighted on the basis of the related Loan Balances as of the
first day of the related Prepayment Period (after application of scheduled
payments due on such day whether or not received), minus (B) the sum of (i) the
Servicing Fee Rate, (ii) the Administrative Fee Rate and (iii) the product of
(x) the Premium Rate and (y) a fraction, the numerator of which is the aggregate
Certificate Principal Balance of the Certificates in such Certificate Group
immediately prior to such Distribution Date and the denominator of which is the
aggregate outstanding Loan Balance of the Mortgage Loans in the related Loan
Group as of the first day of the month preceding the month of such Distribution
Date (after application of scheduled payments due on such day whether or not
received).
17
Notwithstanding the foregoing, Net WAC Cap for purposes of calculating
the Pass-Through Rate on the Class A-1 Certificates for any Distribution Date is
an amount equal to (i) the Net WAC Cap for Certificate Group I calculated as
provided above, multiplied by (ii) a fraction, the numerator of which is 30 and
the denominator of which is the actual number of days elapsed in the related
Accrual Period.
"New Century": New Century Mortgage Corporation, a corporation
organized under the laws of the State of California, or its successor in
interest, in its capacity as the Originator of the Mortgage Loans.
"New Lease": Any lease of REO Property entered into on behalf
of the Trust, including any lease renewed or extended on behalf of the Trust if
the Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Delinquency Advance": Any Delinquency Advance
(x) previously made and not previously reimbursed to the Master Servicer or (y)
proposed to be made in respect of a Mortgage Loan or REO Property that the
Master Servicer determines will not, or, in the case of a proposed Delinquency
Advance, would not, be recovered from Late Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property.
"Nonrecoverable Servicing Advance": Any Servicing Advance (x)
previously made and not previously reimbursed to the Master Servicer or (y)
proposed to be made in respect of a Mortgage Loan or REO Property that the
Master Servicer determines will not, or, in the case of a proposed Servicing
Advance, would not, be recovered from Late Collections, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property.
"Notice": As defined in Section 4.02.
"OC Deficiency Amount": With respect to any Distribution Date
and each Certificate Group, the amount, if any, by which the related OC Target
Amount exceeds the related Overcollateralized Amount on such Distribution Date
(after giving effect to distributions in respect of the Group I Basic Principal
Distribution Amount or the Group II Basic Principal Distribution Amount, as
applicable, on such Distribution Date).
"OC Deficit": With respect to any Distribution Date, the
amount by which (a) the aggregate Class Certificate Principal Balance of all
Classes of Offered Certificates (after giving effect to all distributions to be
made thereon on such Distribution Date other than any portion thereof consisting
of an Insured Payment in respect of an OC Deficit) exceeds (b) the Aggregate
Loan Balance on the last day of the immediately preceding Due Period.
"OC Release Amount": With respect to each Certificate Group
and any Distribution Date, the lesser of (x) the related Principal Remittance
Amount for such Distribution Date and (y) the excess, if any, of (i) the related
Overcollateralized Amount for such Distribution Date, assuming that 100% of the
related Principal Remittance Amount is applied as a principal payment on the
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related Certificate Group on such Distribution Date over (ii) the related OC
Target Amount for such Distribution Date.
"OC Stepdown Date": The later to occur of (x) the Distribution
Date in April 2002 and (y) the first distribution date on which the Aggregate
Loan Balance of all of the Mortgage Loans has been reduced to 50% of the Cut-off
Date Pool Balance.
"OC Target Amount": With respect to any Distribution Date and
either Certificate Group, an amount equal to the product of
(i) the greater of (a) one-half of the aggregate of the Loan Balances
of the Mortgage Loans that are 90 days Delinquent, in foreclosure or
reduced to REO Property, minus the product of (1) two and (2) the sum
of the Group I General Excess Available Amount and the Group II General
Excess Available Amount and (b) 3.95% of the Cut-off Date Pool Balance,
plus, in the case of (a) and (b), the Spread Squeeze Amount, if any,
and
(ii) the OC Target Fraction for such Certificate Group for such
Distribution Date,
subject to the following:
(A) if the Step Up Trigger has occurred, the OC Target Amount
with respect to each Certificate Group for such Distribution
Date will be calculated as set forth above, except that the
amount in clause (i)(a) above shall be multiplied by two, and
(B) if the Step Down Trigger has occurred, the OC Target
Amount with respect to each Certificate Group for such
Distribution Date will be an amount equal to the product of
(I) the greater of (1) the greater of (x) 0.50% of
the Cut-off Date Pool Balance and (y) the aggregate
Loan Balance, as of such Distribution Date, of the
three largest outstanding Mortgage Loans and (2) the
lesser of (x) the amount calculated pursuant to
clause (i) above and (y) the Stepped Down Required
Overcollateralized Amount for such Distribution Date
and
(II) the OC Target Fraction for such Certificate
Group for such Distribution Date.
"OC Target Fraction": With respect to any Distribution Date
and either Certificate Group prior to the OC Stepdown Date, the related Cut-off
Date Loan Group Balance divided by the Cut-off Date Pool Balance. With respect
to any Distribution Date and either Certificate Group on or after the OC
Stepdown Date, the related Loan Group Balance divided by the Aggregate Loan
Balance.
19
"Offered Certificates": The Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6 and Class A-7 Certificates.
"Officers' Certificate": With respect to the Depositor or the
Master Servicer, a certificate signed by the Chairman of the Board, the
President or a Vice President (however denominated), and by the Treasurer, the
Secretary, an assistant treasurer or an assistant secretary (however
denominated) of the Depositor or the Master Servicer, as the case may be.
"One-Month LIBOR": With respect to any Distribution Date after
the first Distribution Date and the related Accrual Period for the Class A-1
Certificates, will equal the interbank offered rate for one-month United States
dollar deposits in the London market as quoted on Telerate Page 3750 as of 11:00
A.M., London time, on the related Interest Determination Date. "Telerate Page
3750" means the display designated as page 3750 on the Telerate Service (or such
other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying LIBOR or comparable rates as may be selected by the Trust
Administrator after consultation with the Master Servicer), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis
of the rates at which deposits in U.S. dollars are offered by the reference
banks (which shall be three major banks that are engaged in transactions in the
London interbank market, selected by the Trust Administrator after consultation
with the Master Servicer) as of 11:00 A.M., London time, on the applicable
Interest Determination Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A-1 Certificates. The Trust Administrator will
request the principal London office of each of the reference banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
will be the arithmetic mean of the quotations. If on such date fewer than two
quotations are provided, the rate will be the arithmetic mean of the rates
quoted by one or more major banks in New York City, selected by the Trust
Administrator after consultation with the Master Servicer, as of 11:00 A.M., New
York City time, on such date for loans in U.S. dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A-1 Certificates. If no such
quotations can be obtained, the rate will be equal to One-Month LIBOR for the
prior Distribution Date; provided that if One-Month LIBOR for an Accrual Period
would be based on One-Month LIBOR for the previous Accrual Period for three
consecutive Accrual Periods, then the Trust Administrator shall select a
comparable alternative index (over which the Trust Administrator has no control)
used for determining one-month Eurodollar lending rates that is calculated and
published (or otherwise made available) by an independent third party.
With respect to the first Distribution Date and the related Accrual
Period for the Class A-1 Certificates, 5.381% per annum.
"Opinion of Counsel": A written opinion of counsel, who
(unless such Opinion of Counsel is required to be an Independent Opinion of
Counsel) may be counsel for the Depositor, the Trustee, the Trust Administrator,
the Master Servicer or the Certificate Insurer (including, except
20
as otherwise expressly provided in this Agreement, the in-house general counsel
for the Master Servicer, the Depositor, the Trustee, the Trust Administrator,
any Certificateholder or the Certificate Insurer, as the case may be), and who
shall be reasonably acceptable to the parties to which such opinion is
addressed; except that any opinion of counsel relating to (a) qualification of
the Trust as a REMIC or compliance with the REMIC Provisions must be an opinion
of counsel who is a tax counsel experienced in REMIC matters, and (b) the
qualification of any account required to be maintained pursuant to this
Agreement as an Eligible Account or the resignation of the Master Servicer
pursuant to 6.04 hereof must be delivered by an Independent counsel who is
counsel experienced in federal income tax matters.
"Order": As defined in Section 4.02(e).
"Original Class Certificate Principal Balance": With respect
to the Classes of Regular Certificates listed below, the corresponding amounts
set forth opposite such Class:
Class A-1: $125,412,315
Class A-2: $ 56,000,000
Class A-3: $ 54,550,000
Class A-4: $ 59,090,000
Class A-5: $ 24,609,855
Class A-6: $ 35,000,000
Class A-7: $ 63,994,483
"OTS": The Office of Thrift Supervision or any successor.
"Overcollateralized Amount": For any Distribution Date and
each Certificate Group, the amount (which may be negative) by which (i) the
Related Loan Group Balance on the last day of the immediately preceding Due
Period exceeds (ii) the aggregate of the Class Certificate Principal Balances of
such Certificate Group as of such Distribution Date after giving effect to
distribution of the Group I Basic Principal Distribution Amount or Group II
Basic Principal Distribution Amount, as applicable, to be made thereon on such
Distribution Date.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee
"Pass-Through Rate": As to each Class A-1 Certificate and any
Distribution Date, the rate per annum equal to the lesser of (a) One-Month LIBOR
plus 0.25% and (b) the related Net WAC Cap.
As to each Class A-2 Certificate and any Distribution Date, 7.090% per
annum.
As to each Class A-3 Certificate and any Distribution Date, 7.190% per
annum.
21
As to each Class A-4 Certificate and any Distribution Date (a) if such
Distribution Date is on or prior to the Call Option Date, the lesser of (x)
7.530% per annum and (y) the related Net WAC Cap or (b) if such Distribution
Date is after the Call Option Date, the lesser of (x) 8.030% per annum and (y)
the related Net WAC Cap.
As to each Class A-5 Certificate and any Distribution Date (a) if such
Distribution Date is on or prior to the Call Option Date, the lesser of (x)
7.830% per annum and (y) the related Net WAC Cap or (b) if such Distribution
Date is after the Call Option Date, the lesser of (x) 8.330% per annum and (y)
the related Net WAC Cap.
As to each Class A-6 Certificate and any Distribution Date (a) if such
Distribution Date is on or prior to the Call Option Date, the lesser of (x)
7.390% per annum and (y) the related Net WAC Cap or (b) if such Distribution
Date is after the Call Option Date, the lesser of (x) 7.890% per annum and (y)
the related Net WAC Cap.
As to each Class A-7 Certificate and any Distribution Date (a) if such
Distribution Date is on or prior to the Call Option Date, the lesser of (x)
7.540% per annum and (y) the related Net WAC Cap or (b) if such Distribution
Date is after the Call Option Date, the lesser of (x) 8.040% per annum and (y)
the related Net WAC Cap.
"Percentage Interest": With respect to any Certificate (other
than a Class R Certificate), a fraction, expressed as a percentage, the
numerator of which is the Initial Certificate Principal Balance represented by
such Certificate and the denominator of which is the Original Class Certificate
Principal Balance of the related Class. With respect to a Class R Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as stated
on the face of such Certificate; provided, however, that the sum of all such
percentages for the Class R Certificates totals 100%.
"Permitted Investments": As used herein, Permitted Investments
shall include the following:
(i) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and interest
by, the United States or any agency or instrumentality thereof, provided such
obligations are backed by the full faith and credit of the United States,
Federal Housing Administration debentures, Xxxxxxx Mac senior debt obligations,
and Xxxxxx Mae senior debt obligations, but excluding any of such securities
whose terms do not provide for payment of a fixed dollar amount upon maturity or
call for redemption;
(ii) federal funds, certificates of deposit, time and demand deposits
and banker's acceptances (in each case having original maturities of not more
than 365 days) of any bank or trust company incorporated under the laws of the
United States or any state thereof, provided that the short-term debt
obligations of such bank or trust company at the date of acquisition thereof
have been rated "A-1+" by S&P and "Prime-1" or better by Xxxxx'x;
22
(iii) deposits of any bank or savings association which has combined
capital, surplus and undivided profits of at least $100,000,000 which deposits
are held up to the applicable limits insured by the BIF or the SAIF of the FDIC
and a rating, with respect to its long-term, unsecured debt obligations, of "A"
or better by S&P and "A2" or better by Xxxxx'x;
(iv) commercial paper (having original maturities of not more than 180
days) rated "A- 1+" by S&P and "Prime-1" or better by Xxxxx'x;
(v) investments in money market funds rated "AAAm" or "AAAm-G" by S&P
and "Aaa" by Xxxxx'x;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to obligations underlying
such instrument or (b) both principal and interest payments derived from
obligations underlying such instrument and the interest and principal payments
with respect to such instrument provide a yield to maturity at par greater than
120% of the yield to maturity at par of the underlying obligations; and
provided, further, that no instrument described hereunder may be purchased at a
price greater than par if such instrument may be prepaid or called at a price
less than its purchase price prior to stated maturity. Permitted Investments
shall mature not later than the Business Day prior to the earliest date on which
such monies may be needed to make payments..
"Permitted Transferee": Any United States Person other than a
Disqualified Organization or an "electing large partnership" as defined in
Section 775 of the Code.
"Person": Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Policy": The Financial Guaranty Insurance Policy No. 50860-N
and all endorsements thereto, dated the Closing Date, issued by the Certificate
Insurer to the Trustee for the benefit of the Holders of the Offered
Certificates, in the form attached hereto as Exhibit K.
"Policy Payments Account": As defined in Section 4.02(b)
hereof.
"Preference Amount": Any amount previously distributed to the
Offered Certificates that is avoided as a preference pursuant to a final,
non-appealable order of a court of competent jurisdiction under applicable
bankruptcy, insolvency, receivership or similar law and that has been recovered,
or is sought to be recovered from the related Certificateholder by the receiver,
conservator, debtor-in-possession or trustee in bankruptcy, as the case may be.
"Premium Letter": The side letter among the Certificate
Insurer, the Depositor and New Century, dated the Closing Date.
23
"Premium Rate": The rate set forth in the Premium Letter, plus
the rate at which any Premium Supplement (as defined in the Insurance Agreement)
is due.
"Prepayment Assumption": As defined in the Prospectus
Supplement.
"Prepayment Charge": With respect to any Prepayment Period,
any prepayment premium, penalty or charge payable by a Mortgagor in connection
with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the
related Mortgage Note.
"Prepayment Charge Schedule": As of any date, the list of
Prepayment Charges on the Mortgage Loans included in the Trust Estate on such
date, attached hereto as Exhibit M (including the Prepayment Charge Summary
attached thereto). The Prepayment Charge Schedule shall set forth the following
information with respect to each Prepayment Charge:
(i) the Mortgage Loan identifying number;
(ii) a code indicating the type of Prepayment Charge;
(iii) the state of origination of the related Mortgage
Loan;
(iv) the date on which the first monthly payment was due
on the related Mortgage Loan;
(v) the term of the related Mortgage Loan; and
(vi) the principal balance of the related Mortgage Loan as
of the Cut-off Date.
"Prepayment Interest Shortfall": With respect to any Master
Servicer Remittance Date, for each Mortgage Loan that was the subject during the
preceding calendar month of a Principal Prepayment, an amount equal to the
excess, if any, of (i) a full month's interest on the amount of such Principal
Prepayment at a rate per annum equal to the Mortgage Rate (or at such lower rate
as may be in effect for such Mortgage Loan pursuant to application of the Civil
Relief Act) minus the Servicing Fee Rate over (ii) the amount of interest
actually remitted by the Mortgagor in connection with such Principal Prepayment
less the Servicing Fee for such Mortgage Loan in such month.
"Prepayment Period": With respect to any Distribution Date,
the calendar month preceding the calendar month in which such Distribution Date
occurs.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the full
amount of scheduled interest due on any Due Date subsequent to the prepayment.
24
"Principal Remittance Amount": With respect to each Loan Group
and any Distribution Date, an amount equal to the sum of the amount specified in
Section 3.10(a)(i) and the principal portion of the amounts specified in Section
3.10(a)(iii), (a)(vi), (a)(vii), (a)(ix) and (a)(x) that are attributable to the
Mortgage Loans in such Loan Group, in the case of the amounts specified in
Section 3.10(a)(i)(A) and (a)(ix), to the extent these amounts relate to
scheduled principal payments due during the related Due Period, or any prior Due
Period for which there was no related Delinquency Advance, and in each other
case, to amounts representing principal that is actually received during the
related Prepayment Period.
"Prospectus Supplement": That certain Prospectus Supplement
dated September 24, 1999 relating to the public offering of the Regular
Certificates.
"Purchase Price": With respect to any Mortgage Loan required
to be purchased pursuant to Section 2.06 hereof or to be purchased pursuant to
Section 3.15(c) hereof and as confirmed by an Officers' Certificate, an amount
equal to the sum, without duplication, of (i) 100% of the Loan Balance as of the
end of the previous Due Period (or, if such purchase occurs on the first day of
any calendar month, as of the end of such day), (ii) any unreimbursed Servicing
Advances or Delinquency Advances (and any previously reimbursed Non-Recoverable
Advances) allocable to such Mortgage Loan, (iii) interest from the date interest
was last paid by the Mortgagor through the day before the Due Date in the Due
Period relating to the Distribution Date in which the Purchase Price will be
remitted at a rate per annum equal to the applicable Net Mortgage Rate (or, if
New Century is not the Master Servicer at the time of such purchase, at the
applicable Mortgage Rate), to the extent such amounts are not already counted in
(ii), (iv) in the event the Mortgage Loan is required to be purchased pursuant
to Section 2.06 hereof, expenses reasonably incurred or to be incurred by the
Master Servicer, the Trust Administrator or the Trustee in respect of the breach
or defect giving rise to the purchase obligation, including any reasonable
expenses arising out of the enforcement of the purchase obligation and (v) the
principal portion of any scheduled monthly payment which was due during any
previous Due Period for which a Delinquency Advance was not made.
"Qualified Substitute Mortgage Loan": A mortgage loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement
or the Mortgage Loan Purchase Agreement which must, on the date of such
substitution, (i) have an outstanding Loan Balance (when taken together with any
other Qualified Substitute Mortgage Loan substituted for such Deleted Mortgage
Loan), not in excess of and not substantially less than the Loan Balance of the
Deleted Mortgage Loan or Loans as of the date of substitution, (ii) have a
Mortgage Rate not less than (and not more than one percentage point in excess
of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) have a remaining term
to maturity not more than two years greater than nor more than two years less
than that of the Deleted Mortgage Loan (and in any event, not later than October
2029), (iv) have a Loan- to-Value Ratio equal to or lower than the Loan-to-Value
Ratio of the Deleted Mortgage Loan, (v) satisfy the criteria set forth from time
to time in the definition of "qualified replacement mortgage" at Section
860G(a)(4) of the Code, (vi) have the same or a superior lien priority as the
Deleted Mortgage Loan, (vii) comply as of the date of substitution with each
representation and
25
warranty set forth in Section 3.01(ii) of the Mortgage Loan Purchase Agreement
(viii) have the same or better property type (determined in accordance with the
definition of "Residential Dwelling") as the Deleted Mortgage Loan, (ix) have
the same or better occupancy status, (x) be of the same or of a better credit
quality (determined in accordance with the New Century's credit underwriting
guidelines) as the Mortgage Loan being replaced, (xi) have a Second
Loan-to-Value Ratio equal to or greater than the Second Loan-to-Value Ratio of
the Deleted Mortgage Loan (if applicable), and (xii) have a fixed Mortgage Rate.
In the event that one or more mortgage loans are proposed to be substituted for
one or more Deleted Mortgage Loans, the Certificate Insurer may allow the tests
set forth in clauses (i), (ii), (iii), (iv) and (xi) above to be met on a
weighted average basis or other aggregate basis (based on the mortgage loans
substituted in any one Due Period) acceptable to the Certificate Insurer
provided that any such substitution shall not adversely affect the status of the
Mortgage Loans as a REMIC.
"Rating Agency": Each of S&P and Xxxxx'x.
"Realized Loss": As to any Mortgage Loan on which a Final
Recovery Determination has been made, the amount, if any, by which the Loan
Balance of such Mortgage Loan as of the end of the previous Due Period (or, if
such Final Recovery Determination is made on the first day of any calendar
month, as of the end of such day) exceeds the Net Recovery Proceeds allocable to
such Loan Balance for such Mortgage Loan.
"Record Date": With respect to each Distribution Date and any
Class of Regular Certificates (other than the Class A-1 Certificates), the last
Business Day of the month immediately preceding the month in which such
Distribution Date occurs; with respect to each Distribution Date and the Class
A-1 Certificates for so long as they are Book-Entry Certificates, the Business
Day immediately preceding such Distribution Date.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of
which were not used to purchase the related Mortgaged Property.
"Regular Certificate": Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6 or Class A-7 Certificate.
"Regular Certificateholder": Any Holder of a Regular
Certificate.
"Reimbursement Amount": As of any Distribution Date, the sum
of (x) (i) the aggregate of all Insured Payments previously received by the
Trust Administrator and not previously repaid to the Certificate Insurer
pursuant to pursuant to Section 4.04(b)(I)(v) or (II)(v) hereof plus (ii)
interest accrued on each Insured Payment not previously repaid calculated at a
rate equal to the Late Payment Rate from the date the Trust Administrator
received such Insured Payment, (y) (i) the amount of any Insurance Premium not
paid on the date due and (ii) interest on such amount at the Late Payment Rate
from the date such Insurance Premium was due to be paid and (z) (i) the amount
of any amounts owing and unpaid under the Insurance Agreement plus (ii) interest
on such amount
26
from the date such amount became due at a rate equal to the Late Payment Rate.
The Certificate Insurer shall notify the Trustee, the Trust Administrator and
the Depositor of the amount of any Reimbursement Amount.
"Related Loan Group": With respect to the Group I
Certificates, Loan Group I; and with respect to the Group II Certificates, Loan
Group II.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC Certificate Maturity Date": The latest of the latest
possible maturity date of the Regular Certificates as identified in Section
2.10(f).
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Trust": Each of the assets constituting the Trust
Estate relating to the Mortgage Loans.
"Remittance Report": A report prepared by the Master Servicer
pursuant to Section 4.06(a) hereof.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Disposition": The receipt by the Master Servicer of all
Liquidation Proceeds, Insurance Proceeds and other payments or recoveries
(including proceeds of a final sale) which the Master Servicer expects to be
finally recoverable from the sale or other disposition of the related REO
Property.
"REO Property": A Mortgaged Property acquired by the Master
Servicer in the name of the Trustee on behalf of the Certificateholders through
foreclosure or deed in lieu of foreclosure, as described in Section 3.22 hereof.
"Request for Release": A release signed by a Servicing
Officer, in the form of Exhibit E-1 or Exhibit E-2 attached hereto.
"Reserve Interest Rate": With respect to any Interest
Determination Date, the rate per annum that the Trust Administrator determines
to be either (i) the arithmetic mean (rounded upwards if necessary to the
nearest whole multiple of 1/16 of 1%) of the one-month United States dollar
lending rates which banks in The City of New York selected by the Trustee are
quoting on the
27
relevant Interest Determination Date to the principal London offices of leading
banks in the London interbank market or (ii) in the event that the Trust
Administrator can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which such New York banks selected by the Trust
Administrator are quoting on such Interest Determination Date to leading
European banks.
"Residential Dwelling": Any one of the following: (i) a
detached or semi-detached single-family dwelling, (ii) a two- to four-unit
dwelling, (iii) a townhouse, or (iv) a unit in a condominium or a planned unit
development, none of which is a co-operative unit or a mobile home, but which
may be a pre-fabricated or manufactured unit affixed to a permanent foundation,
all in accordance with the New Century's underwriting guidelines.
"Responsible Officer": When used with respect to the Trustee
or the Trust Administrator, the Chairman or Vice Chairman of the Board of
Directors, the President, any vice president, any assistant vice president, the
Secretary, any assistant secretary, the Treasurer, any assistant treasurer, the
Controller and any assistant controller or any other officer of the Trustee or
the Trust Administrator, as the case may be, customarily performing functions
similar to those performed by any of the above designated officers and also to
whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Retained Interest": 65% of the interest due on the Mortgage
Loans during the first Due Period.
"Retained Prepayment Charges": 65% of the Prepayment Charges
collected on Mortgage Loans that had Principal Prepayments during the first
Prepayment Period.
"Rolling Delinquency Percentage": With respect to any
Distribution Date, the average of the Delinquency Percentages as of the last day
of each of the three (or one or two, in the case of the first and second
Distribution Dates, respectively) preceding Due Periods.
"S&P": Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc., and its successors, and, if such division shall for any reason
no longer perform the functions of a securities rating agency, "S&P" shall be
deemed to refer to any other "nationally recognized rating organization," as set
forth on the most current list of such organizations released by the Securities
and Exchange Commission and designated by the Certificate Insurer, notice of
which designation shall be given to the Trustee, the Trust Administrator and the
Master Servicer by the Certificate Insurer.
"SAIF": The Savings Association Insurance Fund of the FDIC.
"Second Loan-to-Value Ratio": With respect to any Mortgage
Loan and any date of determination, the fraction, expressed as a percentage, the
numerator of which is the unpaid principal
28
balance of the second lien on the related Mortgaged Property and the denominator
of which is the Value of such Mortgaged Property.
"Second Mortgage Loan": Any Mortgage Loan that is secured by a
second lien on or second priority security interest in the related Mortgaged
Property.
"Seller": NC Capital Corporation, a corporation organized
under the laws of the State of California, or its successor in interest, in its
capacity as seller of the Mortgage Loans.
"Servicing Account": The account or accounts created and
maintained pursuant to Section 3.09 hereof.
"Servicing Advances": The costs and expenses incurred by or on
behalf of the Master Servicer in connection with (i) the preservation,
restoration and protection of a Mortgaged Property or REO Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management (including reasonable fees in connection therewith) and liquidation
of any REO Property, (iv) the payment of any taxes, assessments or insurance
premiums, and the performance of its obligations under Sections 3.01(b)(ii),
3.09, 3.13, 3.15(a) and 3.22 hereof, and (v) in connection with the liquidation
of a Mortgage Loan, expenditures relating to the purchase or maintenance of the
related First Lien pursuant to Section 3.24 hereof.
"Servicing Fee": With respect to each Mortgage Loan and any
Due Period, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the Loan Balance of such
Mortgage Loan at the beginning of such Due Period. A portion of such Servicing
Fee may be paid to any Subservicer as its servicing compensation.
"Servicing Fee Rate": A rate per annum equal to 0.50%.
"Servicing Officer": Any officer of the Master Servicer or any
Subservicer involved in, or responsible for, the administration and servicing of
the Mortgage Loans, whose name and specimen signature appear on a list of
servicing officers furnished to the Trustee and the Trust Administrator by the
Master Servicer or such Subservicer, as such list may from time to time be
amended. There shall at no time be fewer than two Servicing Officers.
"Shift Percentage": For any Distribution Date, the percentage
indicated below:
Distribution Date occurring in Shift Percentage
------------------------------ ----------------
October 1999 through September 2002.............. 0%
October 2002 through September 2004.............. 45%
October 2004 through September 2005.............. 80%
October 2005 through September 2006.............. 100%
29
October 2006 and thereafter............. 300%
"Spread Percentage": For any Distribution Date, the product of
(a) the sum of (x) the amount, if any, by which the Group I Available
Funds for such Distribution Date exceeds the aggregate amount
distributed on such Distribution Date pursuant to subclauses (i)
through (iv) of clause I under Section 4.04(b), plus (y) the amount, if
any, by which the Group II Available Funds for such Distribution Date
exceeds the aggregate amount distributed on such Distribution Date
pursuant to subclauses (i) through (iv) of clause II under Section
4.04(b), minus (z) any OC Release Amounts for such Distribution Date
and
(b) twelve, divided by
(c) the Aggregate Loan Balance as of the first day of the related
Prepayment Period (after application of scheduled payments due on such
day whether or not received).
"Spread Squeeze Amount": For any Distribution Date on which
the Aggregate Loan Balance is greater than one-half of the Cut-off Date Pool
Balance zero. For any other Distribution Date, the greater of (a) zero and (b)
the product of (i) 1.5% minus the Spread Percentage for such Distribution Date,
(ii) three and (iii) the Aggregate Loan Balance as of the first day of the
related Prepayment Period (after application of scheduled payments due on such
day whether or not received).
"Startup Date": September 28, 1999.
"Step Down Cumulative Loss Test": The Step Down Cumulative
Loss Test will be met with respect to a Distribution Date as follows: (i) for
the 31st through the 41st Distribution Dates, if the Cumulative Loss Percentage
for such Distribution Date is 1.50% or less; (ii) for the 42nd through the 53rd
Distribution Dates, if the Cumulative Loss Percentage for such Distribution Date
is 2.00% or less; (iii) for the 54th through the 65th Distribution Dates, if the
Cumulative Loss Percentage for such Distribution Date is 2.40% or less; and (iv)
for any Distribution Date after the 65th Distribution Date, if the Cumulative
Loss Percentage for such Distribution Date is 2.75% or less.
"Step Down Rolling Delinquency Test": The Step Down Rolling
Delinquency Test will be met with respect to a Distribution Date if the Rolling
Delinquency Percentage for such Distribution Date is 10.00% or less.
"Step Down Rolling Loss Test": The Step Down Rolling Loss Test
will be met with respect to a Distribution Date if the Annual Loss Percentage is
less than 0.75%.
"Step Down Trigger": For any Distribution Date after the OC
Stepdown Date, the Step Down Trigger will have occurred if each of the Step Down
Cumulative Loss Test, the Step
30
Down Rolling Delinquency Test and the Step Down Rolling Loss Test is met. In no
event will the Step Down Trigger be deemed to have occurred prior to the OC
Stepdown Date.
"Step Up Cumulative Loss Test": The Step Up Cumulative Loss
Test will be met with respect to a Distribution Date as follows: (i) for the 1st
through the 12th Distribution Dates, if the Cumulative Loss Percentage for such
Distribution Date is more than 1.00%; (ii) for the 13th through the 24th
Distribution Dates, if the Cumulative Loss Percentage for such Distribution Date
is more than 1.50%; (iii) for the 25th through the 36th Distribution Dates, if
the Cumulative Loss Percentage for such Distribution Date is more than 1.90%;
(iv) for the 37th through the 48th Distribution Dates, if the Cumulative Loss
Percentage for such Distribution Date is more than 2.40%; and (v) for the 49th
Distribution Date and any Distribution Date thereafter, if the Cumulative Loss
Percentage for such Distribution Date is more than 3.00%.
"Step Up Rolling Loss Test": The Step Up Rolling Loss Test
will be met with respect to a Distribution Date, if the Annual Loss Percentage
is equal to or more than 1.10%.
"Step Up Trigger": For any Distribution Date, the Step Up
Trigger will have occurred if any one of the Step Up Cumulative Loss Test or the
Step Up Rolling Loss Test is met.
"Stepped Down Required Overcollateralized Amount": For any
Distribution Date for which the Step Down Trigger has occurred, the sum of
(i) the product of
(a) the sum of the OC Target Amount for Certificate Group I
for such Distribution Date and the OC Target Amount for
Certificate Group II for such Distribution Date, in each case
determined as if the Step Down Trigger had not occurred, and
(b) a fraction, the numerator of which is six minus the number
of consecutive Distribution Dates through and including the
Distribution Date for which the Stepped Down Required
Overcollateralized Amount is being calculated, up to a maximum
of six, for which the Step Down Trigger has occurred, and the
denominator of which is six,
(ii) the product of
(a) the greater of (x) 7.90% of the Aggregate Loan Balance and
(y) the excess of (I) one half of the aggregate of the Loan
Balance of the Mortgage Loans that are 90 Days Delinquent, in
foreclosure or reduced to REO Property, over (II) the product
of (1) two and (2) the sum of the Group I General Excess
Available Amount and the Group II General Excess Available
Amount and
(b) one minus the fraction set forth in clause (i)(b) and
31
(iii) the Spread Squeeze Amount.
Notwithstanding the foregoing, if the Step Up Trigger has also occurred for such
Distribution Date, the amount in clause (ii)(a)(y) above shall be multiplied by
two for purposes of calculating the Stepped Down Required Overcollateralized
Amount for such Distribution Date.
"Subservicer": Any Person with which the Master Servicer has
entered into a Subservicing Agreement and which meets the qualifications of a
Subservicer pursuant to Section 3.02 hereof.
"Subservicing Account": An account established by a
Subservicer which meets the requirements set forth in Section 3.08 hereof and is
otherwise acceptable to the Master Servicer.
"Subservicing Agreement": The written contract between the
Master Servicer and a Subservicer or any successor Subservicer relating to
servicing and administration of certain Mortgage Loans as provided in Section
3.02 hereof.
"Substitution Shortfall Amount": As defined in Section
2.06(d) hereof.
"Tax Matters Person": The Tax Matters Person appointed
pursuant to Section 11.12 hereof.
"Tax Returns": The federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust due to its classification as a REMIC under
the REMIC Provisions, together with any and all other information reports or
returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 10.01(b) hereof.
"Trust": New Century Home Equity Loan Trust, Series 1999-NCB,
the trust created hereunder.
"Trust Administrator": U.S. Bank, National Association, a
national banking association, or any successor trust administrator appointed as
herein provided.
"Trust Estate": The corpus of the Trust, consisting of: (i)
such Mortgage Loans as from time to time are subject to this Agreement, together
with the Mortgage Files relating thereto, and together with all collections
thereon and proceeds thereof (other than the Retained Interest and the Retained
Prepayment Charges and other than scheduled payments due on or before the
Cut-off
32
Date and unscheduled payments or collections received before the Cut-off Date),
(ii) any REO Property, together with all collections thereon and proceeds
thereof, (iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and any
proceeds thereof, (iv) the rights and remedies of the Trustee against any Person
making any representation or warranty to the Trustee hereunder, to the extent
provided herein, (v) the Depositor's rights under the Mortgage Loan Purchase
Agreement (including any security interest created thereby) and (vi) each
Account, together with such assets that are deposited therein from time to time
and any investments thereof, together with any and all income, proceeds and
payments with respect thereto.
"Trustee": Firstar Bank Milwaukee, N.A., a national banking
association, or any successor trustee appointed as herein provided.
"Underwriters": PaineWebber Incorporated and Greenwich
Capital Markets, Inc., as underwriters with respect to the Offered Certificates.
"Uninsured Cause": Any cause of damage to a Mortgaged Property
such that the complete restoration of such property is not fully reimbursable by
application of the proceeds of the hazard insurance policies required to be
maintained pursuant to Section 3.13 hereof.
"United States Person or U.S. Person": A citizen or resident
of the United States, a corporation or partnership (including an entity treated
as a corporation or partnership for federal income tax purposes) created or
organized in, or under the laws of, the United States or any state thereof or
the District of Columbia (except, in the case of a partnership, to the extent
provided in regulations), an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more such United States Persons have the authority to
control all substantial decisions of the trust. To the extent prescribed in
regulations by the Secretary of the Treasury, which have not yet been issued, a
trust which was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under subpart E of part I of subchapter J of chapter 1 of
the Code), and which was treated as a United States Person on August 20, 1996
may elect to continue to be treated as a United States Person notwithstanding
the previous sentence.
"Value": With respect to any Mortgaged Property, the lesser of
(i) the lesser of (a) the value thereof as determined by an appraisal made for
New Century, in its capacity as originator of the Mortgage Loan, at the time of
origination of the Mortgage Loan by an appraiser who met the minimum
requirements of Xxxxxx Mae and Xxxxxxx Mac and (b) the value thereof as
determined by a review appraisal conducted by the Master Servicer (in its
capacity as originator of the Mortgage Loan) in accordance with the Master
Servicer's underwriting guidelines, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan; provided, however, (A) in the case of a Refinanced Mortgage Loan, such
value of the Mortgaged Property is based solely upon the lesser of (1) the value
determined by an appraisal made for New Century, in its capacity as originator
of the Mortgage Loan, of such Refinanced Mortgage Loan at
33
the time of origination of such Refinanced Mortgage Loan by an appraiser who met
the minimum requirements of Xxxxxx Mae and Xxxxxxx Mac and (2) the value thereof
as determined by a review appraisal conducted by the Master Servicer (in its
capacity as originator of the Mortgage Loan) in accordance with the Master
Servicer's underwriting guidelines, and (B) in the case of a Mortgage Loan
originated in connection with a "lease-option purchase," such value of the
Mortgaged Property is based on the lower of the value determined by an appraisal
made for New Century, in its capacity as originator of such Mortgage Loan, at
the time of origination or the sale price of such Mortgaged Property if the
"lease option purchase price" was set less than 12 months prior to origination,
and is based on the value determined by an appraisal made for New Century, in
its capacity as originator of such Mortgage Loan, at the time of origination if
the "lease option purchase price" was set 12 months or more prior to
origination.
"Voting Percentage": With respect to a Regular Certificate, a
fraction, expressed as a decimal, the numerator of which is the Certificate
Principal Balance represented by such Regular Certificate and the denominator of
which is the Class Certificate Principal Balance of the related Class. With
respect to a Class R Certificate, the Percentage Interest set forth on such
Certificate.
"Voting Rights": The portion of the voting rights of all of
the Certificates which is allocated to any Certificate. Except as otherwise
expressly provided for herein. At all times, the Class A Certificates shall have
99% of the Voting Rights and the Class R Certificates shall have 1% of the
Voting Rights; provided, however, that any Certificate registered in the name of
the Master Servicer, the Depositor, the Trust Administrator or the Trustee or
any of their respective affiliates shall not be included in the calculation of
Voting Rights; when none of the Regular Certificates are outstanding, 100% of
the Voting Rights shall be allocated Holders of the Class of Class R
Certificates in accordance with such Holders' respective Percentage Interests in
the Certificates of such Class.
"Written Order to Authenticate": A written order in the form
of Exhibit J hereto by which the Depositor directs the Trustee or the Trust
Administrator to issue the Certificates.
Section 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any
definition or calculation, whenever amounts are required to be netted,
subtracted or added or any distributions are taken into account such definition
or calculation and any related definitions or calculations shall be determined
without duplication of such functions.
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ARTICLE II
ESTABLISHMENT OF THE TRUST;
PURCHASE AND SALE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Establishment of the Trust.
The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust to be known, for convenience, as "New Century Home Equity Loan Trust,
Series 1999-NCB" and does hereby appoint Firstar Bank Milwaukee, N.A., as
Trustee in accordance with the provisions of this Agreement and does hereby
appoint U.S. Bank National Association, as Trust Administrator to performance
certain duties in accordance with the provisions of this Agreement, in such
capacity on behalf of and as custodian or agent for the Trustee.
Section 2.02. Purchase and Sale of Mortgage Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby sell, transfer, assign, set over and otherwise convey to the
Trustee without recourse, but subject to the terms of this Agreement, all right,
title and interest of the Depositor, including any security interest therein for
the benefit of the Depositor, in and to (i) the Mortgage Loans identified on the
Mortgage Loan Schedule delivered on the Closing Date, including, without
limitation, all scheduled principal and interest payments due after the
applicable Cut-off Date (other than Retained Interest), but excluding Retained
Prepayment Charges, (ii) the rights of the Depositor under the Mortgage Loan
Purchase Agreement and (iii) the other assets of the Trust Estate.
In consideration of such sale of the Mortgage Loans, the
Trustee shall issue to or upon the order of the Depositor, the Certificates.
Section 2.03. Grant of Security Interest.
In the event that any conveyance pursuant to Section 2.02
hereof is deemed by a court of competent jurisdiction to be a loan, the parties
intend that the Depositor shall be deemed to have granted to the Trustee on
behalf of the Certificateholders and the Certificate Insurer a security interest
in the related Mortgage Loans, including, without limitation, all interest
accrued thereon and that this Agreement shall constitute a security agreement
under applicable law. The Depositor, the Trust Administrator and the Trustee
shall, to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
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Except as may otherwise expressly be provided herein, none of
the Depositor, the Master Servicer, the Trust Administrator or the Trustee shall
(and the Master Servicer shall ensure that no Subservicer shall) assign, sell,
dispose of or transfer any interest in the Trust Estate or any portion thereof,
or permit the Trust Estate or any portion thereof to be subject to any lien,
claim, mortgage, security interest, pledge or other encumbrance of any other
Person.
In the event that the parties hereto have failed to transfer
the entire legal ownership in and to each Mortgage Loan to the Trustee on behalf
of the Certificateholders and the Certificate Insurer, the parties hereto intend
that this document operate to transfer the entire equitable ownership interest
in and to each Mortgage Loan to the Trustee on behalf of the Certificateholders.
Section 2.04. Document Delivery Requirements.
(a) In connection with the conveyance pursuant to Section 2.02
hereof, the Depositor does hereby agree to deliver to, and deposit with, the
Trust Administrator, as custodian for the Trustee (in which capacity the Trust
Administrator will, unless otherwise specified, be acting under this Article
II), no later than two Business Days prior to the Closing Date, the following
documents or instruments with respect to each Mortgage Loan (a "Mortgage File")
so transferred and assigned:
(i) the original Mortgage Note, endorsed in
blank or in the following form: "Pay to the order of Firstar Bank Milwaukee,
N.A., as Trustee under the applicable agreement, without recourse", with all
prior and intervening endorsements showing a complete chain of endorsement from
the originator of the Mortgage Loan to the Trustee;
(ii) the original Mortgage with evidence of
recording thereon (or, if the original Mortgage has not been returned from the
applicable public recording office or is not otherwise available, a copy of the
Mortgage certified by a Responsible Officer of the Master Servicer, in its
capacity as originator of the Mortgage Loan, or by the closing attorney or by an
officer of the title insurer or agent of the title insurer which issued the
related title insurance policy or commitment therefor to be a true and complete
copy of the original Mortgage submitted for recording) and, if the Mortgage was
executed pursuant to a power of attorney, the original power of attorney with
evidence of recording thereon (or, if the original power of attorney has not
been returned from the applicable public recording office or is not otherwise
available, a copy of the power of attorney certified by a Responsible Officer of
the Master Servicer, in its capacity as originator of the Mortgage Loan, or by
the closing attorney or by an officer of the title insurer or agent of the title
insurer which issued the related title insurance policy or commitment therefor,
to be a true and complete copy of the original power of attorney submitted for
recording);
(iii) the original executed Assignment of the
Mortgage, acceptable for recording except with respect to any currently
unavailable recording information, from the Depositor to the Trustee in the
following form: "Firstar Bank Milwaukee, N.A., as Trustee under the applicable
agreement" or in blank;
36
(iv) the original Assignment and any intervening
Assignments of the Mortgage, with evidence of recording thereon, showing a
complete chain of assignment from origination of the Mortgage Loan to the
Depositor (or, if any such Assignment has not been returned from the applicable
public recording office or is not otherwise available, a copy of such Assignment
certified by a Responsible Officer of the Master Servicer, in its capacity as
originator of the Mortgage Loan, or by the closing attorney or by an officer of
the title insurer or agent of the title insurer which issued the related title
insurance policy or commitment therefor to be a true and complete copy of the
original Assignment submitted for recording);
(v) the original, or a copy certified by the
Depositor or the originator of the Mortgage Loan to be a true and complete copy
of the original, of each assumption, modification, written assurance or
substitution agreement, if any; and
(vi) an original, or a copy certified by the
Depositor to be a true and complete copy of the original, of a lender's title
insurance policy, together with all endorsements or riders that were issued with
or subsequent to the issuance of such policy, insuring the priority of the
Mortgage as first or second lien on the Mortgaged Property represented therein
as a fee simple interest vested in the Mortgagor, or in the event such original
title policy is unavailable, a written commitment or uniform binder or
preliminary report of title issued by the title insurance or escrow company.
(b) With respect to any Mortgage referred to in Section
2.04(a)(ii) above as to which the original Mortgage is not available as of the
Closing Date, and with respect to any Assignment referred to in Section
2.04(a)(iii) or 2.04(a)(iv) above as to which the original Assignment is not
available as of the Closing Date, the Depositor shall deliver or cause to be
delivered, prior to the Closing Date, a copy of such Mortgage or such
Assignment, as the case may be, certified by the Master Servicer, in its
capacity as originator of the Mortgage Loan, to be a true and complete copy, to
the Trust Administrator and shall also deliver the original Mortgage, or where
the original Mortgage is unavailable a copy thereof certified by the applicable
public recording office, and the original Assignment, or where the original
Assignment is unavailable a copy thereof certified by the applicable public
recording office, to the Trust Administrator within five Business Days after
receipt thereof by or on behalf of the Depositor but in no event later than 360
days (or such longer period, as approved by the Certificate Insurer in writing
with respect to specific Mortgage Loans upon request made by or on behalf of the
Depositor) following the date of origination of the related Mortgage Loan or the
date of such Assignment to the Depositor, as the case may be. The failure of the
Depositor to deliver to the Trust Administrator (x) any original Mortgage under
Section 2.04(a)(ii) above (or where the original is unavailable a copy thereof
certified by the applicable public recording office) or (y) any original
Assignment under Section 2.04(a)(iii) above and (iv) (or where the original is
unavailable a copy thereof certified by the applicable public recording office)
shall not be deemed a breach of this Agreement for any purpose whatsoever until
the expiration of five Business Days after receipt thereof by or on behalf of
the Depositor or such 360-day period (or such longer period, as approved by the
Certificate Insurer in writing with respect
37
to specific Mortgage Loans upon request made by or on behalf of the Depositor)
whichever is shorter.
With respect to any lender's title insurance policy referred
to in Section 2.04(a)(vi) above, the Depositor agrees to deliver such documents
with respect to the Mortgage Loans to the Trust Administrator within fifteen
(15) days following the Closing Date.
The Trust Administrator shall promptly (and in no event later
than five Business Days following the Closing Date) submit or cause to be
submitted for recording, at the Master Servicer's expense, in the appropriate
public office for real property records, each original Assignment referred to in
Section 2.04(a)(iii) above, as well as each original Assignment referred to in
Section 2.04(a)(iv) above that was not previously submitted for recording. With
respect to any original Assignment referred to in Section 2.04(a)(iii) above as
to which the related recording information is unavailable within five Business
Days following the Closing Date, such original Assignment shall be submitted for
recording within five Business Days after receipt of such information but in no
event later than 90 days (or such longer period, up to an additional 90 days, as
approved by the Certificate Insurer in writing with respect to specific Mortgage
Loans upon the request of the Depositor) after the Closing Date. The Depositor
shall deliver each recorded Assignment referred to in Section 2.04(a)(iii) above
or, where the original is unavailable, a copy thereof certified by the
applicable public recording office to be a true and complete copy of the
original, to the Trust Administrator no later than the earlier of (i) five
Business Days after receipt thereof and (ii) within 360 days after the Closing
Date (or such longer period, as approved by the Certificate Insurer in writing
with respect to specific Mortgage Loans upon the request of the Depositor). Any
failure of the Depositor to deliver to the Trust Administrator, prior to the
expiration of five Business Days after receipt thereof by the Depositor or such
360-day period, whichever is shorter (or any such longer period as the
Certificate Insurer may have approved in accordance with the terms set forth
above), any such recorded Assignment, or such certified copy if such recorded
Assignment has not been received by it, shall not be deemed a breach of this
Agreement for any purpose. In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Master Servicer shall
promptly prepare a substitute Assignment or cure such defect, as the case may
be, and thereafter cause each such Assignment to be duly recorded.
The Trust Administrator shall promptly upon receipt thereof
(and in any event no longer than 30 days following the Closing Date), with
respect to each Mortgage Note and Assignment of Mortgage delivered in blank in
accordance with Section 2.04(a)(i) and (iii) above, respectively, cause the
Trustee to endorse each such Mortgage Note and assign each such Assignment in
the form described therein.
Notwithstanding anything to the contrary in this Section 2.04,
the Trust Administrator need not cause to be recorded any Assignment which
relates to a Mortgage Loan in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Depositor to the Trustee,
the Trust Administrator, the Certificate Insurer and the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee's
interest in the related Mortgage Loan;
38
provided, however, notwithstanding the delivery of any Opinion of Counsel, each
Assignment of Mortgage shall be submitted for recording by the Master Servicer
in the manner described above, at no expense to the Trust Estate, the Trust
Administrator or Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights or the Certificate Insurer, (ii) the occurrence of a Master Servicer
Default, (iii) the occurrence of a bankruptcy, insolvency or foreclosure
relating to the Master Servicer, (iv) the occurrence of a servicing transfer as
described in Section 7.02 hereof and (iv) if New Century is not the Master
Servicer and with respect to any one Assignment of Mortgage, the occurrence of a
bankruptcy, insolvency or foreclosure relating to the Mortgagor under the
related Mortgage. Notwithstanding the foregoing (and without prejudice to any
claim against the Master Servicer for any such failure) if the Master Servicer
fails to pay the cost of recording the Assignments of Mortgage, such expense
will be paid by the Trust Administrator and the Trust Administrator shall be
reimbursed for such expenses by the Trust.
The Master Servicer shall promptly upon receipt thereof (and
in no event later than the earlier of (i) five Business Days following such
receipt and (ii) 360 days after the Closing Date (or such longer period, as
approved by the Certificate Insurer in writing with respect to specific Mortgage
Loans upon the request of the Depositor)), deliver to the Trust Administrator
(a) the original recorded Mortgage in those instances where a certified copy
thereof was delivered to the Trust Administrator; (b) the original recorded
Assignment or Assignments of the Mortgage showing a complete chain of assignment
from the originator of the Mortgage Loan to the Depositor in those instances
where certified copies thereof were delivered to the Trust Administrator; (c)
the original policy of title insurance or a copy certified by the Depositor to
be a true and complete copy in those instances where a commitment (binder)
(including any marked additions thereto or deletions therefrom) to issue such
policy was delivered to the Trust Administrator; and (d) any other original
documents constituting a part of a Mortgage File received with respect to any
Mortgage Loan, including, but not limited to, any original documents evidencing
an assumption or modification of any Mortgage Loan.
In the event that the Certificate Insurer approves in writing
any extension of time for delivery of any document as provided for in this
Section 2.04(b), a copy of such written approval shall be sent to the Trustee,
the Trust Administrator and the Rating Agencies.
All original documents relating to the Mortgage Loans that are
not delivered to the Trust Administrator are and shall be held by the Depositor
or the Master Servicer, as the case may be, in trust for the benefit of the
Trustee on behalf of the Certificateholders. In the event that any such original
document is required pursuant to the terms of this Section 2.04 to be a part of
a Mortgage File, such document shall be delivered promptly to the Trust
Administrator. Any original document that is not required pursuant to the terms
of this Section to be a part of a Mortgage File delivered to or held by the
Trust Administrator shall be delivered promptly to the Master Servicer.
In connection with the delivery of documentation provided by
this Section 2.04, the Depositor hereby appoints each of the Trustee and the
Trust Administrator its attorney with full
39
power and authority to act in its stead for the purpose of executing and
certifying assignments and endorsing and certifying promissory notes which make
a part of each Mortgage File to cure any deficiencies in such documentation.
In addition to the foregoing, the Depositor shall cause the
Certificate Insurer to deliver on the Closing Date the Policy to the Trust
Administrator for the benefit of the Certificateholders.
If the Depositor has not delivered all required documentation
with respect to any Mortgage Loan within the time periods, if any, specified in
this Agreement (including, without limitation, the extension of time approved in
writing by the Certificate Insurer or any Rating Agency), the Depositor shall be
required to take action with respect to such Mortgage Loan as and to the extent
provided in Section 2.06 hereof.
Section 2.05. Acceptance by the Trustee.
The Trust Administrator, on behalf of the Trustee, agrees to
acknowledge (i) receipt by it on the Closing Date, in good faith without notice
of adverse claims, subject to the provisions of Sections 2.02 and 2.04 hereof
and to any exceptions noted on the Trust Administrator's certification in the
form annexed hereto as Exhibit F-1 to be delivered to the Depositor, the Master
Servicer, the Trustee and the Certificate Insurer on the Closing Date, of (x)
the documents referred to in Section 2.04(a)(i), (ii), (iii) and (iv) above
(except that the documents referred to in Sections 2.04(a)(i) and (iii) may be
endorsed or assigned in blank upon receipt) with respect to the Mortgage Loans
listed on the Mortgage Loan Schedule to be delivered to the Trust Administrator
on the Closing Date, and (y) the Certificate Account and the amounts on deposit
therein and (ii) the assignment to the Trustee of all the other assets included
in clauses (i) and (iii) of the definition of "Trust Estate" herein, and the
Trust Administrator declares that it will hold such documents and such other
documents constituting the Mortgage Files as are delivered to it, and all such
assets and such other assets included in the definition of "Trust Estate" as are
delivered to it, in trust for the exclusive use and benefit of all present and
future Certificateholders and the Certificate Insurer.
Within 10 Business Days after the Closing Date the Trust
Administrator shall deliver to the Depositor, the Master Servicer, the Trustee
and the Certificate Insurer a Final Certification of delivery of all of the
documents referred to in Section 2.04(a) in the form annexed hereto as Exhibit
F-2, with any applicable exceptions noted thereon.
After the delivery of the final certification, the Trust
Administrator shall provide to the Master Servicer, the Depositor, the Trustee
and the Certificate Insurer, no less frequently than quarterly, updated
certifications, a form of which is attached hereto as Exhibit F-3, indicating
the then current status of exceptions until all such exceptions have been
eliminated; provided that the delivery of the final certification shall not act
as a waiver of any of the rights the Certificate Insurer may have with respect
to such exceptions, and all rights are reserved with respect thereto.
40
If, in the process of reviewing the Mortgage Files and making
or preparing the certifications referred to above, the Trust Administrator finds
any document or documents constituting a part of a Mortgage File to be missing
or defective in any material respect or, at the end of any 360-day period (or
any later period approved as provided in Section 2.04(b) hereof, notice of which
approval has been provided to the Trust Administrator in writing (if such
approval is made by the Certificate Insurer)) referenced above, finds that all
recorded Assignments and all original Mortgages or certified copies thereof have
not been delivered to it, the Trust Administrator shall promptly so notify the
Depositor, the Certificate Insurer, the Trustee and the Master Servicer. In
performing any such review, the Trust Administrator may conclusively rely on the
Depositor as to the purported genuineness of any such document and any signature
thereon. It is understood that the scope of the Trust Administrator's review of
the items delivered to the Trust Administrator pursuant to this Section 2.05,
unless otherwise expressly stated, shall be limited solely to confirming that
the documents listed in this Section 2.05 have been executed and received,
relate to the Mortgage Loans listed in the Mortgage Loan Schedule and conform as
to the loan number and address and description thereof in the Mortgage Loan
Schedule. In addition, upon the discovery by the Depositor, the Master Servicer,
the Certificate Insurer, the Trust Administrator or the Trustee of a breach of
any of the representations and warranties made by the Master Servicer or the
Depositor pursuant to Sections 2.07 and 2.08 hereof in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interests of the Certificateholders in such Mortgage Loan, the Person
discovering such breach shall give prompt written notice to the other Persons
set forth in this sentence.
The Trust Administrator shall, upon the written request of the
Certificate Insurer and, at the expense of such requesting party, provide a
written report to the Certificate Insurer of each Mortgage File released to the
Master Servicer for servicing purposes.
At such time as any Mortgage Loan becomes 90 days Delinquent,
the Master Servicer shall make, or cause to be made, a reasonable investigation
to determine whether such Mortgage Loan satisfied the representations and
warranties of the Seller set forth in Section 3.01(ii) of the Mortgage Loan
Purchase Agreement as of the Closing Date.
If the Depositor has not delivered all required documentation
with respect to any Mortgage Loan within the time periods specified in this
Agreement (as such may have been extended pursuant to Section 2.04(b) hereof),
the Depositor shall be required to take action with respect to such Mortgage
Loan as and to the extent provided in Section 2.06 hereof.
Section 2.06. Repurchase or Substitution of Mortgage Loans
by the Seller, the Depositor or the Master Servicer.
(a) Upon discovery or receipt of notice of any materially
defective document in, or that a required document is missing (after expiration
of the applicable time period set forth in Section 2.04 hereof) from, a Mortgage
File, or of the breach by the Seller of any representation, warranty or covenant
under the Mortgage Loan Purchase Agreement in respect of any Mortgage
41
Loan that in either such case materially adversely affects the value of such
Mortgage Loan or the interest therein of the Certificateholders and the
Certificate Insurer, the Trust Administrator shall promptly notify the Seller,
the Depositor, the Certificate Insurer, the Trustee and the Master Servicer of
such defect, missing document or breach and request that the Depositor or the
Seller, as the case may be, deliver such missing document or cure such defect
within 90 days after the date on which the Depositor or the Seller, as the case
may be, was notified of such missing or defective document or that the Seller
cure such breach within 60 days after the date on which the Seller was notified
of such breach (which period may be extended by the Certificate Insurer if in
its reasonable judgment it believes that the Depositor or the Seller, as the
case may be, is proceeding diligently to cure any such breach or missing
document). In the case of any defect or missing document that is the
responsibility of the Depositor as set forth above, the Depositor shall deliver
such missing document or cure such defect in all material respects during such
period or shall repurchase the related Mortgage Loan from the Trust at the
Purchase Price within 90 days after the date on which the Depositor was first
notified of such missing document or defect. In the case of any defect, missing
document or breach that is the responsibility of the Seller as set forth above,
and the Seller does not deliver such missing document or cure such defect or
breach in all material respects during such period, the Master Servicer (or the
Trust Administrator), in accordance with Section 3.02(b), shall enforce the
obligations of the Seller under the Mortgage Loan Purchase Agreement to
repurchase the related Mortgage Loan from the Trust at the Purchase Price within
90 days after the date on which the Seller was first notified of such missing
document, defect or breach, if and to the extent that the Seller is obligated to
do so under the Mortgage Loan Purchase Agreement. The Purchase Price for the
repurchased Mortgage Loan shall be deposited by the Master Servicer into the
Collection Account and the Trust Administrator, upon (i) receipt of an Officers'
Certificate of the Master Servicer as to the making of such deposit and (ii)
confirmation that such deposit has been made, shall release or cause to be
released to the Seller or the Depositor, as the case may be, the related
Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment as are furnished by the Seller or the Depositor (as
applicable), in each case without recourse, as shall be reasonably necessary to
vest in the Seller or the Depositor (as applicable) any Mortgage Loan released
pursuant hereto, and neither the Trustee nor the Trust Administrator shall have
any further responsibility or liability (except as to its own negligence or
willful misconduct) with regard to such Mortgage File and such Mortgage Loan.
In lieu of repurchasing any such Mortgage Loan as provided
above, if so provided in the Mortgage Loan Purchase Agreement, the Seller may
cause such Mortgage Loan to be removed from the Trust (in which case it shall
become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.06(d) hereof. It is understood and agreed that the obligation of the Seller to
cure or to repurchase (or to substitute for) any Mortgage Loan as to which a
document is missing, a material defect in a constituent document exists or as to
which a breach has occurred and is continuing shall constitute the sole remedy
respecting such omission, defect or breach available to the Trustee or the Trust
Administrator on behalf of the Certificateholders and the Certificate Insurer.
42
In lieu of repurchasing any such Mortgage Loan as provided
above, the Depositor may cause such Mortgage Loan to be removed from the Trust
(in which case it shall become a Deleted Mortgage Loan) and substitute one or
more Qualified Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.06(d) hereof. It is understood and agreed
that the obligation of the Depositor to cure or to repurchase (or to substitute
for) any Mortgage Loan as to which a document is missing or a material defect in
a constituent document exists shall constitute the sole remedy respecting such
defect or missing document available to the Trustee or the Trust Administrator
on behalf of the Certificateholders and the Certificate Insurer.
(b) Except as otherwise provided in Section 2.06(e) hereof,
within 90 days after the earlier of discovery by the Depositor or receipt of
notice by the Depositor of the breach of the substance of any representation or
warranty of the Depositor set forth in Section 2.08 hereof with respect to any
Mortgage Loan (without giving effect to any qualification contained in such
representation and warranty relating to the Depositor's knowledge) which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Depositor shall (x) cure such breach in
all material respects, (y) subject to the restrictions set forth in Section
2.06(d) hereof repurchase the Mortgage Loan from the Trustee at the Purchase
Price or (z) remove such Mortgage Loan from the Trust (in which case it shall
become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans in the manner and subject to the limitations set forth in Section
2.06(d) hereof. If any such breach is a breach of any of the representations and
warranties included in subsections (q) and (t) of Section 2.08 hereof, and the
Depositor is unable to cure such breach, the Depositor shall repurchase or
substitute the smallest number of Mortgage Loans as shall be required to make
such representation or warranty true and correct. The Purchase Price for any
repurchased Mortgage Loan shall be deposited into the Collection Account and the
Trust Administrator, upon (x) receipt of an Officers' Certificate of the Master
Servicer as to the making of such deposit and (y) confirmation that such deposit
has been made, shall release or cause to be released to the Depositor the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment as furnished by the Depositor, in each case without
recourse, as shall be necessary to vest in the Depositor title to any Mortgage
Loan released pursuant hereto, and neither the Trustee nor the Trust
Administrator shall have any further responsibility or liability (except as to
its own negligence or willful misconduct) with regard to such Mortgage File and
such Mortgage Loan.
(c) Within 90 days after the earlier of discovery by the
Master Servicer or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in Section
2.07 hereof, which breach materially and adversely affects the value of any
Mortgage Loan or the interests of the Certificateholders and the Certificate
Insurer therein, the Master Servicer shall (i) cure such breach in all material
respects or (ii) subject to the restrictions set forth in Section 2.06(d)
hereof, purchase any affected Mortgage Loan from the Trust at the Purchase
Price. The Purchase Price for the purchased Mortgage Loan shall be deposited by
the Master Servicer into the Collection Account, and the Trust Administrator,
upon (i) receipt of an Officers' Certificate of the Master Servicer as to the
making of such deposit and (ii) confirmation that such deposit has been made,
shall release or cause to be released to the Master Servicer the
43
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment as furnished by the Master Servicer, in each case
without recourse, as shall be necessary to vest in the Master Servicer title to
any Mortgage Loan released pursuant hereto, and neither the Trustee nor the
Trust Administrator shall have any further responsibility or liability (except
as to its own negligence or willful misconduct) with regard to such Mortgage
File and such Mortgage Loan.
(d) Any substitution of Qualified Substitute Mortgage Loans
for Deleted Mortgage Loans made pursuant to Section 2.06(a) or Section 2.06(b)
hereof must be effected prior to the date that is two years after the Startup
Date or such other period as may be specified therefor in the REMIC Provisions.
With respect to any Deleted Mortgage Loan for which the
Seller, the Depositor or the Master Servicer substitutes a Qualified Substitute
Mortgage Loan or Loans, such substitution shall be effected by the Seller, the
Depositor or the Master Servicer, as the case may be, by delivering to the Trust
Administrator for such Qualified Substitute Mortgage Loan or Loans the Mortgage
Note, the Mortgage, the related Assignment, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.04 hereof (or, in the case of a substitution by the Seller, as are required
under the Mortgage Loan Purchase Agreement), together with an Officers'
Certificate providing that each such Qualified Substitute Mortgage Loan
satisfies the definition thereof herein (or, in the case of a substitution by
the Seller, in the Mortgage Loan Purchase Agreement) and specifying the
Substitution Shortfall Amount as described below (or, in the case of a
substitution by the Seller, as described in the Mortgage Loan Purchase
Agreement), if any, in connection with such substitution. The Trust
Administrator, on behalf of the Trustee, shall acknowledge receipt of such
Qualified Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, shall review such documents (or shall cause such documents to be
reviewed) as specified in Section 2.04 hereof and shall deliver to the Seller,
the Depositor, the Master Servicer, the Trustee and the Certificate Insurer,
with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially similar to that made by the Trust Administrator in
the second paragraph of Section 2.05 hereof. Within one year after the date of
substitution, the Trust Administrator shall deliver to the Seller, the
Depositor, the Master Servicer, the Trustee and the Certificate Insurer a
certification in the form of Exhibit F-3 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans pursuant to Section 2.05 hereof. For the
Distribution Date relating to the month in which a substitution occurred,
Monthly Payments due with respect to Qualified Substitute Mortgage Loans during
the related Due Period are not part of the Trust Estate and will be retained by
the Seller, the Depositor or the Master Servicer, as the case may be. For the
Distribution Date relating to the month in which such of substitution occurred,
distributions to Certificateholders will reflect the Monthly Payment due on such
Deleted Mortgage Loan during the related Due Period and the Seller, the
Depositor or the Master Servicer, as the case may be, shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. The Trust Administrator shall give or cause to be given written
notice to the Certificate Insurer that such substitution has taken place, and
the Trust Administrator shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the Trust and the substitution of the
Qualified Substitute Mortgage Loan or Loans. Upon such substitution, such
44
Qualified Substitute Mortgage Loan or Loans shall be subject in all respects to
the terms of this Agreement, and (i) in the case of a substitution effected by
the Depositor or the Master Servicer, the Depositor or the Master Servicer, as
applicable, shall provide, for the benefit of the Trust and the Certificate
Insurer, the remedies set forth in Section 2.04 of the Mortgage Loan Purchase
Agreement, if any Qualified Substitute Mortgage Loan delivered by such Person
fails to comply with each representation and warranty set forth in Section
3.01(ii) of the Mortgage Loan Purchase Agreement, as if made as of the date of
substitution, to the same extent as if such person were the Seller of such
Qualified Substitute Mortgage Loan under the Mortgage Loan Purchase Agreement
and (ii) in the case of a substitution effected by the Seller, the Master
Servicer or the Trust Administrator, in accordance with Section 3.02(b), shall
enforce the obligations of the Seller under the Mortgage Loan Purchase Agreement
to make the representations and warranties set forth in Section 3.01(i) and
Section 3.01(ii) of the Mortgage Loan Purchase Agreement as of the date of
substitution and (iii) in the case of a substitution effected by the Depositor,
the Depositor shall make the representations and warranties set forth in Section
2.08 hereof as of the date of substitution.
For any month in which the Seller, the Depositor or the Master
Servicer substitutes one or more Qualified Substitute Mortgage Loans for one or
more Deleted Mortgage Loans, the Trust Administrator will determine, based upon
information supplied by the Master Servicer, and inform the Seller, the
Depositor or the Master Servicer, as the case may be, of, the amount (the
"Substitution Shortfall Amount"), if any, by which the aggregate Loan Balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Loan Balance of all such Deleted Mortgage Loans as of
such date plus the aggregate amount of all unreimbursed Servicing Advances and
Delinquency Advances relating to such Deleted Mortgage Loans as of such date. On
the date of such substitution, the Seller (as required by the Master Servicer in
accordance with the Mortgage Loan Purchase Agreement), the Depositor or the
Master Servicer, as the case may be, will deliver or cause to be delivered to
the Master Servicer for deposit into the Collection Account pursuant to Section
3.10(a)(x) hereof an amount equal to the Substitution Shortfall Amount, if any,
without any right of reimbursement therefor, and the Trust Administrator, upon
(i) receipt of (A) the related Qualified Substitute Mortgage Loan or Loans and
(B) an Officers' Certificate of the Master Servicer as to the deposit of such
Substitution Shortfall Amount into the Collection Account and (ii) confirmation
that such deposit has been made, shall release or cause to be released to the
Seller, the Depositor or the Master Servicer, as the case may be, the related
Mortgage File or Files and the Trustee shall execute and deliver such
instruments of transfer or assignment as are furnished by the Seller, the
Depositor or the Master Servicer in each case without recourse, as shall be
necessary to vest in the Seller, the Depositor or the Master Servicer, as the
case may be, title to any Deleted Mortgage Loan released pursuant hereto and
neither the Trustee nor the Trust Administrator shall have any further
responsibility or liability (except as to its own acts) with regard to such
Mortgage Loan.
Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan, no substitution pursuant to this Section 2.06
shall be made unless the Seller, the Depositor or the Master Servicer, as the
case may be, obtains an Independent Opinion of Counsel, addressed to the
Trustee, the Seller, the Depositor, the Master Servicer, the Trust Administrator
and
45
the Certificate Insurer, to the effect that such substitution would not (i)
result in the imposition of taxes on "prohibited transactions" of the REMIC
Trust, as defined in Section 860F of the Code, (ii) result in the imposition of
taxes on contributions to the Trust under Section 860G(d) of the Code, or (iii)
cause the Trust to fail to qualify as a REMIC at any time that any Certificates
are outstanding.
(e) Upon discovery by the Seller, the Depositor the Master
Servicer, the Trustee or the Trust Administrator that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the party discovering such fact shall, within two Business Days, give
written notice thereof to the other parties. In connection therewith, the Seller
(as required by the Master Servicer in accordance with the Mortgage Loan
Purchase Agreement) or the Depositor shall repurchase or, subject to the
limitations set forth in Section 2.06(d), substitute one or more Qualified
Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the
earlier of discovery or receipt of such notice with respect to such affected
Mortgage Loan. Such repurchase or substitution shall be made by (i) the Seller
if the affected Mortgage Loan's status as a non-qualified mortgage is or results
from a breach of any representation, warranty or covenant made by the Seller
under the Mortgage Loan Purchase Agreement, or (ii) the Depositor, if the
affected Mortgage Loan's status as a non-qualified mortgage is a breach of any
representation or warranty of the Depositor set forth in Section 2.08, or if its
status as a non-qualified mortgage is a breach of no representation or warranty.
Any such repurchase or substitution shall be made in the same manner as set
forth in Section 2.06(a), if made by the Seller, or Section 2.06(b), if made by
the Depositor. The Trustee and the Trust Administrator shall reconvey to the
Depositor or the Seller, as the case may be, the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as it
would a Mortgage Loan repurchased for breach of a representation or warranty.
Section 2.07. Representations, Warranties and Covenants of
the Master Servicer.
The Master Servicer hereby represents and warrants to and
covenants with the Trustee, the Trust Administrator, the Certificateholders, the
Depositor, each Subservicer and the Certificate Insurer that as of the Closing
Date or as of such date specifically provided herein:
(i) The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by the Master Servicer in any
state in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such State, to the extent
necessary to ensure its ability, or to cause a Subservicer, to enforce each
Mortgage Loan and to service the Mortgage Loans in accordance with the terms of
this Agreement;
(ii) The Master Servicer has the full power and
authority to conduct its business as presently conducted by it and to execute,
deliver and perform, and to enter into and consummate, all transactions
contemplated by this Agreement. The Master Servicer has duly
46
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement, assuming due
authorization, execution and delivery by the Trustee, the Trust Administrator
and the Depositor, constitutes the legal, valid and binding obligation of the
Master Servicer, enforceable against it in accordance with its terms except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity;
(iii) The execution and delivery of this Agreement by
the Master Servicer, the servicing of the Mortgage Loans by the Master Servicer
hereunder, the consummation by the Master Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Master Servicer and
will not (A) result in a breach of any term or provision of the charter or
by-laws of the Master Servicer or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which the Master Servicer is a party
or by which it may be bound, or any statute, order or regulation applicable to
the Master Servicer of any court, regulatory body, administrative agency or
governmental body have jurisdiction over the Master Servicer; and the Master
Servicer is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and adversely
affects or, to the Master Servicer's knowledge, would in the future materially
and adversely affect, (x) the ability of the Master Servicer to perform its
obligations under this Agreement or (y) the business, operations, financial
condition, properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is a HUD approved
mortgagee pursuant to Section 203 and Section 211 of the National Housing Act.
No event has occurred, including but not limited to a change in insurance
coverage, that would make the Master Servicer unable to comply with HUD
eligibility requirements or that would require notification to HUD;
(v) The collection practices used by the Master
Servicer with respect to the Mortgage Loans have been, in all material respects,
legal, proper, prudent and customary in the non-conforming mortgage servicing
business;
(vi) The Master Servicer does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant made by it and contained in this Agreement, it being understood that
certain of such covenants may be performed by a Subservicer pursuant to a
Subservicing Agreement between the Master Servicer and such Subservicer in
accordance with Section 3.02;
(vii) With respect to each Mortgage Loan, the Master
Servicer, or Subservicer, is in possession of a complete Mortgage File, except
for such documents as have been delivered to the Trust Administrator;
47
(viii) There are no actions or proceedings against,
or investigations known to it of, the Master Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of the transactions
contemplated by this Agreement or (C) that might prohibit or materially and
adversely affect the performance by the Master Servicer of its obligations
under, or validity or enforceability of, this Agreement;
(ix) As of the date of the Prospectus Supplement,
the information under the caption "The Originator and the Master Servicer" in
the Prospectus Supplement will contain no untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(x) 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 by it of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the Closing
Date;
(xi) The information set forth in the Prepayment
Charge Schedule (including the Prepayment Charge Summary attached thereto) is
complete, true and correct in all material respects on the date or dates when
such information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms (except to the extent that the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally or
the collectability thereof may be limited due to acceleration in connection with
a foreclosure) under applicable state law; and
(xii) The Master Servicer will not waive any
Prepayment Charge unless it is waived in accordance with the standard set forth
in Section 3.01.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.07 shall survive delivery
of the respective Mortgage Files to the Trust Administrator and shall inure to
the benefit of the Depositor, each Subservicer, the Certificateholders, the
Trustee, the Trust Administrator and the Certificate Insurer. Upon discovery by
any of the Depositor, the Master Servicer, the Trustee, the Trust Administrator
or the Certificate Insurer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the value of any
Mortgage Loan or the interests of the Certificateholders or the Certificate
Insurer therein, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the other parties. The obligations of the Master Servicer set forth in (x)
Section 2.06(c) hereof to cure any breach or to purchase or substitute for an
affected Mortgage Loan shall constitute the sole remedies available to the
Certificateholders, the Depositor, the Trustee, the Trust Administrator or the
Certificate Insurer respecting a breach of the representations, warranties and
covenants contained in this Section 2.07. Notwithstanding the foregoing, within
90 days of the earlier of discovery by the Master Servicer or receipt of notice
by
48
the Master Servicer of the breach of the representation or covenant of the
Master Servicer set forth in Sections 2.07(xi) or 2.07(xii) above which
materially and adversely affects the interests of the Holders of the
Certificates or the Certificate Insurer in any Prepayment Charge, the Master
Servicer shall remedy such breach as follows: (a) if the representation made by
the Master Servicer in Section 2.07(xi) above is breached and a Principal
Prepayment has occurred in the applicable Prepayment Period, the Master Servicer
must pay the amount of the scheduled Prepayment Charge, for the benefit of the
Holders of the Certificates and the Certificate Insurer, by depositing such
amount into the Collection Account, net of any amount previously collected by
the Master Servicer or paid by the Master Servicer, for the benefit of the
Holders of Certificates or the Certificate Insurer, in respect of such
Prepayment Charge; and (b) if any of the covenants made by the Master Servicer
in Section 2.07(xii) above is breached, the Master Servicer must remedy such
breach by paying the amount of the Prepayment Charge as to which such covenant
was breached, for the benefit of the Holders of the Certificates and the
Certificate Insurer, by depositing such amount into the Collection Account.
Section 2.08. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master
Servicer, each Subservicer, the Trust Administrator, the Trustee, the
Certificateholders and the Certificate Insurer, as of the Closing Date or as of
such date specifically provided herein, that:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has,
and had at all relevant times, full power to own its property, to carry on its
business as currently conducted, to enter into and perform its obligations under
this Agreement and to create the Trust pursuant hereto;
(b) The execution and delivery of this Agreement by the
Depositor and its performance of and compliance with the terms of this Agreement
will not violate the Depositor's certificate of incorporation or by-laws or
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 or acceleration of,
any material contract, agreement or other instrument to which the Depositor is a
party or which may be applicable to the Depositor or any of its assets;
(c) The Depositor has the full power and authority to enter
into and consummate the transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement, and has
duly executed and delivered this Agreement. This Agreement, assuming due
authorization, execution and delivery by the Trustee, the Trust Administrator
and the Master Servicer, constitutes a valid, legal and binding obligation of
the Depositor, enforceable against it in accordance with the terms hereof,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws relating to or
affecting the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);
49
(d) The Depositor is not in violation of, and the execution
and delivery of this Agreement by the Depositor and its performance and
compliance with the terms of this Agreement will not constitute a violation with
respect to, any order or decree of any court or any order or regulation of any
federal, state, municipal or other governmental agency having jurisdiction,
which violation would materially and adversely affect the condition (financial
or otherwise) or operations of the Depositor or its properties or materially and
adversely affect the performance of its duties hereunder;
(e) There are no actions or proceedings against, or
investigations of, the Depositor pending with regard to which the Depositor has
received service of process, or, to the knowledge of the Depositor, pending or
threatened, before any court, administrative agency or other tribunal (A) that,
if determined adversely, would prohibit its entering into this Agreement or
render the Certificates invalid, (B) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions contemplated by this
Agreement or (C) that, if determined adversely, would prohibit or materially and
adversely affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement or the Certificates;
(f) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the Certificates, or for the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders, if any, that have been obtained prior to the Closing
Date;
(g) The Depositor is solvent, is able to pay its debts as they
become due and has capital sufficient to carry on its business and its
obligations hereunder; it will not be rendered insolvent by the execution and
delivery of this Agreement or its obligations hereunder; no petition of
bankruptcy (or similar insolvency proceeding) has been filed by or against the
Depositor prior to the date hereof;
(h) The Depositor did not sell the Mortgage Loans to the Trust
with any intent to hinder, delay or defraud any of its creditors; the Depositor
will not be rendered insolvent as a result of the sale of the Mortgage Loans to
the Trust;
(i) As of the Closing Date, the Depositor had good title to,
and was the sole owner of, each Mortgage Loan free and clear of any lien other
than any such lien released simultaneously with the sale contemplated herein,
and, immediately upon each transfer and assignment herein contemplated, the
Depositor will have taken all steps necessary so that the Trust will have good
title to, and will be the sole owner of, each Mortgage Loan free and clear of
any lien;
(j) The Depositor acquired title to each of the Mortgage Loans
in good faith, without notice of any adverse claim;
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(k) No Officers' Certificate, statement, report or other
document prepared by the Depositor and furnished or to be furnished by it
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading;
(l) The Depositor is not required to be registered as an
"investment company" under the Investment Company Act of 1940, as amended;
(m) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Depositor pursuant to this Agreement are not
subject to the bulk transfer laws or any similar statutory provisions in effect
in any applicable jurisdiction;
(n) The information set forth in the Mortgage Loan Schedule
for the Mortgage Loans is complete, true and correct in all material respects at
the date or dates respecting which such information is furnished;
(o) Except with respect to approximately 0.29% of the Mortgage
Loans in Loan Group I, by Cut-off Date Loan Group Balance, which were 30 days or
more but less than 60 days Delinquent in their Monthly Payment as of August 31,
1999, the Monthly Payment due under each Mortgage Loan is not, as of August 31,
1999, 30 or more days Delinquent in payment and has not, as of August 31, 1999,
been 30 or more days Delinquent in payment more than once in the twelve month
period prior to August 31, 1999 (assuming that a "rolling" 30 day Delinquency is
considered to be Delinquent only once);
(p) Each Mortgage Loan had an original term to maturity of not
greater than 30 years;
(q) (A) No more than approximately 29.34%, approximately
9.10%, approximately 3.15%, approximately 4.17%, approximately 3.08%,
approximately 3.51% and approximately 10.00% of the Mortgage Loans in Loan Group
I by outstanding principal balance of the Mortgage Loans in Loan Group I as of
the Cut-off Date, will be secured by Mortgaged Properties located in California,
Florida, Georgia, Illinois, Ohio, Pennsylvania and Texas, respectively, and no
more than approximately 58.24%, approximately 9.61%, approximately 3.47% and
approximately 3.54% of the Mortgage Loans in Loan Group II by outstanding
principal balance of the Mortgage Loans in Loan Group II as of the Cut-off Date,
will be secured by Mortgaged Properties located in California, Florida, Texas
and Washington, respectively, and no more than 3.00% of the Mortgage Loans, by
outstanding principal balance of the Mortgage Loans as of the Cut-off Date, will
be secured by Mortgaged Properties located in any other state; (B) as of the
Cut-off Date, no more than approximately 0.35% of the Mortgage Loans in Loan
Group I and no more than approximately 1.43% of the Mortgage Loans in Loan Group
II, by outstanding principal balance of the Mortgage Loans as of the Cut-off
Date, are secured by Mortgaged Properties located in any one California zip code
area, and no more than approximately 13.18% of the Mortgage Loans in Loan Group
I and no more than approximately 12.25% of the Mortgage Loans in Loan Group II,
by outstanding principal
51
balance of the Mortgage Loans as of the Cut-off Date, are secured by units in
two- to four-family dwellings, condominiums, planned unit developments or
manufactured housing and (C) at least approximately 86.82% of the Mortgage Loans
in Loan Group I and at least approximately 87.75% of the Mortgage Loans in Loan
Group II, by outstanding principal balance of the Mortgage Loans as of the
Cut-off Date, are secured by real property with a single family residence
erected thereon;
(r) If the Mortgaged Property securing a Mortgage Loan is
located in an area identified in the Federal Register by the Federal Emergency
Management Agency ("FEMA") as having special flood hazards, as of the Closing
Date, such Mortgaged Property is covered by a flood insurance policy that met
the requirements of FEMA at the time such policy was issued;
(s) With respect to each Mortgage Loan in Loan Group I, the
Loan-to-Value Ratio was less than or equal to 95.00% at the origination of such
Mortgage Loan and with respect to each Mortgage Loan in Loan Group I, the
Loan-to-Value Ratio was less than or equal to 93.70% at the origination of such
Mortgage Loan; and
(t) With respect to at least approximately 90.01% of the
Mortgage Loans in Loan Group I and approximately 97.15% of the Mortgage Loans in
Loan Group II, by outstanding principal balance as of the Cut-off Date, at the
time that such Mortgage Loan was made, the Mortgagor represented that the
Mortgagor would occupy the Mortgaged Property as the Mortgagor's primary
residence. With respect to approximately 9.99% of the Mortgage Loans in Loan
Group I and approximately 2.86% of the Mortgage Loans in Loan Group II, by
outstanding principal balance as of the Cut-off Date, at the time that such
Mortgage Loan was made, the Mortgagor represented that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's secondary residence or that the
Mortgaged Property would be an investor property.
It is understood and agreed that the representations,
warranties and covenants set forth in this Section 2.08 shall survive delivery
of the respective Mortgage Files to the Trust Administrator and shall inure to
the benefit of the Master Servicer, each Subservicer, the Trustee, the
Certificateholders and the Certificate Insurer. Upon discovery by any of the
Depositor, the Master Servicer, each Subservicer, the Certificate Insurer or a
Responsible Officer of the Trustee who must have actual knowledge of a breach of
any of the representations and warranties set forth in this Section 2.08(h), (i)
and (j) with respect to any Mortgage Loan which materially and adversely affects
the value of any Mortgage Loan or the interests of the Certificateholders or the
Certificate Insurer therein, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the other parties.
Section 2.09. Execution of Certificates.
(a) The Trustee acknowledges the assignment to the Trust of
the Mortgage Loans and the delivery to it (or the Trust Administrator on its
behalf) of the Mortgage Files relating thereto, subject to the provisions of
Section 2.04 hereof, and, concurrently with such delivery, the Trust
Administrator has executed, authenticated and delivered to or upon the order of
the Depositor, in
52
exchange for such property, receipt of which is hereby acknowledged,
Certificates in authorized denominations evidencing ownership of the Trust.
(b) In connection with the issuance of the original
Certificates, the Depositor shall furnish the Trust Administrator with a Written
Order to Authenticate in the form set forth as Exhibit J hereto (a) directing
the Trust Administrator to issue the original Certificates to the Persons
designated in the Written Order to Authenticate and (b) informing the Trust
Administrator of the Percentage Interest with respect to the original Regular
Certificates and Class R Certificates.
Section 2.10. Designation of Interests in the Trust.
(a) The Preliminary Statement sets forth the designations and
"latest possible maturity date" for federal income tax purposes of the
Certificates created hereby. The "tax matters person" with respect to the Trust
hereunder shall be the Person set forth in Section 11.12. The fiscal year of the
Trust shall be the calendar year.
Each Class of Certificates (other than the Class R
Certificates) shall be designated as "regular interests" in the Trust and the
Class R Certificates shall be designated as the sole class of "residual
interests" in the Trust.
(b) The Closing Date is hereby designated as the "startup day"
of the Trust within the meaning of Section 860G(a)(9) of the Code.
(c) The Trust shall, for federal income tax purposes, maintain
books on a calendar year basis and report income on an accrual basis.
(d) The Trust shall elect to be treated as a REMIC under
Section 860D of the Code. Any inconsistencies or ambiguities in this Agreement
or in the administration of the Trust shall be resolved in a manner that
preserves the validity of such election to be treated as a REMIC.
(e) With respect to the REMIC, the Master Servicer shall
provide to the Trust Administrator and the Trust Administrator shall provide to
the Internal Revenue Service (the "IRS") and to the Person described in Section
860E(e)(3) and (6) of the Code the information described in Treasury Regulation
Section 1.860D-1(b)(5)(ii), or any successor regulation thereto and the Trust
Administrator shall be reimbursed by such Person for the cost of providing such
information. Such information will be provided in the manner described in
Treasury Regulation Section 1.860E-2(a)(5), or any successor regulation thereto.
The Trust Administrator shall have no responsibility or liability for incorrect
information supplied to the IRS where such information was supplied to the Trust
Administrator by the Master Servicer, and the Trust Administrator shall have no
responsibility or liability for information required to be supplied to the IRS
and not so supplied where such information was known to the Master Servicer and
not supplied by it despite the Trust Administrator's request for such
information.
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(f) The "latest maturity dates" for each Class of Regular
Certificates is the Distribution Date in the indicated month for the indicated
Class: (i) Class A-1: June 2018, (ii) Class A-2: Xxxxx 0000, (xxx) Class A-3:
March 2026, (iv) Class A-4: September 2028, (v) Class A-5: August 2029, (vi)
Class A-6: May 2029 and (vii) Class A-7: June 2029.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST
Section 3.01. Administration of the Trust; Servicing of
the Mortgage Loans.
(a) The parties hereto intend that the Trust shall constitute,
and that the affairs of the Trust shall be conducted so as to qualify the Trust
as a REMIC in accordance with the REMIC Provisions. In furtherance of such
intention, each of the parties hereto covenants and agrees that it shall not
knowingly take any actions or omit to take any actions that would disqualify the
Trust for REMIC election or status and the Master Servicer covenants and agrees
that it shall act, in its capacity as agent of the Tax Matters Person, as agent
for the Trust, and as agent of the "tax matters person" (as defined in the REMIC
Provisions) and that in such capacity it shall: (i) prepare or cause to be
prepared, execute and file, in a timely manner, an annual Tax Return and any
other Tax Return required to be filed by the Trust established hereunder using a
calendar year as the taxable year for the Trust established hereunder; (ii) in
the related first such Tax Return, make (or cause to be made) an election with
respect to the Trust satisfying the requirements of the REMIC Provisions, on
behalf of the Trust, to be treated as a REMIC; (iii) prepare and forward, or
cause to be prepared and forwarded, to the Certificateholders all information,
reports or Tax Returns required with respect to the Trust as, when and in the
form required to be provided to the Certificateholders and to the Internal
Revenue Service and any other relevant governmental taxing authority in
accordance with the REMIC Provisions and any other applicable federal, state or
local laws, including, without limitation, information reports relating to
"original issue discount" as defined in the Code based upon the Prepayment
Assumption and calculated by using the "Issue Price" (within the meaning of
Section 1275 of the Code) of the Certificates of the related Class; (iv) not
knowingly take any action or omit to take any action that would cause the
termination of the REMIC status of the Trust, except as provided under this
Agreement; (v) pay, from the sources specified in the last paragraph of this
Section 3.01(a), the amount of any and all other federal, state and local taxes
imposed on the Trust, their assets or transactions, including, without
limitation, the tax on "prohibited transactions" imposed by Section 860F of the
Code, the tax on "contributions" imposed by Section 860G(d) of the Code and the
tax on "net income from foreclosure property" imposed by Section 860G(c) of the
Code when and as the same shall be due and payable (but such obligation shall
not prevent the Trustee, the Trust Administrator or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Trustee or the Trust Administrator from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings); (vi) represent the
Trust in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to a taxable year of the Trust, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust, and otherwise act on behalf of the Trust in
relation to any tax matter involving the Trust; (vii) comply with all statutory
or regulatory requirements with regard to its conduct of activities pursuant to
the foregoing clauses of this Section
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3.01(a), including, without limitation, providing all notices and other
information to the Internal Revenue Service and Holders of Class R Certificates
required of a "tax matters person" pursuant to subtitle F of the Code and the
Treasury Regulations thereunder; and (viii) make available information necessary
for the computation of any tax imposed (A) on a transferor of Class R
Certificates to certain Disqualified Organizations or (B) on pass-through
entities, any interest in which is held by a Disqualified Organization. The
obligations of the Master Servicer pursuant to this Section 3.01(a) shall
survive the termination or discharge of this Agreement.
In order to enable the Master Servicer to perform its duties
as set forth herein, the Depositor shall provide or cause to be provided to the
Master Servicer or its designee, within ten (10) days after the Closing Date,
all information or data that the Master Servicer or its designee reasonably
determines to be relevant for tax purposes as to the valuations and offering
prices of the Certificates, including, without limitation, the price, yield,
Prepayment Assumption and projected cash flows of the Certificates and the
Mortgage Loans. Thereafter, the Depositor shall provide to the Master Servicer,
promptly upon request therefor, any such additional information or data that the
Master Servicer may from time to time reasonably request in order to enable the
Master Servicer to perform its duties as set forth herein. The Depositor shall
indemnify the Master Servicer and hold it harmless for any loss, liability,
damage, claim or expense of the Master Servicer arising from any failure of it
to provide, or to cause to be provided, on a timely basis in response to the
reasonable requests of the Master Servicer made pursuant to this paragraph,
accurate information or data to the Master Servicer. The indemnification
provisions hereunder shall survive the termination of this Agreement.
In the event that any tax is imposed on "prohibited
transactions" of the Trust as defined in Section 860F(a)(2) of the Code, on the
"net income from foreclosure property" of the Trust as defined in Section
860G(c) of the Code, on any gain recognized by the Trust pursuant to Section
860F(c) of the Code, on any contribution to the Trust after the Startup Date
pursuant to Section 860G(d) of the Code, or any other tax is imposed, if not
paid as otherwise provided for herein, such tax shall be paid by (i) the
Trustee, if any such tax arises out of or results from the willful malfeasance,
bad faith or negligence in the performance by the Trustee of any of its
obligations hereunder, (ii) the Trust Administrator, if any such tax arises out
of or results from the willful malfeasance, bad faith or negligence in the
performance by the Trust Administrator of any of its obligations hereunder,
(iii) the Master Servicer or the Depositor, as applicable, if such tax arises
out of or results from a breach by the Master Servicer or the Depositor of any
of their respective obligations under this Agreement or (iv) in all other cases,
or in the event that the Master Servicer, the Trustee, the Trust Administrator
or the Depositor fails to honor its obligations under the preceding clauses (i)
or (ii), any such tax will be paid with amounts otherwise to be distributed to
the Holders of the Class R Certificates pursuant to Section 4.04(b) hereof or,
in the event of an insufficiency in such amounts, such tax shall be paid
directly by such Class R Certificateholders.
(b) (i) The Master Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans and in accordance with the instructions of the Trustee, the Trust
Administrator and the Certificate Insurer
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and, upon receipt of any such instructions from the Trust Administrator, the
Trustee and the Certificate Insurer, shall be fully protected against any
liability arising from, and shall be allowed to conclusively rely upon, such
instructions. Unless otherwise specified herein with respect to specific
obligations of the Master Servicer, the Master Servicer shall service and
administer the Mortgage Loans in the best interests of and for the benefit of
the Holders and the Certificate Insurer in the same manner in which it services
and administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(A) any relationship that the Master
Servicer, any Subservicer or any Affiliate of the
Master Servicer or any Subservicer may have with the
related Mortgagor;
(B) the ownership or non-ownership of any
Certificate by the Master Servicer or any affiliate
of the Master Servicer;
(C) the Master Servicer's obligation to make
Delinquency Advances or Servicing Advances; or
(D) the Master Servicer's or any
Subservicer's right to receive compensation for its
services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Master
Servicer also shall seek to maximize the timely and complete recovery of
principal and interest on the Mortgage Notes. Subject only to the
above-described servicing standards and the terms of this Agreement and the
respective Mortgage Loans, the Master Servicer shall have full power and
authority, acting alone and/or through Subservicers as provided in Section 3.02
hereof, to do or cause to be done any and all things in connection with such
servicing and administration which it may deem necessary or desirable. The
Master Servicer shall promptly notify the Depositor, the Trustee, the Trust
Administrator, the Certificate Insurer and each Rating Agency in writing of (A)
any event, circumstance or occurrence which may materially and adversely affect
the ability of the Master Servicer to service any Mortgage Loan or otherwise to
perform and carry out its duties, responsibilities and obligations under and in
accordance with this Agreement and (B) any attempt by a court or by a regulatory
authority of which it has actual knowledge to assert jurisdiction over the
Trust.
Without limiting the generality of the foregoing, the Master
Servicer, in its own name or in the name of a Subservicer, is hereby authorized
and empowered, when the Master Servicer believes it appropriate in its best
judgment and subject to the requirements of Section 3.07 hereof, to execute and
deliver, on behalf of the Certificateholders and the Trust or any of them, and
upon notice to the Trustee and the Trust Administrator, any and all instruments
of satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Mortgage Loans and the
Mortgaged Properties and to institute foreclosure proceedings
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or obtain a deed in lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trust and Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16 hereof, the Trustee
shall execute, at the written direction of the Master Servicer, and furnish to
the Master Servicer and any Subservicer any limited or special powers of
attorney and other documents reasonably acceptable to the Trustee to enable the
Master Servicer or any Subservicer to carry out their servicing and
administrative duties hereunder, including, without limitation, limited or
special powers of attorney with respect to any REO Property, and the Trustee
shall not be accountable, or have any liability, for the actions of the Master
Servicer or any Subservicers under such powers of attorney.
(ii) Subject to Section 3.24 hereof and in accordance with the
standards of the preceding paragraph, the Master Servicer shall make, or cause
to be made, Servicing Advances as necessary for the purpose of effecting the
payment of taxes and assessments on the Mortgaged Properties which Servicing
Advances shall be made in a timely fashion so as to not adversely affect the
value of the Mortgaged Property or the interests of the Certificateholders and
which Servicing Advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09 hereof, and
further as provided in Section 3.11 hereof; provided, however, that the Master
Servicer shall not be required to make any Nonrecoverable Servicing Advance, as
determined by the Master Servicer in its reasonable good faith business
judgment. Any cost incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the Loan Balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(iii) Notwithstanding anything in this Agreement
to the contrary, the Master Servicer shall not make any future advances to the
Mortgagor with respect to a Mortgage Loan, and the Master Servicer shall not (a)
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance or change the maturity
date on such Mortgage Loan, unless the Mortgagor is in default with respect to
the Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable or (b) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both effect an exchange or reissuance
of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations
promulgated thereunder) and cause the Trust to fail to qualify as a REMIC under
the Code or the imposition of any tax on "prohibited transactions" or
contributions after the startup date" under the REMIC Provisions.
(iv) All accounting and loan servicing records
pertaining to each Mortgage Loan shall be maintained in such manner as will
permit the Trustee, the Trust Administrator, the Depositor, the
Certificateholders, the Certificate Insurer or their duly authorized
representatives and
58
designees to examine and audit and make legible reproductions of records during
reasonable business hours. All such records shall be maintained until the
termination of this Agreement or such longer period as is required under
applicable law, including, but not limited to, all transaction registers and
loan ledger histories.
The Master Servicer may delegate its responsibilities
under this Agreement; provided, however, that no such delegation shall release
the Master Servicer from the responsibilities or liabilities arising under this
Agreement and no delegation that would result in the delegee being a Subservicer
is permitted except pursuant to Section 3.02.
(c) The Master Servicer shall not take any action to solicit
the refinancing of any Mortgage Loan included in the Trust Estate, except under
the circumstances specifically set forth herein. It is understood and agreed
that promotions undertaken by the Master Servicer which are directed to the
general public at large, or designated segments thereof, including without
limitation mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements and offers to refinance made
following receipt by Master Servicer of notice that the borrower was planning to
refinance with another lender shall not constitute solicitation under this
Section.
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers.
(a) The Master Servicer may with the consent of the
Certificate Insurer enter into Subservicing Agreements with Subservicers for the
servicing and administration of the Mortgage Loans; provided, however, that such
agreements would not result in a withdrawal or a downgrading by any Rating
Agency of the rating on any Class of Certificates. The Trustee and the Trust
Administrator are hereby authorized to acknowledge, at the request of the Master
Servicer, any Subservicing Agreement that meets the requirements applicable to
Subservicing Agreements set forth in this Agreement and that is otherwise
permitted under this Agreement.
Each Subservicer shall be (i) authorized to transact business
in the state or states where the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer and (iii)
have equity of at least $5,000,000. Each Subservicing Agreement must impose on
the Subservicer requirements conforming to the provisions set forth in Section
3.08 and provide for servicing of the Mortgage Loans consistent with the terms
of this Agreement and be approved in writing by the Certificate Insurer. The
Master Servicer will examine each Subservicing Agreement and will be familiar
with the terms thereof. The Master Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into different forms
of Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement and be approved in writing by the Certificate Insurer, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Certificate
Insurer or
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Certificateholders without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights; provided, further, that the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights shall not
be required (i) to cure any ambiguity or defect in a Subservicing Agreement,
(ii) to correct, modify or supplement any provisions of a Subservicing
Agreement, or (iii) to make any other provisions with respect to matters or
questions arising under a Subservicing Agreement, which, in each case, shall not
be inconsistent with the provisions of this Agreement. Any variation without the
consent of the Certificate Insurer from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Subservicing Accounts, or
credits and charges to the Subservicing Accounts or the timing and amount of
remittances by the Subservicers to the Master Servicer, are conclusively deemed
to be inconsistent with this Agreement and therefore prohibited. The Master
Servicer shall deliver to the Trustee and the Trust Administrator copies of all
Subservicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee, the Depositor, the Trust
Administrator, the Certificateholders and the Certificate Insurer, shall enforce
the obligations of each Subservicer under the related Subservicing Agreement and
of the Seller under the Mortgage Loan Purchase Agreement including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Subservicing Agreement or to purchase a Mortgage Loan on account
of missing or defective documentation or on account of a breach of a
representation, warranty or covenant, as described in Section 2.06. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such extent and at such time
as the Master Servicer, in its good faith business judgment, would require were
it the owner of the related Mortgage Loans. The Master Servicer shall pay the
costs of such enforcement at its own expense, and shall be reimbursed therefor
only (i) from a general recovery resulting from such enforcement, to the extent,
if any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans, or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the Person against which such enforcement is directed.
Notwithstanding anything to the contrary herein, however, enforcement of the
Mortgage Loan Purchase Agreement against the Seller shall be effected by the
Master Servicer to the extent it is not an affiliate of the Seller, and
otherwise by the Trust Administrator in accordance with the foregoing provisions
of this paragraph. If such enforcement is conducted by the Trust Administrator,
the Trust Administrator shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement, to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans, or (ii) from a
specific recovery of costs, expenses or attorneys' fees against the Person
against which such enforcement is directed; provided, however, if the sources of
reimbursement described in clauses (i) and (ii) are insufficient, the Master
Servicer shall reimburse the Trust Administrator for any remaining unreimbursed
costs of such enforcement.
Section 3.03. Successor Subservicers, Termination of Subservicing
Agreement.
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Each Subservicing Agreement shall provide that the Subservicer
will not resign without the consent of the Certificate Insurer. The Master
Servicer shall be entitled to terminate any Subservicing Agreement and the
rights and obligations of any Subservicer pursuant to any Subservicing Agreement
in accordance with the terms and conditions of such Subservicing Agreement with
the written consent of the Certificate Insurer. In the event of resignation or
termination of any Subservicer, all servicing obligations of such Subservicer
shall be assumed simultaneously by the Master Servicer without any act or deed
on the part of such Subservicer or the Master Servicer, and the Master Servicer
shall either service directly the related Mortgage Loans or shall enter, with
the consent of the Certificate Insurer, into a Subservicing Agreement with a
successor Subservicer pursuant to Section 3.02.
Any Subservicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee or the Trust
Administrator (if the Trust Administrator is acting as Master Servicer) at the
request of the Certificate Insurer, without cost to the Trust, in the event that
the Master Servicer shall, for any reason, no longer be the Master Servicer
(including termination due to a Master Servicer Default).
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement or any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Subservicer, or reference to actions taken through a
Subservicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee, the Trust Administrator, the Certificateholders
and the Certificate Insurer for the servicing and administering of the Mortgage
Loans in accordance with the provisions of this Article III without diminution
of such obligation or liability by virtue of such Subservicing Agreements or
arrangements, or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. The Master Servicer
shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Master Servicer by such Subservicer and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between
Subservicers and Trust Administrator, Trustee or Certificateholders.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Master Servicer alone, and the Trust Administrator, the Trustee, the
Certificateholders and the Certificate Insurer shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the Subservicer except as set forth in Sections 3.03 and 3.06
The Master Servicer shall be solely liable for all fees owed by it to any
Subservicer, irrespective of whether the Master Servicer's compensation pursuant
to this Agreement is sufficient to pay such fees.
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Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
Trust Administrator.
In the event the Master Servicer shall for any reason no
longer be the Master Servicer (including by reason of the occurrence of a Master
Servicer Default), the Trust Administrator or any designee consented to by the
Certificate Insurer, or if a Certificate Insurer Default has occurred and is
continuing, consented to by the Majority Certificateholders, shall thereupon
assume all of the rights and obligations of the Master Servicer under each
Subservicing Agreement that the Master Servicer may have entered into, unless
the Trust Administrator (with the consent of the Certificate Insurer) elects to
terminate any Subservicing Agreement in accordance with its terms as provided in
Section 3.03 or unless the Trust Administrator is directed by the Certificate
Insurer to terminate any Sub-Servicing Agreement, and each Subservicing
Agreement shall so provide. Upon such assumption, the Trust Administrator, its
designee or the successor servicer for the Trust Administrator appointed
pursuant to Section 7.02 shall be deemed, subject to Section 3.03, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Subservicing Agreement to the same extent as
if each Subservicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Subservicing Agreement that arose before it ceased to be
the Master Servicer and (ii) none of the Trust Administrator, its designee or
any successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the
Trust Administrator, deliver to the assuming party all documents and records
relating to each Subservicing Agreement and the Mortgage Loans then being
serviced and an accounting of amounts collected and held by or on behalf of and
otherwise use its best efforts to effect the orderly and efficient transfer of
the Subservicing Agreements to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans held for its own account. Consistent with the
foregoing, the Master Servicer may in its discretion (i) waive any late payment
charge or, if applicable, any penalty interest, or (ii) extend the due dates for
the Monthly Payments due on a Mortgage Note for a period of not greater than 180
days; provided, however, that any extension pursuant to clause (ii) above shall
not affect the amortization schedule of any Mortgage Loan for purposes of any
computation hereunder, except as provided below; and provided further, that the
Master Servicer shall not waive any Prepayment Charge provision included in a
Mortgage Note unless the Master Servicer determines, in its best reasonable
judgement, that the related Mortgagor will be in imminent default of all future
payments of principal and interest under the terms of the related Mortgage Note.
In the event of any such
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arrangement pursuant to clause (ii) above, the Master Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.06
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangement. Notwithstanding the
foregoing, in the event that any Mortgage Loan is in default or, in the judgment
of the Master Servicer, such default is reasonably foreseeable, the Master
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term (other than the waiver of any Prepayment Charge)
of such Mortgage Loan (including modifications that would change the Mortgage
Rate, forgive the payment of principal or interest or extend the final maturity
date of such Mortgage Loan), accept payment from the related Mortgagor of an
amount less than the then outstanding Loan Balance in final satisfaction of such
Mortgage Loan (such payment, a "Short Pay-off"), or consent to the postponement
of strict compliance with any such term or otherwise grant indulgence to any
Mortgagor if in the Master Servicer's determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Certificateholders or the Certificate Insurer (taking into account any estimated
Realized Loss that might result absent such action). The Master Servicer shall
give the Certificate Insurer prompt written notice of any such action.
Section 3.08. Subservicing Accounts.
In those cases where a Subservicer is servicing a Mortgage
Loan pursuant to a Subservicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Subservicing
Account"). The Sub-Servicing Account shall be in the name of the Trust
Administrator on behalf of the Trustee for the benefit of the Certificateholders
and the Certificate Insurer, and shall be an Eligible Account and shall comply
with all requirements of this Agreement relating to the Collection Account. The
Subservicer shall deposit in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Subservicer's receipt thereof, all proceeds of
Mortgage Loans received by the Subservicer, less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the receipt of such amounts. The Subservicer shall thereafter deposit
such proceeds in the Collection Account or remit such proceeds to the Master
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amount in the Subservicing Account. For purposes of
this Agreement, the Master Servicer shall be deemed to have received payments on
the Mortgage Loans when the Subservicer receives such payments.
Section 3.09. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts.
The Master Servicer shall establish and maintain, or cause to
be established and maintained one or more accounts (the "Servicing Accounts"),
into which all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
63
shall be deposited and retained. Servicing Accounts shall be Eligible Accounts.
The Master Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, all
Escrow Payments collected on account of the Mortgage Loans and shall thereafter
deposit such Escrow Payments in the Servicing Accounts, in no event more than
two Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
timely payment of any such items as required under the terms of this Agreement.
Withdrawals of amounts from a Servicing Account may be made only to (i) effect
timely payment of taxes, assessments, hazard insurance premiums and comparable
items; (ii) reimburse the Master Servicer (or a Subservicer to the extent
provided in the related Subservicing Agreement) out of related collections for
any advances made pursuant to Section 3.01(b) hereof (with respect to taxes and
assessments) and Section 3.13 hereof (with respect to hazard insurance); (iii)
refund to Mortgagors any sums as may be determined to be overages; (iv) pay
interest, if required and as described below, to Mortgagors on balances in the
Servicing Account; or (v) clear and terminate the Servicing Account at the
termination of the Master Servicer's obligations and responsibilities in respect
of the Mortgage Loans under this Agreement in accordance with Section 10.01
hereof. As part of its servicing duties, the Master Servicer or Subservicers
shall pay to the Mortgagors interest on funds in Servicing Accounts, to the
extent required by law and, to the extent that interest earned on funds in the
Servicing Accounts is insufficient, to pay such interest from its or their own
funds, without any reimbursement thereof.
Section 3.10. Collection Account.
(a) On behalf of the Trust, the Master Servicer shall
establish and maintain, or cause to be established and maintained, one or more
accounts to conform to the definition of Collection Account, held in the name of
the Trust Administrator on behalf of the Trustee, as Trustee for New Century
Home Equity Loan Trust, Series 1999-NCB, in trust for the benefit of the
Certificateholders and the Certificate Insurer, as their interests may appear.
On behalf of the Trust, the Master Servicer shall deposit or cause to be
deposited in the clearing account in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Master Servicer's receipt thereof, and shall thereafter deposit in the
Collection Account, in no event more than two Business Days after the Master
Servicer's receipt thereof, as and when received or as otherwise required
hereunder, the following payments and collections received or required to be
made by it subsequent to the applicable Cut-off Date with respect to any
Mortgage Loan (other than in respect of principal or interest on any Mortgage
Loan due on or before such Cut-off Date), or payments (other than Principal
Prepayments) received by it on or prior to such Cut-off Date which are due after
such Cut-off Date.
(i) (A) all payments on account of scheduled
principal (including amounts deemed to represent scheduled principal with
respect to REO Property) that are due
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subsequent to the Cut-off Date on the Mortgage Loans and (B) all Principal
Prepayments on the Mortgage Loans received on or after the Cut-off Date;
(ii) all payments on account of interest (net of the
related Servicing Fee) that are due subsequent to the applicable Cut-off Date
(other than Retained Interest);
(iii) any Net Recovery Proceeds;
(iv) any amounts required to be deposited pursuant to
Section 3.23 hereof by the Master Servicer in connection with any Prepayment
Interest Shortfalls in respect of the Mortgage Loans;
(v) any amounts required to be deposited by the
Master Servicer in connection with any losses on investment of funds in the
Collection Account pursuant to subsection (b) below;
(vi) any amounts required to be deposited by the
Master Servicer pursuant to the fourth paragraph of Section 3.13 hereof in
respect of any blanket policy deductibles;
(vii) all proceeds of any Mortgage Loans or property
acquired in respect of Mortgage Loans through foreclosure and purchased by the
Master Servicer;
(viii) all Prepayment Charges (other than any
Retained Prepayment Charges), if any, collected in respect of any Principal
Prepayment made by a Mortgagor during the related Prepayment Period;
(ix) all Delinquency Advances with respect to the
Mortgage Loans, as required by Section 4.06 hereof; and
(x) all Purchase Prices paid by the Depositor, the
Seller or the Master Servicer in respect of repurchases of the Mortgage Loans
and all Substitution Shortfall Amounts paid by the Depositor, the Seller or the
Master Servicer in respect of the Mortgage Loans.
For purposes of the immediately preceding sentence, the
Cut-off Date with respect to any Qualified Substitute Mortgage Loan shall be
deemed to be the date of substitution, but the unpaid principal balance of such
Qualified Substitute Mortgage Loan shall not include the principal portion of
any Monthly Payment made, or the scheduled principal portion of any Monthly
Payment that was due to be made but was not received by the Master Servicer, in
such month of substitution.
Notwithstanding any other provision herein, the amounts of
principal and interest payments due on the Mortgage Loans on or before the
applicable Cut-off Date need not be deposited into the Collection Account by the
Master Servicer.
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The foregoing requirements for deposit in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges, penalty interest, extension fees, modification fees, assumption fees or
insufficient-funds charges need not be deposited by the Master Servicer into the
Collection Account.
(b) Not later than 12:00 noon, New York time, on each Master
Servicer Remittance Date the Master Servicer shall deposit in the Collection
Account the amount of any net loss incurred in connection with the investment of
funds in the Collection Account since the prior Master Servicer Remittance Date;
such amounts shall be funded from the Master Servicer's own funds without any
right to reimbursement. The Master Servicer shall give prompt notice to each of
the Rating Agencies and the Underwriters of the amount of any such net loss.
(c) Funds in the Collection Account shall be invested in
Permitted Investments in accordance with the provisions set forth in Section
3.12 hereof. The Master Servicer shall give notice to the Trustee, the Trust
Administrator, the Underwriters, the Certificateholders, the Depositor and the
Certificate Insurer of the location of the Collection Account on or before the
Closing Date, and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trust Administrator for deposit in the
Certificate Account and for all purposes of this Agreement shall be deemed to be
a part of the Collection Account; provided, however, that the Trustee and the
Trust Administrator shall have the sole authority to withdraw any funds held
pursuant to this subsection (d). In the event the Master Servicer shall deliver
to the Trust Administrator for deposit in the Certificate Account any amount not
required to be deposited therein or in the Collection Account, it may at any
time request that the Trust Administrator withdraw such amount from the
Certificate Account and remit to it any such amount, any provision herein to the
contrary notwithstanding.
Section 3.11. Withdrawals from the Collection Account.
The Master Servicer, or the Trust Administrator at the written
request of the Master Servicer, shall, from time to time, make withdrawals from
the Collection Account for any of the following purposes:
(i) to deposit into the Certificate Account
prior to 3:00 p.m., New York time, on the Master Servicer Remittance Date
immediately preceding each Distribution Date (after having received Delinquency
Advances for such period) the Interest Remittance Amount, the Principal
Remittance Amount and any amounts representing Prepayment Charges relating to
Principal Prepayments that occurred during the related Prepayment Period, net of
amounts to be paid as follows:
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(A) to pay to the Master Servicer, the
Seller or the Depositor, as the case may be, with
respect to each Mortgage Loan that has previously
been purchased or replaced pursuant to Section 2.06
or Section 3.15(c) hereof all amounts received
thereon in any month subsequent to the month of such
purchase or substitution, as the case may be;
(B) to reimburse the Master Servicer for any
Delinquency Advance or Servicing Advance previously
made that the Master Servicer has determined to be a
Nonrecoverable Delinquency Advance or a
Nonrecoverable Servicing Advance;
(C) to reimburse the Seller, the Depositor
and the Master Servicer for losses, liabilities,
costs and expenses reimbursable to them pursuant to
Section 6.03 hereof; and
(D) to reimburse the Trust Administrator for
the costs of recording any Assignment pursuant to the
fifth paragraph of Section 2.02(b) to the extent that
the Master Servicer fails to pay such cost.
(ii) to pay to the Master Servicer (x) when
collected on the related Mortgage Loan, all recovered and previously
unreimbursed Delinquency Advances and Servicing Advances (but only to the extent
received from the related Mortgagor), and (y) any interest or investment income
earned on funds deposited in the Collection Account (net of investment losses);
(iii) to reimburse the Master Servicer, the Trustee
or the Trust Administrator, as the case may be, for expenses reasonably incurred
in respect of any breach or defect giving rise to the purchase obligation under
Section 2.06 hereof that were included in the Purchase Price of the Mortgage
Loan, including any expenses arising out of the enforcement of the purchase
obligation, but only to the extent included in the related Purchase Price;
(iv) to pay to the Master Servicer the excess, if
any, of any Net Recovery Proceeds over the Loan Balance of the related Mortgage
Loan plus any accrued and unpaid interest thereon that was not advanced as part
of a Delinquency Advance, to the extent any such excess was deposited into the
Collection Account;
(v) to withdraw any amount not required to be
deposited into the Collection Account, which amount shall include all interest
payments as to which the related Due Date occurs on or prior to the applicable
Cut-off Date and amounts payable to the Master Servicer from the REO Account
pursuant to Section 3.22(d);
(vi) to clear and terminate the Collection
Account pursuant to Section 10.01 hereof; and
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(vii) in the event of a prepayment or satisfaction of
a Mortgage Loan, to pay the refunds and expenses to which the Mortgagor is
entitled as set forth on requests submitted by the Master Servicer.
Section 3.12. Investment of Funds in the Accounts.
(a) The Master Servicer may direct in writing any depository
institution maintaining the Collection Account or the Certificate Account to
invest the funds held therein in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) if
such Permitted Investments are not obligations of the institution maintaining
the account from which the funds are required to be withdrawn, no later than the
Business Day immediately preceding the earliest date on which such funds may be
required to be withdrawn from such account pursuant to this Agreement but in no
event later than the Business Day immediately preceding the next Master Servicer
Remittance Date or Distribution Date, as applicable, and (ii) if such Permitted
Investments are obligations of the institution maintaining the account from
which the funds are required to be withdrawn, no later than the earliest date on
which such funds may be required to be withdrawn from such account pursuant to
this Agreement. All such Permitted Investments shall be held to maturity, unless
payable on demand.
If the Master Servicer, with respect to the Collection Account
or the Certificate Account, does not provide investment directions to the
depository institution with respect to the funds on deposit therein, such funds
shall be invested in the Permitted Investments specified in clause (v) of the
definition thereof, which may be administered by an affiliate of such depository
institution.
Any investment of funds on deposit in any Account shall be
made in the name of the Trust Administrator (in its capacity as such), as agent
for the Trustee, or in the name of a nominee of the Trust Administrator, in each
case in trust for the benefit of the Certificateholders. With respect to any
Account held by the Trust Administrator, the Trust Administrator shall have sole
control (except with respect to investment direction) over each such investment,
and any certificate or other instrument evidencing any such investment shall be
delivered directly to the Trust Administrator or its agent, together with any
document of transfer necessary to transfer title to such investment to the Trust
Administrator or its nominee. In the event amounts from funds on deposit in any
Account are at any time invested in a Permitted Investment payable on demand,
the Trust Administrator shall:
(i) consistent with any notice required to be
given thereunder, demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an amount equal to the
lesser of (1) all amounts then payable thereunder and (2) the amount required to
be withdrawn on such date; and
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(ii) demand payment of all amounts due thereunder
promptly by a Responsible Officer of the Trust Administrator having actual
knowledge that such Permitted Investment would not constitute a Permitted
Investment.
(b) All net income and net gain realized from investment of
funds deposited in the Collection Account and the Certificate Account shall be
for the benefit of the Master Servicer and shall be subject to its withdrawal in
accordance with Section 3.11 and Section 4.04(a)(ii) hereof, respectively.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee or the Trust Administrator shall take such
action as it is directed in writing by the Master Servicer, as appropriate, to
take in order to enforce such payment or performance, including the initiation
and prosecution of appropriate proceedings; provided, however, that the Trustee
and the Trust Administrator shall be indemnified and reimbursed for any related
costs, expenses, losses or liabilities as provided in Section 8.05 hereof.
Section 3.13. Maintenance of Hazard Insurance and Errors
and Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan hazard insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the lesser of the Loan Balance
of such Mortgage Loan and the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any co-insurance clause contained in
the related hazard insurance policy. The Master Servicer shall also cause to be
maintained hazard insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable value
of the improvements which are part of such property and (ii) the Loan Balance of
the related Mortgage Loan at the time it became an REO Property, plus accrued
interest at the Mortgage Rate and related Servicing Advances. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies.
Any amounts to be collected by the Master Servicer under any
such policies (other than amounts to be applied to the restoration or repair of
the related Mortgaged Property or amounts to be released to the Mortgagor in
accordance with the procedure that the Master Servicer would follow in servicing
loans for its own account, subject to the terms and conditions of the related
Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11 hereof.
Any cost incurred by the Master Servicer in maintaining any
such insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the Loan Balance of
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the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan
so permit. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Mortgaged Property or REO Property is
located at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards and flood insurance
has been made available, the Master Servicer will cause to be maintained a flood
insurance policy in respect thereof. Such flood insurance shall be in an amount
equal to the lesser of (i) the Loan Balance of the related Mortgage Loan and,
(ii) the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program).
In the event that the Master Servicer shall obtain and
maintain (at its own expense) a blanket policy with an insurer having a General
Policy Rating of A:X or better in Best's Key Rating Guide (or such other rating
that is comparable to such rating) insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause in
which case the Master Servicer shall, in the event that there shall not have
been maintained on the related Mortgaged Property or REO Property a policy
complying with the first two sentences of this Section 3.13, and there shall
have been one or more losses which would have been covered by such policy,
deposit into the Collection Account from its own funds without any right of
reimbursement therefor the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and the
Certificateholders, claims under any such blanket policy in a timely fashion in
accordance with the terms of such policy.
(b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if either of them were the
purchaser of the Mortgage Loans, unless the Master Servicer has obtained a
waiver of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The Master Servicer
shall also maintain a fidelity bond in the form and amount that would meet the
requirements of Xxxxxx Mae or Xxxxxxx Mac, unless the Master Servicer has
obtained a waiver of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The
Master Servicer shall be deemed to have complied with this provision if an
affiliate of the Master Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Master Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days' prior written notice to the Trustee, the Trust Administrator and
the Certificate Insurer. The Master Servicer shall also cause each Subservicer
to maintain a policy of insurance covering errors and omissions and a fidelity
bond which would meet the requirements set forth above.
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Section 3.14. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) The Master Servicer will, to the extent it has knowledge
of any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not be required to take such action if
in its sole business judgment the Master Servicer believes it is not in the best
interests of the Trust Estate and shall not exercise any such rights if
prohibited by law from doing so. If the Master Servicer reasonably believes it
is unable under applicable law to enforce such "due-on-sale" clause, or if any
of the other conditions set forth in the proviso to the preceding sentence
apply, the Master Servicer will enter into an assumption and modification
agreement from or with the person to whom such property has been conveyed or is
proposed to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, to the extent permitted by applicable state law, the
Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note;
provided, that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer and has a credit risk
rating at least equal to that of the original Mortgagor. In connection with any
assumption or substitution, the Master Servicer shall apply such underwriting
standards and follow such practices and procedures as shall be normal and usual
in its general mortgage servicing activities and as it applies to other mortgage
loans owned solely by it. The Master Servicer shall not take or enter into any
assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy. Any fee collected by the Master Servicer in respect of an assumption,
modification or substitution of liability agreement shall be retained by the
Master Servicer as additional servicing compensation. In connection with any
such assumption, no material term of the Mortgage Note (including, but not
limited to, the related Mortgage Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms
thereof. The Master Servicer shall notify the Trustee and the Trust
Administrator that any such substitution, modification or assumption agreement
has been completed by forwarding to the Trust Administrator (with a copy to the
Trustee) the executed original copy of such substitution, modification or
assumption agreement, which shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the same
extent as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.14,
the term
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"assumption" is deemed to also include a sale of the Mortgaged Property subject
to the Mortgage that is not accompanied by an assumption or substitution of
liability agreement.
Section 3.15. Realization upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use its best efforts, consistent
with Accepted Servicing Procedures, to foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07 hereof. The
Master Servicer shall be responsible for all costs and expenses incurred by it
in any such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11. The foregoing is subject to the provision that, in any case in
which Mortgaged Property shall have suffered damage from an Uninsured Cause, the
Master Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that
such restoration will increase the proceeds of liquidation of the related
Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.15 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Administrator, the Trust Estate or the
Certificateholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by a Person
who regularly conducts environmental audits using customary industry standards,
that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it
would be in the best economic interest of the Trust
Estate to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management or
disposal of any hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based
materials for which investigation, testing,
monitoring, containment, clean-up or remediation
could be required under any federal, state or local
law or regulation, or that if any such materials are
present for which such action
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could be required, that it would be in the best
economic interest of the Trust Estate to take such
actions with respect to the affected Mortgaged
Property.
The cost of the environmental audit report contemplated by
this Section 3.15 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11, such right of reimbursement being prior to the rights
of Certificateholders to receive any amount in the Collection Account to the
extent provided in Section 3.11.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Estate to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Estate; provided that any amounts disbursed by
the Master Servicer pursuant to this Section 3.15(b) shall constitute Servicing
Advances, (to the extent such amounts do not constitute Nonrecoverable Servicing
Advances). The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Master Servicer, subject to the Master Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.11, such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account to the extent
provided in Section 3.11.
(c) The Master Servicer may at its option purchase from the
Trust Estate any Mortgage Loan that is 90 days or more delinquent, subject to
the limitations set forth in the last sentence hereof, which the Master Servicer
determines in good faith will otherwise become subject to foreclosure
proceedings (evidence of such determination to be delivered in writing to the
Trustee and the Trust Administrator prior to purchase), at a price equal to the
Purchase Price; provided, however, that if the Master Servicer purchases any
such Mortgage Loans on the basis of delinquency, the Master Servicer must
purchase the most delinquent Mortgage Loans first. The Purchase Price for any
Mortgage Loan purchased hereunder shall be deposited in the Collection Account,
and the Trust Administrator, upon receipt of written certification from the
Master Servicer of such deposit, shall release or cause to be released to the
Master Servicer the related Mortgage File and the Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as the Master Servicer shall furnish and as shall be necessary to vest
in the Master Servicer title to any Mortgage Loan released pursuant hereto. The
total amount of Mortgage Loans that may be purchased by the Master Servicer
pursuant to this Section 3.15(c) (not including Mortgage Loans repurchased due
to a breach of a representation or warranty) may not exceed 5% of the Cut-off
Date Pool Balance, unless the Certificate Insurer otherwise agrees in writing.
Upon ultimate disposition of any such Mortgage Loans, the Master Servicer shall
provide to the Certificate Insurer a report of such disposition, which report
shall contain the information that would have been included in the Liquidation
Report had the Mortgage Loan remained in the Trust Estate.
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(d) The Master Servicer may also, with the consent of the
Certificate Insurer, sell to a third party any Mortgage Loan that is 90 days or
more delinquent which the Master Servicer determines in good faith will
otherwise become subject to foreclosure proceedings (evidence of such
determination to be delivered in writing to the Trustee and the Trust
Administrator prior to purchase). Each such Mortgage Loan shall be sold at a
market price as determined by the Master Servicer.
Section 3.16. Trustee and Trust Administrator to Cooperate; Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan or the receipt
by the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer will immediately
notify or cause to be notified the Trustee, the Trust Administrator and the
Certificate Insurer by a certification in the form of Exhibit E-2 (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. Upon receipt of such certification and request, the Trust
Administrator shall promptly release the related Mortgage File to the Master
Servicer. No expenses incurred in connection with any instrument of satisfaction
or deed of reconveyance shall be chargeable to any Account or shall be otherwise
chargeable to the Trust, the Trustee, the Trust Administrator , the
Certificateholders or the Certificate Insurer.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, the Trust Administrator shall, upon request of
the Master Servicer and delivery to the Trust Administrator of a Request for
Release in the form of Exhibit E-1, release the related Mortgage File to the
Master Servicer, and the Trustee shall, at the direction of the Master Servicer,
execute such documents as shall be necessary to the prosecution of any such
proceedings. Such Request for Release shall obligate the Master Servicer to
return each and every document previously requested from the Mortgage File to
the Trust Administrator when the need therefor by the Master Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds or Insurance Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Trustee and the
Trust Administrator a certificate of a Servicing Officer certifying as to the
name and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with
such liquidation which are required to be deposited into the Collection Account
have been so deposited, a copy of the Request for Release shall be released by
the Trust Administrator to the Master Servicer.
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Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer any court pleadings, requests
for trustee's sale or other documents necessary to the foreclosure or trustee's
sale in respect of a Mortgaged Property or to any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17. Servicing Compensation.
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to retain the Servicing Fee
with respect to each Mortgage Loan, payable solely from payments of interest on
the related Mortgage Loan, in respect of such Mortgage Loan. The right to
receive the Servicing Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Master Servicer's responsibilities
and obligations under this Agreement, as applicable, although any portion
thereof may be paid to a Subservicer as provided in the related Subservicing
Agreement.
Additional servicing compensation in the form of Net Recovery
Proceeds in excess of the Loan Balance of the related Mortgage Loan plus any
accrued and unpaid interest thereon that was not advanced as part of a
Delinquency Advance (if permitted by applicable law), penalty interest,
assumption fees, modification fees, insufficient-funds charges, late payment
charges or otherwise shall be retained by the Master Servicer only to the extent
such fees or charges are received by the Master Servicer (such amounts,
"Additional Servicing Compensation"). The Master Servicer shall also be entitled
pursuant to Sections 3.11(a)(ii) and 4.04(a)(ii) hereof to interest or other
investment income earned from the investment of funds on deposit in the
Collection Account and the Certificate Account, respectively, as additional
servicing compensation. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including, without limitation, (x) payment of premiums for the insurance
required by Section 3.13 hereof, to the extent such premiums are not paid by the
related Mortgagors or by a Subservicer and (y) servicing compensation of each
Subservicer) and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section 3.18. Reports to the Trust Administrator and the Trustee;
Collection Account Statements.
(a) Not later than twenty days after each Distribution Date,
the Master Servicer shall forward to the Trustee, the Trust Administrator, the
Certificate Insurer and the Depositor the most current available bank statement
for the Collection Account. Copies of such statement shall be provided by the
Trust Administrator to any Certificateholder and to any Person identified to the
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Trustee as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Trust Administrator.
(b) If funds in the Collection Account during a Due Period
have been invested in investments other than bank deposits of the depository
institution maintaining the Collection Account or money market funds (as
described in the definition of Permitted Investments), then, on or before the
related Distribution Date, the Master Servicer shall forward to the Trustee, the
Trust Administrator, the Certificate Insurer and the Depositor a statement
setting forth the activity in the Collection Account during the preceding
calendar month.
Section 3.19. Statement as to Compliance and Financial Statements.
The Master Servicer will deliver to the Trustee, the Trust
Administrator, the Depositor and the Certificate Insurer not later than 90 days
following the end of each fiscal year (beginning with the 1999 fiscal year) of
the Master Servicer, an Officers' Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Master Servicer during the
preceding year and of performance under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
Contemporaneously with the submission of the Officers'
Certificate required by the preceding paragraph, the Master Servicer shall
deliver to the Trustee, the Trust Administrator and the Certificate Insurer a
copy of its annual audited financial statements prepared in the ordinary course
of business. The Master Servicer shall, upon the request of the Depositor,
deliver to such party any unaudited quarterly financial statements of the Master
Servicer.
The Master Servicer shall forward to the Certificate Insurer a
copy of any audited annual financial statements, as well as any unaudited
quarterly financial statements, of any Sub- Servicer received by the Master
Servicer, both at the Master Servicer's expense.
Copies of any such Officers' Certificate and financial
statements shall be provided by the Trust Administrator to the Certificate
Insurer, any Certificateholder and to any Person identified to the Trust
Administrator as a prospective transferee of a Certificate, upon request at the
expense of the requesting party, provided such statement is delivered by the
Master Servicer to the Trust Administrator.
Section 3.20. Independent Public Accountants' Servicing Report.
Not later than 90 days following the end of each fiscal year
(beginning with the 1999 fiscal year) of the Master Servicer, the Master
Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report
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stating that (i) it has obtained a letter of representation regarding certain
matters from the management of the Master Servicer which includes an assertion
that the Master Servicer has complied with certain minimum residential mortgage
loan servicing standards, identified in the Uniform Single Attestation Program
for Mortgage Bankers established by the Mortgage Bankers Association of America,
with respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination conducted
by such firm in accordance with standards established by the American Institute
of Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report, such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Subservicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Subservicers. Immediately upon receipt of such report, the Master Servicer shall
furnish a copy of such report to the Certificate Insurer, the Trustee, the Trust
Administrator, the Depositor and each Rating Agency. Copies of such statement
shall be provided by the Trust Administrator to any Certificateholder upon
request at the Master Servicer's expense, provided that such statement is
delivered by the Master Servicer to the Trust Administrator.
Section 3.21. Access to Certain Documentation.
The Master Servicer shall provide to the OTS, the FDIC and any
other federal or state banking or insurance regulatory authority that may
exercise authority over any Certificateholder or the Certificate Insurer, access
to the documentation regarding the Mortgage Loans required by applicable state
and federal laws and regulations. The Master Servicer shall similarly provide to
the Trustee, the Trust Administrator, the Depositor and the Certificate Insurer
such access to the documentation regarding the Mortgage Loans as such Persons
may reasonably require. Such access shall in each case be afforded without
charge, but only upon reasonable request and during normal business hours at the
offices of the Master Servicer or of a Subservicer, as applicable, designated by
it.
Section 3.22. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trust on behalf of the Certificateholders. The
Master Servicer, on behalf of the Trust, shall sell any REO Property within
three years after the Trust acquires ownership of such REO Property for purposes
of Section 860G(a)(8) of the Code, unless the Master Servicer has delivered to
the Trust Administrator, the Trustee, the Depositor and the Certificate Insurer
an Independent Opinion of Counsel, addressed to the Trust Administrator, the
Trustee, the Depositor, the Master Servicer and the Certificate Insurer, to the
effect that holding such REO Property for more than three years after its
acquisition will not result in the imposition of taxes on "prohibited
transactions" of the Trust as defined in Section 860F of the Code or cause the
Trust to fail to qualify as a REMIC under federal law at any time that any
Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders and the
Certificate Insurer solely
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for the purpose of its prompt disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code or result in the receipt by the
Subsidiary REMIC of any "income from non-permitted assets" within the meaning of
Section 860F(a)(2)(B) of the Code or any "net income from foreclosure property"
which is subject to taxation under the REMIC Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain, or cause to be established and maintained, with respect to REO
Properties an account held in trust for the Trustee for the benefit of the
Certificateholders and the Certificate Insurer (the "REO Account"), which shall
be an Eligible Account. The Master Servicer shall be permitted to allow the
Collection Account to serve as the REO Account, subject to separate ledgers for
each REO Property. The Master Servicer shall be entitled to retain or withdraw
any interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders and the Certificate Insurer. In connection therewith, the
Master Servicer shall deposit, or cause to be deposited in the clearing account
in which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in
no event more than one Business Day after the Master Servicer's receipt thereof,
and shall thereafter deposit in the REO Account, in no event more than two
Business Days after the Master Servicer's receipt thereof, all revenues received
by it with respect to an REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of such REO
Property including, without limitation:
(i) all insurance premiums due and payable in respect
of such REO Property;
(ii) all real estate taxes and assessments in respect
of such REO Property that may result in the imposition of a
lien thereon; and
(iii) all costs and expenses necessary to maintain such
REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.
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Notwithstanding the foregoing, the Master Servicer shall not:
(i) permit the Trust to enter into, renew or extend
any new lease with respect to any REO Property, if the New Lease by its terms
will give rise to any income that does not constitute Rents from Real Property;
(ii) permit any amount to be received or accrued
under any New Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize or permit any construction on any REO
Property, other than the completion of a building or other improvement thereon,
and then only if more than ten percent of the construction of such building or
other improvement was completed before default on the related Mortgage Loan
became imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or
(iv) allow any Person to Directly Operate any REO
Property on any date more than 90 days after its date of acquisition by the
Trust;
unless, in any such case, the Master Servicer has obtained an Independent
Opinion of Counsel, addressed to itself, the Trustee, the Trust Administrator
and the Certificate Insurer, to the effect that such action will not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code at any time that it is held by the Trust, in
which case the Master Servicer may take such actions as are specified in such
Opinion of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract
shall not be inconsistent herewith;
(ii) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay all costs and
expenses incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net of
such costs and expenses) to the Master Servicer as soon as practicable, but in
no event later than thirty days following the receipt thereof by such
Independent Contractor;
(iii) none of the provisions of this Section 3.22(c)
relating to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of its duties
and obligations to the Trustee on behalf of the Certificateholders with respect
to the operation and management of any such REO Property; and
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(iv) the Master Servicer shall be obligated with
respect thereto to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Master Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation is sufficient to pay such fees; provided,
however, that to the extent that any payments made by such Independent
Contractor would constitute Servicing Advances if made by the Master Servicer,
such amounts shall be reimbursable as Servicing Advances made by the Master
Servicer.
(d) In addition to the withdrawals permitted under Section
3.22(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Subservicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Subservicer for unreimbursed Servicing Advances and Delinquency
Advances made in respect of such REO Property or the related Mortgage Loan. On
the Master Servicer Remittance Date, the Master Servicer shall withdraw from
each REO Account maintained by it and deposit into the Collection Account, for
distribution on the related Distribution Date in accordance with Section 4.04,
the income from the related REO Property received during the prior calendar
month, net of any withdrawals made pursuant to Section 3.22(c) or this Section
3.22(d).
(e) Subject to the time constraints set forth in Section
3.22(a), each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer shall deem
necessary or advisable, as shall be normal and usual in its Accepted Servicing
Procedures.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Subservicer as provided above, shall be deposited in the Collection Account in
no event more than two Business Days after the Master Servicer's receipt thereof
for distribution on the related Distribution Date in accordance with Section
4.04. Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in
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form and substance sufficient to meet the reporting requirements imposed by such
Sections 6050H, 6050J and 6050P of the Code.
Section 3.23. Prepayment Interest Shortfalls.
The Master Servicer shall deposit into the Collection Account
on or before 12:00 noon, New York time, on each Master Servicer Remittance Date
an amount equal to the lesser of (i) the aggregate of the Prepayment Interest
Shortfalls resulting from Principal Prepayments during the related Prepayment
Period and (ii) its aggregate Servicing Fee received with respect to the related
Due Period.
Section 3.24. First Liens.
Subject to the remainder of this Section 3.24, if the Master
Servicer is notified that any holder of a First Lien has accelerated or intends
to accelerate the obligations secured by the First Lien, or has declared or
intends to declare a default under the mortgage or the promissory note secured
thereby, or has filed or intends to file an election to have the Mortgaged
Property sold or foreclosed, the Master Servicer shall take, on behalf of the
Trust, whatever actions are necessary to protect the interests of the
Certificateholders, and/or to preserve the security of the related Mortgage
Loan, subject to the application of the REMIC Provisions. The Master Servicer
shall advance the necessary funds to cure the default or reinstate the First
Lien, if such advance would have the effect of increasing the Net Recovery
Proceeds.
No advance shall be required to be made under this Section
3.24 if such advance would, if made, constitute a Nonrecoverable Servicing
Advance.
Section 3.25. Indemnification.
(a) The Master Servicer shall indemnify the Trust, the
Depositor, the Trustee, the Trust Administrator and the Certificate Insurer
(each an "Indemnified Party") and hold harmless each of them against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable 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 any of the Master Servicer's representations and warranties
and covenants contained in this Agreement or in any way relating to the failure
of the Master Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement; provided, however, that if the
Master Servicer is not liable pursuant to the provisions of Section 6.03 hereof
for its failure to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement, then the provisions of this Section
3.25 shall have no force and effect with respect to such failure.
(b) The Depositor, the Trustee, the Trust Administrator or the
Certificate Insurer, as the case may be, shall promptly notify the Master
Servicer if a claim is made by a third party with respect to a breach of any of
the Master Servicer's representations and warranties and covenants
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contained in this Agreement or in any way relating to the failure of the Master
Servicer to perform its duties and service the Mortgage Loans in compliance with
the terms of this Agreement. The Master Servicer shall promptly notify the
Trustee, the Depositor, the Trust Administrator and the Certificate Insurer of
any claim of which it has been notified pursuant to this Section 3.25 by another
Person and, in any event, shall promptly notify the Depositor and the
Certificate Insurer of its intended course of action with respect to any claim.
If the Certificate Insurer so directs the Master Servicer in writing within ten
Business Days of such notice to the Certificate Insurer, the Master Servicer
shall refrain from defending, and in any case if the Certificate Insurer so
directs in writing at any time the Master Servicer shall cease defending (but
only if the Master Servicer is not judicially or legally prohibited from doing
so), such claim or shall settle such claim on terms acceptable to the
Certificate Insurer; provided, however, that the Master Servicer need not comply
with the Certificate Insurer's directions unless it is indemnified to its
reasonable satisfaction by the Certificate Insurer against any liability that
the Master Servicer may incur as a consequence of such compliance.
(c) The Master Servicer shall be entitled to participate in
and, upon notice to the Indemnified Party, assume the defense of any such action
or claim in reasonable cooperation with, and with the reasonable cooperation of,
the Indemnified Party. The Indemnified Party will have the right to employ its
own counsel in any such action in addition to the counsel of the Master
Servicer, but the fees and expenses of such counsel will be at the expense of
such Indemnified Party, unless (a) the employment of counsel by the Indemnified
Party at its expense has been authorized in writing by the Master Servicer, (b)
the Master Servicer has not in fact employed counsel to assume the defense of
such action within a reasonable time after receiving notice of the commencement
of the action, or (c) the named parties to any such action or proceeding
(including any impleaded parties) include both the Master Servicer and one or
more Indemnified Parties, and the Indemnified Parties shall have been advised by
counsel that there may be one or more legal defenses available to them which are
different from or additional to those available to the Master Servicer. The
Master Servicer shall not be liable for any settlement of any such claim or
action unless the Master Servicer shall have consented thereto in writing or be
in default on its obligations hereunder. Any failure by an Indemnified Party to
comply with the provisions of this Section 3.25 shall relieve the Master
Servicer of liability only if such failure is materially prejudicial to the
position of the Master Servicer and then only to the extent of such prejudice.
Section 3.26. Certain Procedures Relating to Successor Subservicers and
Successor Master Servicers.
(a) In the event that any Subservicer is to be terminated, the
Certificate Insurer and the Master Servicer shall consult among themselves with
respect to the appointment of a successor Sub-Servicer (it being acknowledged
that the Master Servicer is obligated to service the Mortgage Loan directly
pursuant to Section 3.03 hereof if no successor Subservicer is appointed
pursuant to this Section 3.26(a)). In the event that such parties cannot, with
reasonable promptness (but in no event later than 30 days), agree on the
identity of the successor Sub-Servicer (or whether the Master Servicer shall be
required to service directly the Mortgage Loans) the decision of the Certificate
Insurer shall control.
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(b) In connection with any change in the Master Servicer's
servicing software, the Master Servicer shall promptly deliver to the Trustee,
the Trust Administrator and the Certificate Insurer an Officers' Certificate
detailing the substance of such change and the Master Servicer shall cooperate
fully with the Trustee and the Trust Administrator in any manner that the
Trustee or the Trust Administrator reasonably deems necessary with respect to
such change, to the extent such change affects the ability of the Trustee or the
Trust Administrator to perform its obligations hereunder.
Section 3.27. Reports to the Securities and Exchange Commission.
The Trust Administrator shall, on behalf of the Trust, cause
to be filed with the Securities and Exchange Commission any periodic reports
required to be filed under the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and Exchange
Commission thereunder. Upon the request of the Trust Administrator, each of the
Master Servicer, the Depositor, the Trustee and the Certificate Insurer shall
cooperate with the Trust Administrator in the preparation of any such report and
shall provide to the Trust Administrator in a timely manner all such information
or documentation as the Trust Administrator may reasonably request in connection
with the performance of its duties and obligations under this Section.
Section 3.28. Servicing Termination.
The Master Servicer hereby covenants and agrees to act as the
Master Servicer under this Agreement for an initial term, commencing on the
Closing Date and ending on December 31, 1999, which term shall be extendable by
the Certificate Insurer for successive terms of three calendar months
thereafter, until the termination of the Trust Estate pursuant to Article X.
Each such notice of extension ("a Master Servicer Extension Notice") shall be
delivered by the Certificate Insurer to the Trustee, the Trust Administrator and
the Master Servicer. The Master Servicer hereby agrees that, upon its receipt of
any such Master Servicer Extension Notice, the Master Servicer shall become
bound for the duration of the term covered by such Master Servicer Extension
Notice to continue as the Master Servicer subject to and in accordance with the
other provisions of this Agreement. The Trust Administrator agrees that if as of
the fifteenth (15th) day prior to the last day of any term of the Master
Servicer the Trust Administrator shall not have received any Master Servicer
Extension Notice from the Certificate Insurer, the Trust Administrator will
within five (5) days thereafter, give written notice of such non-receipt to the
Certificate Insurer and the Master Servicer. The failure of the Certificate
Insurer to deliver a Master Servicer Extension Notice by the end of a calendar
term shall result in the termination of the Master Servicer. If the term of the
Master Servicer shall expire without the Certificate Insurer having delivered to
the Master Servicer a Master Servicer Extension Notice, but the Master Servicer
shall continue without objection from the Trustee, the Trust Administrator or
the Certificate Insurer to perform the functions of servicer hereunder (and in
the absence of ground for termination under the Insurance Agreement), the Master
Servicer shall be entitled to receive a prorated portion of the Servicing Fee
specified hereunder for the time during which it shall so act; provided, that it
is understood and agreed that the foregoing
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provision for payment of the prorated Servicing Fee is intended solely to avoid
unjust enrichment of the Trust Estate and does not contemplated or give rise to
any implicit renewal of the Master Servicer's term. The foregoing provisions of
this paragraph shall not apply to the Trustee or Trust Administrator in the
event the Trustee or Trust Administrator succeeds to the rights and obligations
of the Master Servicer and the Trustee or Trust Administrator shall continue in
such capacity until the earlier of the termination of this Agreement pursuant to
Article X or the appointment of a successor servicer.
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ARTICLE IV
FLOW OF FUNDS
Section 4.01. Establishment of Accounts.
The Trust Administrator, on behalf of the Trust and as agent
for the Trustee, shall establish on the Closing Date, and thereafter maintain,
the Certificate Account and the Policy Payments Account, each of which shall
conform to the definition of Eligible Account and shall be held by the Trust
Administrator for the benefit of the Certificateholders and the Certificate
Insurer, as their interests may appear.
Section 4.02. The Certificate Insurance Policy.
(a) Not later than 3:00 p.m., New York time, on the third
Business Day immediately preceding each Distribution Date, the Trust
Administrator shall determine the Available Funds for such Distribution Date.
To the extent any Available Funds Shortfall will exist
for any Distribution Date after giving effect to the distributions specified in
Section 4.04(b) hereof (calculating such distributions without giving effect to
any Insured Payment to be made on such Distribution Date), the Trust
Administrator shall complete a notice in the form attached to the Policy (the
"Notice") and shall submit such Notice to the Certificate Insurer no later than
10:00 a.m., New York time, on the second Business Day preceding such
Distribution Date. Such Notice may be delivered by electronic facsimile (in
which case the original shall be sent by overnight courier). The Notice shall
constitute a claim for an Insured Payment pursuant to the Policy for an amount
equal to the Available Funds Shortfall. Upon receipt of Insured Payments on
behalf of the Certificateholders, the Trust Administrator shall deposit such
Insured Payments in the Policy Payments Account, and shall thereafter transfer
such Insured Payments to the Certificate Account for distribution solely to the
related Certificateholders in accordance with Section 4.04(b).
(b) The Trust Administrator, on behalf of the Trust and as
agent for the Trustee, shall establish a separate special purpose trust account
for the benefit of the Holders of the Offered Certificates and the Certificate
Insurer (the "Policy Payments Account") over which the Trust Administrator shall
have exclusive control and sole right of withdrawal. The Trust Administrator
shall deposit any amount paid under the Policy into the Policy Payments Account
and distribute such amount only for purposes of payment to the Holders of
Offered Certificates of the Insured Payment for which a claim was made and such
amount may not be applied to satisfy any costs, expenses or liabilities of the
Master Servicer, the Trustee, the Trust Administrator or the Trust. Amounts paid
under the Policy shall be transferred to the Certificate Account in accordance
with the next succeeding paragraph and thereafter disbursed by the Trust
Administrator to the Holders of the Offered Certificates in accordance with
Section 4.04(b). It shall not be necessary for such payments to be made by
checks or wire transfers separate from the checks or wire transfers used to pay
any
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other amounts distributed pursuant to Section 4.04(b). However, the amount of
any payment of principal of or interest on the Offered Certificates to be paid
from funds transferred from the Policy Payments Account shall be noted in the
statement to be furnished to related Holders of the Offered Certificates
pursuant to Section 4.05. Funds held in the Policy Payments Account shall not be
invested by the Trust Administrator.
On any Distribution Date with respect to which a claim
has been made under the Policy, the amount of any funds received by the Trust
Administrator as a result of such claim, to the extent required to pay amounts
owed to Certificateholders on such Distribution Date, shall be withdrawn from
the Policy Payments Account and deposited in the Certificate Account and applied
by the Trust Administrator, together with the other funds to be deposited in the
Certificate Account, directly to the amounts owed to Certificateholders on the
related Certificates. Funds received by the Trust Administrator as a result of
any claim under the Policy shall be deposited by the Trust Administrator in the
Policy Payments Account and then transferred to the Certificate Account and used
solely for payment to the related Holders of the related Certificates and may
not be applied to satisfy any costs, expenses or liabilities of the Master
Servicer, the Trustee, the Trust Administrator or the Trust. Any funds remaining
in the Policy Payments Account on the first Business Day following a
Distribution Date shall be remitted to the Certificate Insurer, pursuant to the
instructions of the Certificate Insurer, by the end of such Business Day.
(c) The Trust Administrator shall keep a complete and accurate
record of the amount of interest and principal paid in respect of any
Certificate from moneys received under the Policy. The Certificate Insurer shall
have the right to inspect such records at reasonable times during normal
business hours upon one Business Day's prior notice to the Trustee.
(d) The Trust Administrator shall receive, as attorney-in-fact
of each Holder of a Class A Certificate, any Insured Payment from the
Certificate Insurer and disburse the same to each Holder of a Class A
Certificate in accordance with the provisions of this Article IV. Insured
Payments disbursed by the Trust Administrator from proceeds of the Policy shall
not be considered payment by the Trust nor shall such payments discharge the
obligation of the Trust with respect to such Offered Certificates, and the
Certificate Insurer shall be subrogated to the rights of the Certificateholders
to the extent of the payment and shall be entitled to receive the Reimbursement
Amount pursuant to Section 4.04(b)(I)(v) or (II)(v). By acceptance of a
Certificate, each Holder of a Certificate agrees and recognizes that to the
extent the Certificate Insurer makes Insured Payments, either directly or
indirectly (as by paying through the Trustee), to the Class A
Certificateholders, the Certificate Insurer will be entitled to receive the
Reimbursement Amount pursuant to Section 4.04(b)(I)(v) and (II)(v).
(e) If the Trust Administrator receives a certified copy of an
order of the appropriate court (an "Order") that any prior distribution made on
the Offered Certificates of principal or current interest has been voided in
whole or in part as a Preference Payment under applicable bankruptcy,
insolvency, receivership or similar law, the Trust Administrator shall so notify
the Certificate Insurer, shall comply with the provisions of the Policy to
obtain payment by
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the Certificate Insurer of such voided distribution and shall, at the time it
provides notice to the Certificate Insurer, notify each Holder of the affected
Certificates by mail (i) that, subject to the terms of the Policy, the
Certificate Insurer will disburse the voided distribution directly to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order following such Certificateholder's making timely delivery to the Trust
Administrator of (a) a certificate of such Certificateholder that such Order has
been entered and is not subject to any stay and (b) an assignment duly executed
and delivered by such Certificateholder, in such form as is reasonably required
by the Certificate Insurer and provided to such Certificateholder by the
Certificate Insurer, irrevocably assigning to the Certificate Insurer all rights
and claims of such Certificateholder relating to or arising under the affected
Certificates against the debtor that made such Preference Payment, or otherwise
with respect to such preference payment, and (ii) that, if any such voided
distribution payment is recovered from such Certificateholder pursuant to such
Order, such Certificateholder will be entitled to payment pursuant to the
Policy. A copy of the Policy shall be made available to each affected
Certificateholder through the Trust Administrator, and the Trust Administrator
shall furnish to the Certificate Insurer or its fiscal agent, if any, its
records evidencing the payments that have been made by the Trust Administrator
and subsequently recovered from Certificateholders and the dates on which such
payments were made.
(f) The Trust Administrator shall promptly notify the
Certificate Insurer of any proceeding or the institution of any action, of which
a Responsible Officer of the Trust Administrator has actual knowledge, seeking
the avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership or similar law (a "Preference Claim") of any
distribution made with respect to the Offered Certificates. Each Holder of a
Class A Certificate, by its purchase of such Certificate, the Master Servicer,
the Trust Administrator and the Trustee agree that the Certificate Insurer (so
long as no Certificate Insurer Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to such Preference Claim and (ii)
the posting of any surety, supersede as or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Certificate
Insurer shall be subrogated to, and each Holder, the Master Servicer, the Trust
Administrator and the Trustee hereby delegate and assign to the Certificate
Insurer, to the fullest extent permitted by law, the rights of the Master
Servicer, the Trustee, the Trust Administrator and each Holder in the conduct of
any such Preference Claim, including, without limitation, all rights of any
party to any adversary proceeding or action with respect to any court order
issued in connection with any such Preference Claim.
(g) It is understood and agreed that the intention of the
parties is that the Certificate Insurer shall not be entitled to reimbursement
on any Distribution Date for amounts previously paid by it unless on such
Distribution Date the Class A Certificateholders shall also have received the
full amount of the Insured Distribution Amount for such Distribution Date.
Section 4.03. Deposits into, and Transfers Among, the Accounts.
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(a) The Trust Administrator shall deposit into the Certificate
Account, upon receipt, the amount referred to in Section 3.11(i) and the
Termination Price received by the Trust Administrator in connection with a
termination of the Trust pursuant to Article X hereof.
(b) Prior to 1:00 p.m. New York time on any Distribution Date,
the Trust Administrator shall make all transfers required in order to make the
payments required pursuant to Section 4.04 hereof.
Section 4.04. Flow of Funds and Distributions.
(a) No later than 1:00 p.m., New York time, on each
Distribution Date (or as described below), the Trust Administrator shall apply
the amounts on deposit in the Certificate Account in the following order of
priority:
(i) to pay to the Trust Administrator the Administrative
Fee;
(ii) to pay the Master Servicer any interest or
investment income earned on funds deposited in the Certificate Account (net of
investment losses); and
(iii) the Trust Administrator shall allocate all
remaining amounts then on deposit in the Certificate Account (the "Available
Funds") in the order and priority set forth in Section 4.04(b) below.
(b) I. On each Distribution Date, the Trust Administrators
shall withdraw (a) from the Certificate Account, the Group I Available Funds and
(b) from the Policy Payments Account, the amount of any Insured Payment
allocable to the Group I Certificates and shall distribute the same in the
following order of priority:
(i) to the Certificate Insurer, the Premium Amount for
the Group I Certificates for such Distribution Date (to the extent such payment
will not cause an Insured Payment to be required);
(ii) to the holders of each Class of Group I
Certificates, the Interest Distribution Amount for such Class for such
Distribution Date (allocated among such Classes on a pro rata basis based on the
Interest Distribution Amount for each such Class for such Distribution Date);
(iii) to the holders of the Classes of Group I
Certificates, an amount equal to the Group I Basic Principal Distribution
Amount, in the order of priority specified below;
(iv) to the holders of the Group II Certificates, an
amount equal to the excess, if any, of (x) the related Interest Distribution
Amount for such Distribution Date over (y) the
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amount actually distributed to the holders of such Class on such Distribution
Date pursuant to Section 4.04(b)(II)(ii) below;
(v) to the Certificate Insurer, first, the Reimbursement
Amount for the Group I Certificates for such Distribution Date (to the extent
such payment will not cause an Insured Payment to be required), and second, the
Reimbursement Amount for the Group II Certificates for such Distribution Date
(to the extent not paid under Section 4.04(b)(II)(v) from the Group II Available
Funds and to the extent such payment will not cause an Insured Payment to be
required);
(vi) to holders of the Classes of Group I Certificates,
in the order of priority described below, an amount equal to the Group I Extra
Principal Distribution Amount; and
(vii) to the holders of the Group II Certificates, an
amount equal to the sum of (A) the excess, if any, of (x) the Group II Principal
Distribution Amount for such Distribution Date over (y) the amount actually
distributed to the holders of the Group II Certificates on such Distribution
Date pursuant to Section 4.04(b)(II)(iii) and (II)(vi) from the Group II
Available Funds and (B) any OC Deficiency Amount for such Distribution Date for
the Group II Certificates, to the extent remaining unpaid after taking into
account the distribution made pursuant to Section 4.04(b)(I)(vii)(A).
II. On each Distribution Date, the Trust Administrator shall
withdraw from the Certificate Account all Group II Available Funds and from the
Policy Payments Account, the amount of any Insured Payment allocable to the
Group II Certificates and shall distribute the same in the following order of
priority:
(i) to the Certificate Insurer, the Premium Amount for
the Group II Certificates for such Distribution Date (to the extent such payment
will not cause an Insured Payment to be required);
(ii) to the holders of the Group II Certificates, the
related Interest Distribution Amount for such Distribution Date;
(iii) to the holders of the Group II Certificates, an
amount equal to the Group II Basic Principal Distribution Amount;
(iv) to the holders of each Class of Group I
Certificates, an amount equal to the excess, if any, of (x) the Interest
Distribution Amount for such Class for such Distribution Date over (y) the
amount actually distributed to the holders of such Class on such Distribution
Date pursuant to Section 4.04(b)(I)(ii) above (allocated among such Classes on a
pro rata basis based on the Interest Distribution Amount for each such Class for
such Distribution Date);
(v) to the Certificate Insurer, first, the Reimbursement
Amount for the Group II Certificates for such Distribution Date (to the extent
such payment will not cause an Insured
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Payment to be required), and second, the Reimbursement Amount for the Group I
Certificates for such Distribution Date (to the extent not paid under Section
4.04(b)(I)(v) from the Group I Available Funds and to the extent such payment
will not cause an Insured Payment to be required);
(vi) to the holders of the Group II Certificates, an
amount equal to the Group II Extra Principal Distribution Amount; and
(vii) to the holders of the Classes of Group I
Certificates, in the order of priority described below, an amount equal to the
sum of (A) the excess, if any, of (x) the Group I Principal Distribution Amount
for such Distribution Date over (y) the amount actually distributed to the
holders of the Group I Certificates on such Distribution Date pursuant to
Section 4.04(b)(I)(iii) and (I)(vi) from the Group I Available Funds and (B) any
OC Deficiency Amount for such Distribution Date for the Group I Certificates, to
the extent remaining unpaid after taking into account the distribution made
pursuant to Section 4.04(b)(II)(vii)(A).
On each Distribution Date, any remaining amounts after giving
effect to the distributions specified in clauses I and II above will be paid to
the holders of the Class R Certificates.
Except as otherwise specified below, all distributions of
principal to holders of the Classes of Group I Certificates on any Distribution
Date shall be made in the following priority:
first, to the Class A-6 Certificates, in payment of the
Class A-6 Priority Distribution Amount for such Distribution
Date, until the Class A-6 Priority Distribution Amount for
such Distribution Date has been paid in full;
second, to the Class A-1 Certificates, until their Class
Certificate Principal Balance is reduced to zero;
third, to the Class A-2 Certificates, until their Class
Certificate Principal Balance is reduced to zero;
fourth, to the Class A-3 Certificates, until their Class
Certificate Principal Balance is reduced to zero;
fifth, to the Class A-4 Certificates, until their Class
Certificate Principal Balance is reduced to zero;
sixth, to the Class A-5 Certificates, until their Class
Certificate Principal Balance is reduced to zero; and
seventh, to the Class A-6 Certificates, until their Class
Certificate Principal Balance is reduced to zero.
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Notwithstanding the foregoing, in the event an OC Deficit
exists on any Distribution Date and the aggregate amount distributable as
principal (including any draws made under the Certificate Insurance Policy) on
the Offered Certificates is not sufficient to reduce such OC Deficit to zero,
then all amounts that are distributable as principal of the Group I Certificates
on such Distribution Date will be allocated concurrently to the outstanding
Classes of Group I Certificates, pro rata, on the basis on their respective
Class Certificate Principal Balances.
If on a Distribution Date one Certificate Group has an
Overcollateralized Amount less than zero and the other Certificate Group does
not, after giving effect to all payments on that Distribution Date other than
any Insured Payment, then any principal portion of any Insured Payment for that
Distribution Date will be included in the Available Funds of the Certificate
Group having the Overcollateralized Amount less than zero. If on a Distribution
Date both Certificate Groups have an Overcollateralized Amount less than zero,
after giving effect to all payments on that Distribution Date other than any
Insured Payment, then any principal portion of any Insured Payment for that
Distribution Date will be included in the Available Funds of each Certificate
Group to the extent of and in proportion to the amount necessary to eliminate
that Certificate Group's negative Overcollateralized Amount.
(c) Whenever in the administration of the Trust the Trust
Administrator comes into possession of money or other property not otherwise
required to be paid to the Holders of the Regular Certificates, the Certificate
Insurer, the Master Servicer or any other Person, or not required to be
otherwise applied at any time pursuant to the provisions of this Agreement, the
Trust Administrator shall promptly distribute such money or other property to
the Class R Certificateholders.
(d) Payments to the Certificateholders of each Class on each
Distribution Date will be made to the Certificateholders of the respective Class
of record on the related Record Date (other than as provided in Section 4.04(g)
or Section 10.01 hereof respecting the final distribution on such Class), and
shall be made to each such Certificateholder (x) by wire transfer of immediately
available funds to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, if such Certificateholder is the
registered owner of a Class R Certificate or the registered owner of a Class of
Regular Certificates evidencing a Percentage Interest aggregating at least 10%
hereof, and shall have so notified the Trust Administrator in writing in the
case of the first Distribution Date, by the Closing Date, and, in the case of
all subsequent Distribution Dates, at least five Business Days prior to the
Record Date immediately prior to such Distribution Date; or (y) otherwise by
check mailed by first class mail to the address of such Certificateholder
appearing in the Certificate Register. Payments to the Certificate Insurer on
any Distribution Date will be made by wire transfer of immediately available
funds to the account designated by the Certificate Insurer (initially, in the
Premium Letter).
(e) The rights of the Certificateholders to receive
distributions from the proceeds of the Trust in respect of the Certificates, and
all interests of the Certificateholders in and to such distributions, shall be
as set forth in this Agreement. In no event shall the Holders of any Class of
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Certificates, the Trustee, the Trust Administrator, the Depositor, the Master
Servicer or the Certificate Insurer in any way be responsible or liable to the
Holders of any other Class of Certificates in respect of amounts properly
previously distributed on the Certificates.
(f) Except as otherwise provided in Section 10.01 hereof,
whenever the Trust Administrator expects that the final distribution with
respect to any Class of Certificates will be made on the next Distribution Date,
the Trust Administrator shall, no later than four days prior to the related
Distribution Date, send, by overnight delivery or by registered mail, to each
Holder on such date of such Class of Certificates and to the Certificate Insurer
a notice to the effect that:
(i) the Trust Administrator expects that the final
distribution with respect to such Class of Certificates will be made on such
Distribution Date and requests that such Holder send its Certificates to the
Trust Administrator immediately following such final Distribution Date,
(ii) no interest shall accrue on such Certificates from
and after the end of the related Due Period, and upon the Trust Administrator's
making of such final distribution with respect to such Class of Certificates,
such Certificates will be absolutely null and void and of no further effect
thereafter, and
(iii) such final distribution will only be made upon
presentment of the Certificates to the Trust Administrator at its Corporate
Trust Office or at such other address set forth in such notice.
(g) Within one Business Day of the Trust Administrator's
receipt of any payment disbursed to it by the Certificate Insurer in respect of
any Preference Amount recovered from the Class A Certificateholders, the Trust
Administrator shall distribute such payment to such Certificateholders. If any
such distribution is to be made on a Distribution Date, it shall be so made
before giving effect to any distribution to be made on such date pursuant to
Section 4.04(b). The Trust Administrator shall distribute to the respective
Class A Certificateholder any payment disbursed to it by the Certificate Insurer
in respect of any previous distribution to a Class A Certificateholder that was
avoided as a preference pursuant to a final, non-appealable order of a court of
competent jurisdiction under applicable bankruptcy, insolvency, receivership or
similar law, and that such Certificateholder has repaid to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy, as the case may be.
(h) With respect to each Account, the Master Servicer shall
deliver to the Trust Administrator without any right of reimbursement therefor
for deposit into such Account the amount of any losses incurred in connection
with the investment of funds in such Account within one Business Day after
receipt from the Trust Administrator of notice of any such losses. The Trust
Administrator shall not be responsible for and shall be indemnified by the
Master Servicer against any expenses or liability incurred with respect to such
investment losses.
Section 4.05. Statements to Certificateholders.
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On each Distribution Date the Trust Administrator shall
forward by mail to each Holder of a Regular Certificate and the Certificate
Insurer a statement, parts of which shall be based upon Master Servicer
Information and upon which the Trust Administrator shall conclusively rely,
without independent verification, as to the distributions made on such
Distribution Date, setting forth the following information:
(a) the amount of the distributions, separately identified,
with respect to the Regular Certificates;
(b) the amount of such distributions allocable to principal,
separately identifying the aggregate amount of any Principal Prepayments and
monthly scheduled payments of principal or other recoveries of principal
included therein;
(c) the amount of such distributions allocable to interest and
the calculation thereof;
(d) the Aggregate Loan Balance as of the end of the related
Due Period;
(e) the Class Certificate Principal Balance of each Class of
Regular Certificates after giving effect to any payment of principal on such
Distribution Date;
(f) the amount of any Insured Payment included in the amounts
distributed to the Holders of Offered Certificates on such Distribution Date;
(g) the Insured Distribution Amount for such Distribution
Date, separately identifying the portions thereof allocable to principal and
interest;
(h) the principal amount of each Class A Certificate (based on
a Certificate in the original principal amount of $1,000) which will be
outstanding and the Class Certificate Principal Balance of each Class of Regular
Certificates, in each case after giving effect to any payment of principal on
such Distribution Date;
(i) the amount of any OC Release Amount;
(j) the amount of any Available Funds Shortfall;
(k) the Net WAC Cap;
(l) the amount, if any, of Realized Losses for the previous
calendar month;
(m) the related Overcollateralized Amount after giving effect
to all distributions on such Distribution Date;
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(n) the total of any Substitution Shortfall Amounts or
Purchase Price amounts paid or received by the Master Servicer with respect to
the preceding month;
(o) the weighted average Mortgage Rate of the Mortgage Loans
as of the last day of the related Due Period;
(p) the current weighted average of the remaining terms of the
Mortgage Loans;
(q) the amount of Servicing Fee paid to or retained by the
Master Servicer;
(r) the amount of Administrative Fee paid to the Trustee and
the Trust Administrator;
(s) the amount of any Delinquency Advances and Servicing
Advances for the related Due Period, the aggregate amount of Delinquency
Advances outstanding after giving effect to such Delinquency Advances and the
aggregate amount of Nonrecoverable Delinquency Advances with respect to such
Distribution Date;
(t) the number of Mortgage Loans outstanding;
(u) the cumulative number and Loan Balances of liquidated
Mortgage Loans;
(v) the amount of cumulative Realized Losses and its
percentage of the Cut-off Date Pool Balance;
(w) the Cut-off Date Loan Balance of each Mortgage Loan which
was modified or extended pursuant to Section 2.11 or 3.07 hereof;
(x) the aggregate amount of payments in respect of Prepayment
Interest Shortfalls deposited in the Collection Account by the Master Servicer
on the related Master Servicer Remittance Date pursuant to Section 3.23 hereof;
(y) the Remittance Report (as defined in Section 4.06 hereof);
(z) the Interest Distribution Amount and the Principal
Distribution Amount for such Distribution Date;
(aa) the Reimbursement Amount, if any and the amount, if any,
allocable to principal, the amount allocable to interest and the amount
allocable to other amounts due under the Insurance Agreement;
(bb) whether the Stepdown Requirement has been satisfied and
whether the Master Servicer Termination Test has been violated;
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(cc) the Pass-Through Rate for the Class A-1 Certificates for
such Distribution Date; and
(dd) the amount distributed to the Class R Certificateholders.
Items (a), (b), (c) and (e) above shall also be presented on the basis
of a certificate having a $1,000 denomination.
In addition, on each Distribution Date the Trust Administrator shall
distribute to each Holder, together with the information described above, the
following information based solely upon Master Servicer Information provided to
the Trust Administrator pursuant to Section 4.06 hereof upon which the Trust
Administrator may conclusively rely without independent verification:
(A) the number of, and aggregate Loan Balances (including the
percent of the aggregate Loan Balances of such Mortgage Loans
to the aggregate Loan Balances of all Mortgage Loans) of,
Mortgage Loans (i) 30-59 days Delinquent, (ii) 60-89 days
Delinquent and (iii) 90 days or more Delinquent (which
statistics shall include Mortgage Loans in foreclosure and
bankruptcy but which shall exclude REO Properties), as of the
close of business on the last day of the calendar month next
preceding such Distribution Date and the aggregate Loan
Balances of all Mortgage Loans as of such date;
(B) the number of, and aggregate Loan Balances of, all
Mortgage Loans in foreclosure proceedings (other than any
Mortgage Loans described in clause (C) below) and the percent
of the aggregate Loan Balances of such Mortgage Loans to the
aggregate Loan Balances of all Mortgage Loans, all as of the
close of business on the last day of the calendar month next
preceding such Distribution Date;
(C) the number of, and the Aggregate Loan Balance of, the
Mortgage Loans in bankruptcy proceedings and the percent of
the Aggregate Loan Balance of such Mortgage Loans to the
Aggregate Loan Balance of all Mortgage Loans, all as of the
close of business on the last day of the calendar month next
preceding such Distribution Date;
(D) the number of REO Properties, the Aggregate Loan Balance
of the related Mortgage Loans, and the percent of the
Aggregate Loan Balance of such Mortgage Loans to the Aggregate
Loan Balance of all Mortgage Loans, all as of the close of
business on the last day of the calendar month next preceding
such Distribution Date;
(E) for each Mortgage Loan which is an REO Property, the Loan
Balance of such Mortgage Loan, the loan number of such
Mortgage Loan, the Value of the Mortgaged Property, the value
established by any new appraisal, the estimated cost of
disposing
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of the Mortgage Loan and the amount of any unreimbursed
Delinquency Advances and Servicing Advances;
(F) for each Mortgage Loan which is in foreclosure, the Loan
Balance of such Mortgage Loan, the Value of the Mortgaged
Property, the Loan-to-Value Ratio and the loan-to-value ratio
on the original Value as of the close of business on the last
day of the calendar month next preceding such Distribution
Date and the last paid-to- date, based; and
(G) the principal balance of each Mortgage Loan that was
modified or extended pursuant to Section 2.10 or 3.01 hereof.
Within a reasonable period of time (which shall not be more
than 45 days) after the end of each calendar year, the Trust Administrator shall
furnish to each Person who at any time during the calendar year was a Holder of
a Regular Certificate a statement containing the information set forth in
subclauses (a) through (c) above, aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Trust Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trust Administrator pursuant to any requirements of the Code as
are from time to time in force.
On each Distribution Date the Trust Administrator shall
forward to the Certificate Insurer, the Depositor, the Trustee, each Holder of a
Class R Certificate, the Master Servicer and Bloomberg (at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxxxx, (212) 940- 1843) a copy of the
reports forwarded to the Regular Certificateholders on such Distribution Date,
and a report of the amounts, if any, actually distributed with respect to the
Class R Certificates on such Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trust Administrator shall furnish to any Person who at any
time during the calendar year was a Holder of a Class R Certificate a statement
containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder.
The Trust Administrator shall, upon written request, forward
to any Certificateholder within five Business Days after the furnishing or
receipt thereof by the Trustee, as the case may be, copies of any (i)
directions, notices, certificates, opinions or reports furnished hereunder by
the Trust Administrator to the Certificate Insurer, the Master Servicer, the
Trustee, the Depositor or the Rating Agencies, (ii) directions, notices,
certificates, reports, opinions or any other information or document furnished
to the Trust Administrator by the Certificate Insurer, the Trustee, the Master
Servicer, the Depositor or the Rating Agencies and (iii) anything requested in
writing by any Certificateholder which the Trust Administrator otherwise sends
to some other Person pursuant to this Agreement (excluding, however, routine
items sent to Mortgagors, taxing or local property records authorities
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and similar items) which, in the case of clause (iii), such Certificateholder is
not otherwise receiving; provided, however, that any such documents or
information requested under clause (iii) shall be at the expense of the
requesting Certificateholder; and provided, further, that the Trust
Administrator shall not be required to provide any document or information which
it is otherwise legally prohibited from providing.
The Trustee hereby agrees to disclose the Premium Amount to any Person
upon request.
Section 4.06. Remittance Reports; Delinquency Advances by the Master
Servicer and Insurance Claims.
(a) On the Business Day following each Determination Date, the
Master Servicer shall deliver to the Trustee, the Trust Administrator and the
Certificate Insurer by telecopy (or by such other means as the Master Servicer,
the Trust Administrator and the Trustee (or the Certificate Insurer) may agree
from time to time) a servicing report (the "Remittance Report") with respect to
the related Distribution Date. In addition, the Master Servicer shall deliver to
Bloomberg, by electronic medium, a copy of the Remittance Report. On the same
date, the Master Servicer shall forward to the Trustee, the Trust Administrator
and the Certificate Insurer by overnight mail a computer readable magnetic tape
containing the information set forth in such report with respect to the related
Distribution Date. Such report will include (i) the amount of Delinquency
Advances to be made by the Master Servicer in respect of the related
Distribution Date, the aggregate amount of Delinquency Advances outstanding
after giving effect to such Delinquency Advances, and the aggregate amount of
Nonrecoverable Delinquency Advances in respect of such Distribution Date and
(ii) such other information with respect to the Mortgage Loans as the Trust
Administrator may reasonably require to perform the calculations necessary to
make the distributions contemplated by Section 4.04 and to prepare the
statements to Certificateholders contemplated by Section 4.05. The Trust
Administrator shall not be responsible to recompute, recalculate or verify any
information provided to it by the Master Servicer.
(b) On or before 12:00 noon, New York time, on the Master
Servicer Remittance Date, the Master Servicer shall deposit into the Collection
Account, for inclusion in the Available Funds for the next Distribution Date, in
immediately available funds, the amount equal to the aggregate of all payments
of principal and interest, net of the Servicing Fee, that were due during the
related Due Period on the Mortgage Loans and that were delinquent on the related
Determination Date, (any such deposit made by the Master Servicer, a
"Delinquency Advance"). The Master Servicer is permitted to fund its payment of
Delinquency Advances from amounts then on deposit in the Collection Account
representing collections on the Mortgage Loans relating to the then-current or
any subsequent Due Period but any such amounts shall be replaced by the Master
Servicer on or prior to the next Master Servicer Remittance Date. The Master
Servicer shall be required to make Delinquency Advances from its own funds
(subject to reimbursement from subsequent collections on the related Mortgage
Loans, when available) to the extent that such amounts in the Collection Account
are insufficient.
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(c) The obligation of the Master Servicer to make Delinquency
Advances (other than Nonrecoverable Delinquency Advances) is mandatory with
respect to any Mortgage Loan or REO Property, and shall continue until a Final
Recovery Determination or an REO Disposition in connection therewith or the
purchase or repurchase thereof from the Trust pursuant to any applicable
provision of this Agreement.
(d) Notwithstanding anything herein to the contrary, no
Delinquency Advance or Servicing Advance shall be required to be made hereunder
by the Master Servicer if such Delinquency Advance or Servicing Advance would,
if made, constitute a Nonrecoverable Delinquency Advance or Nonrecoverable
Servicing Advance, respectively.
Section 4.07. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Trust Administrator shall comply with all federal withholding requirements
respecting payments to Certificateholders of interest or original issue discount
that the Trust Administrator reasonably believes are applicable under the Code.
The consent of Certificateholders shall not be required for such withholding. In
the event the Trust Administrator does withhold any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Trust Administrator shall
indicate to such Certificateholders the amount withheld. Any amounts so withheld
shall be deemed to have been distributed to the related Certificateholders for
all purposes of this Agreement.
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ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates consist of the Regular Certificates and the
Class R Certificates. The Certificates in the aggregate will represent the
entire beneficial ownership interest in the Mortgage Loans and all other assets
included in the Trust Estate.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A and B. The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6 and Class A-7 Certificates shall be issued upon original
issuance as Book-Entry Certificates. The Class R Certificates shall be issued at
all times as Definitive Certificates. The Offered Certificates are issuable only
in denominations of $50,000 and integral multiples of $1.00 in excess thereof.
The Class R Certificates are issuable only in denominations representing
Percentage Interests of at least 10%.
Upon original issue, the Certificates shall be executed by the
Trustee, or by the Trust Administrator on behalf of the Trustee, and
authenticated and delivered by the Trustee or by the Trust Administrator, upon
the Written Order to Authenticate and upon receipt of the documents specified in
Section 2.04 hereof. The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee or the Trust Administrator by an authorized
signatory. Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Trustee or the Trust
Administrator shall bind the Trustee or the Trust Administrator, as applicable,
notwithstanding that such individuals or any of them shall have ceased to hold
such offices prior to the authentication and delivery of such Certificates or
did not hold such offices at the date of such Certificates. 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 herein executed by the Trustee or the Trust
Administrator by manual signature, and such certificate of authentication 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.
Interest shall accrue on the Regular Certificates (other than
the Class A-1 Certificates) on the basis of a 360-day year consisting of twelve
30-day months, except as otherwise provided herein. Interest shall accrue on the
Class A-1 Certificates on the actual number of days in each Accrual Period and a
360-day year, except as otherwise provided herein.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trust Administrator shall cause to be kept at the
office or agency appointed by the Trust Administrator in accordance with the
provisions of Section 8.12 hereof a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, the Trust Administrator
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shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Depositor, each
Certificateholder, the Trustee and the Certificate Insurer shall have the right
to inspect the Certificate Register or to obtain a copy thereof at all
reasonable times, and to rely conclusively upon a certificate of the Trust
Administrator as to the information set forth in the Certificate Register. The
Trust Administrator shall furnish or cause to be furnished to the Depositor, the
Trustee and the Certificate Insurer and to any Certificateholder a listing of
the names and addresses of the Certificateholders on reasonable request.
(b) (i) The Class R Certificates have not been registered or
qualified under the 1933 Act or any state securities laws or "blue sky" laws. No
transfer, sale, pledge or other disposition of any Class R Certificate shall be
made unless such disposition is made pursuant to an effective registration
statement under the 1933 Act and effective registration or qualification under
applicable state securities laws or "blue sky" laws, or is made in a transaction
which does not require such registration or qualification. In the event that a
transfer is to be made in reliance upon an exemption from the 1933 Act, the
Trust Administrator shall require receipt of: (i) if such transfer is
purportedly being made in reliance upon Rule 144A under the 1933 Act, written
certifications from the Certificateholder desiring to effect the transfer and
from such Certificateholder's prospective transferee, substantially in the forms
attached hereto as Exhibit H-1; and (ii) in all other cases, an Opinion of
Counsel satisfactory to it that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an expense
of the Trust or of the Depositor, the Trust Administrator, the Trustee, the
Master Servicer in its capacity as such or any Sub-Servicer), together with
copies of the written certification(s) of the Certificateholder desiring to
effect the transfer and/or such Certificateholder's prospective transferee upon
which such Opinion of Counsel is based, if any. None of the Depositor, the
Master Servicer, the Trust Administrator or the Trustee is obligated under this
Agreement to register the Class R Certificates under the 1933 Act or any other
securities law or to take any action not otherwise required under this Agreement
to permit the transfer of Class R Certificates without such registration or
qualification. Any Class R Certificateholder desiring to effect such transfer
shall, and does hereby agree to, promptly indemnify and reimburse the Trustee,
the Depositor, the Trust Administrator and the Master Servicer for costs and
expenses incurred in connection with any liability that results if the transfer
is not so exempt or is not made in accordance with such applicable federal and
state laws.
(ii) No transfer of a Class R Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101 ("Plan Assets") unless the Depositor, the Trust Administrator, the
Trustee and the Master Servicer are provided with an Opinion of Counsel which
establishes to the satisfaction of the Depositor, the Trust Administrator, the
Trustee and the Master Servicer that the purchase of such Certificates is
permissible under applicable law, will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Depositor, the Master Servicer, the Trust Administrator, the Trustee
or the Trust to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this
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Agreement, which Opinion of Counsel shall not be an expense of the Depositor,
the Master Servicer, the Trust Administrator, the Trustee or the Trust. In lieu
of such Opinion of Counsel, any prospective transferee of such Certificates may
provide a certification in the form of Exhibit H-2 to this Agreement (or other
form acceptable to the Depositor, the Trust Administrator, the Trustee and the
Master Servicer), which the Trust Administrator may rely upon without further
inquiry or investigation. Neither an Opinion of Counsel nor any certification
will be required in connection with the initial transfer of any such Certificate
by the Depositor (in which case, the Depositor or the Depositor's transferee
shall have deemed to have represented that it is not a Plan or a Person
investing Plan Assets).
(c) (i) Each Person who has or who acquires any Ownership
Interest in a Class R Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions and to have irrevocably authorized the Trust Administrator
or its designee under clause (iii)(A) below to deliver payments to a Person
other than such Person and to negotiate the terms of any mandatory sale under
clause (iii)(B) below and to execute all instruments of transfer and to do all
other things necessary in connection with any such sale. The rights of each
Person acquiring any Ownership Interest in a Class R Certificate are expressly
subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Trust
Administrator of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed transfer of any
Ownership Interest in a Class R Certificate, the Trust
Administrator shall require delivery to it, and shall not
register the transfer of any Class R Certificate until
its receipt of, an affidavit and agreement (a "Transfer
Affidavit and Agreement," in the form attached hereto as
Exhibit I) from the proposed transferee representing and
warranting, among other things, that such transferee is a
Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the
subject of the proposed transfer as a nominee, trustee or
agent for any Person that is not a Permitted Transferee,
that for so long as it retains its Ownership Interest in
a Class R Certificate, it will endeavor to remain a
Permitted Transferee, and that it has reviewed the
provisions of this Section 5.02(c) and agrees to be bound
by them.
(C) Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed transferee under
clause (B) above, if a Responsible Officer of the Trust
Administrator who is assigned to this transaction has
actual knowledge that the proposed transferee is not a
Permitted Transferee, no transfer of an Ownership
Interest in a Class R Certificate to such proposed
transferee shall be effected.
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(D) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall agree (x) to
require a transferor affidavit (a "Transferor Affidavit,"
in the form attached hereto as Exhibit I) from any other
Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not
to transfer its Ownership Interest unless it provides a
Transferor Affidavit (in the form attached hereto as
Exhibit I) to the Trust Administrator stating that, among
other things, it has no actual knowledge that such other
Person is not a Permitted Transferee.
(E) Each Person holding or acquiring an Ownership
Interest in a Class R Certificate, by purchasing an
Ownership Interest in such Certificate, agrees to give
the Trust Administrator written notice that it is a
"pass-through interest holder" within the meaning of
temporary Treasury regulation Section 1.67-
3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Class R Certificate, if it is, or is
holding an Ownership Interest in a Class R Certificate on
behalf of, a "pass-through interest holder."
(ii) The Trust Administrator will register the transfer of
any Class R Certificate only if it shall have received the
Transfer Affidavit and Agreement and all of such other
documents as shall have been reasonably required by the Trust
Administrator as a condition to such registration.
(iii) (A) If any purported transferee shall become a Holder
of a Class R Certificate in violation of the provisions of
this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law,
to all rights as holder thereof retroactive to the date of
registration of such transfer of such Class R Certificate. The
Trust Administrator shall be under no liability to any Person
for any registration of transfer of a Class R Certificate that
is in fact not permitted by this Section 5.02(c) or for making
any payments due on such Certificate to the holder thereof or
for taking any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported transferee shall become a holder
of a Class R Certificate in violation of the restrictions in
this Section 5.02(c) and to the extent that the retroactive
restoration of the rights of the holder of such Class R
Certificate as described in clause (iii)(A) above shall be
invalid, illegal or unenforceable, then the Trust
Administrator shall have the right, without notice to the
holder or any prior holder of such Class R Certificate, to
sell such Class R Certificate to a purchaser selected by the
Trust Administrator on such terms as the Trust Administrator
may choose. Such purported transferee shall promptly endorse
and deliver each Class R Certificate in accordance with the
instructions of the Trust Administrator. Such purchaser may be
the Trust Administrator itself or any Affiliate of the Trust
Administrator. The proceeds of such sale, net of the
commissions (which may
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include commissions payable to the Trust Administrator or its
Affiliates), expenses and taxes due, if any, will be remitted
by the Trust Administrator to such purported transferee. The
terms and conditions of any sale under this clause (iii)(B)
shall be determined in the sole discretion of the Trust
Administrator, and the Trust Administrator shall not be liable
to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(iv) The Trust Administrator shall make available to the
Internal Revenue Service and those Persons specified by the
REMIC Provisions all information necessary to compute any tax
imposed (A) as a result of the transfer of an Ownership
Interest in a Class R Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and 1.860E-
2(a)(5) with respect to the "excess inclusions" of such Class
R Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a
Class R Certificate having as among its record holders at any
time any Person which is a Disqualified Organization.
Reasonable compensation for providing such information may be
accepted by the Trust Administrator.
(v) The provisions of this Section 5.02(c) set forth prior
to this subsection (v) may be modified, added to or
eliminated, provided that there shall have been delivered to
the Trust Administrator at the expense of the party seeking to
modify, add to or eliminate any such provision the following:
(A) written notification from each Rating Agency to
the effect that the modification, addition to or
elimination of such provisions will not cause such Rating
Agency to downgrade its then-current ratings of any Class
of Certificates; and
(B) an Opinion of Counsel, in form and substance
satisfactory to the Trust Administrator, to the effect
that such modification of, addition to or elimination of
such provisions will not cause the Trust to cease to
qualify as a REMIC and will not cause the Trust to be
subject to an entity-level tax caused by the transfer of
any Class R Certificate to a Person that is not a
Permitted Transferee or a Person other than the
prospective transferee to be subject to a REMIC tax
caused by the transfer of a Class R Certificate to a
Person that is not a Permitted Transferee.
(d) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate (duly endorsed, or accompanied by an
executed assignment, as specified in the Certificate) at any agency or office
appointed by the Trust Administrator for such purpose pursuant to Section 8.12
hereof, the Trustee, or the Trust Administrator on behalf of the Trustee, shall
execute
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and the Trustee or the Trust Administrator shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of the same Class of a like aggregate Percentage Interest.
(e) At the option of the Certificateholders, each Certificate
may be exchanged for other Certificates of the same Class with authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any office or agency appointed by the Trust
Administrator for such purpose pursuant to Section 8.12 hereof. Whenever any
Certificates are so surrendered for exchange the Trustee, or the Trust
Administrator on behalf of the Trustee, shall execute and the Trustee or the
Trust Administrator shall authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trust Administrator) be duly endorsed by, or be accompanied by an assignment in
the form attached to the Certificate or by a written instrument of transfer in a
form reasonably satisfactory to the Trust Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing.
(f) No service charge to the Certificateholders shall be made
for any transfer or exchange of Certificates, but the Trust Administrator may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
(g) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Trust Administrator in accordance with
its customary procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trust
Administrator or the Trust Administrator receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate, and (ii) there is
delivered to each of the Trustee, the Trust Administrator and the Certificate
Insurer such security or indemnity (provided that an unsecured letter of
indemnity in a form reasonably satisfactory to the Trustee and the Trust
Administrator from a Holder which is an insurance company having long-term
unsecured debt which is rated at least investment grade (or having a comparable
claim-paying ability rating) and having a minimum net worth of $100,000,000
shall satisfy such requirement) as may be required by them to save each of them
harmless, then, in the absence of actual knowledge by a Responsible Officer of
the Trustee or the Trust Administrator that such Certificate has been acquired
by a bona fide purchaser, the Trustee, or the Trust Administrator on behalf of
the Trustee, shall execute and the Trustee or the Trust Administrator shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of the same Class and
of like denomination and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trust Administrator 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 Trust Administrator and the Trustee) connected therewith. Any
replacement Certificate issued pursuant to this Section shall constitute
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complete and indefeasible evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 5.04. Persons Deemed Certificateholders.
The Depositor, the Master Servicer, the Trust Administrator,
the Trustee and the Certificate Insurer and any agent of any of them may treat
the Person in whose name any Certificate is registered in the Certificate
Register as the Certificateholder for the purpose of receiving distributions
pursuant to Section 4.04 hereof and for all other purposes whatsoever, and none
of the Depositor, the Master Servicer, the Trust Administrator, the Trustee, the
Certificate Insurer or any agent of any of them shall be affected by notice to
the contrary.
Section 5.05. Book-Entry Certificates.
At such time, if any, as any Class of Regular Certificates
shall be registered on the Certificate Register in the name of the Depository or
its nominee, such Class shall be issued in the form of one or more typewritten
Certificates representing Book-Entry Certificates to be delivered to the
Depository by or on behalf of the Depositor and held by the Book-Entry Custodian
or, if appointed to hold such Certificates as provided below, the Depository.
Any Certificate Owner owning a beneficial interest in the Book-Entry
Certificates shall only be entitled to receive definitive, fully registered
Certificates ("Definitive Certificates") representing such Certificate Owner's
interest in such Certificates pursuant to Section 5.07 hereof. Following the
issuance of Book-Entry Certificates with respect to any Regular Certificates and
until such time, if any, as Definitive Certificates shall have been issued to
the Certificate Owners of such Certificates:
(a) the provisions of this Section 5.05 shall be in full force
and effect;
(b) the Depositor, the Master Servicer, the Trust
Administrator, the Trustee and the Certificate Insurer may deal with the
Depository and the Depository Participants for all purposes (including the
making of distributions) as the authorized representative of the respective
Certificate Owners of such Certificates;
(c) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, with respect to any Book-
Entry Certificates, the Depository will make book-entry transfers among the
Depository Participants and receive and transmit distributions of principal and
interest on such Certificates to such Depository Participants;
(d) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
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(e) the Trustee and the Trust Administrator may rely, and
shall be fully protected in relying, upon information furnished by the
Depository with respect to its Depository Participants; and
(f) to the extent that the provisions of this Section 5.05
conflict with any other provisions of this Agreement, the provisions of this
Section 5.05 shall control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Certificates evidencing a specified percentage of the Voting Rights, such
consent or direction may be given by a combination of Certificate Owners (acting
through the Depository and the Depository Participants) owning Book-Entry
Certificates, and Certificateholders owning Definitive Certificates, evidencing
in the aggregate such specified percentage of the Voting Rights.
The Trust Administrator is hereby initially appointed as the Book-Entry
Custodian and hereby agrees to act as such in accordance herewith and in
accordance with the agreement that it has with the Depository authorizing it to
act as such. The Book-Entry Custodian may, and, if it is no longer qualified to
act as such, the Book-Entry Custodian shall, appoint, by a written instrument
delivered to the Depositor, the Master Servicer, the Trustee and, if the Trust
Administrator is not the Book-Entry Custodian, the Trust Administrator, any
other transfer agent (including the Depository or any successor Depository) to
act as Book-Entry Custodian under such conditions as the predecessor Book-Entry
Custodian and the Depository or any successor Depository may prescribe, provided
that the predecessor Book-Entry Custodian shall not be relieved of any of its
duties or responsibilities by reason of any such appointment of other than the
Depository. If the Trust Administrator resigns or is removed in accordance with
the terms hereof, the Trustee, the successor trust administrator or, if it so
elects, the Depository shall immediately succeed to its predecessor's duties as
Book-Entry Custodian. The Depositor shall have the right to inspect, and to
obtain copies of, any Certificates held as Book-Entry Certificates by the
Book-Entry Custodian.
Section 5.06. Notices to Depository.
Whenever any notice or other communication is required to be
given to Holders of any Class of Certificates represented in whole or in part by
Book-Entry Certificates, the Trust Administrator shall, with respect to such
Book-Entry Certificates, give all such notices and communications to the
Depository rather than to the related Certificate Owners.
Section 5.07. Definitive Certificates.
After any issuance of Regular Certificates as Book-Entry
Certificates, if (a) the Depositor advises the Trustee or the Trust
Administrator that the Depository is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Certificates and the Trustee, Trust Administrator or the Depositor is
unable to locate a qualified successor, (b) the Depositor, at its sole option,
advises the Trustee or the Trust Administrator that
106
it elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of a Master
Servicer Default, Certificate Owners of any Class of Certificates evidencing at
least 51% of the Percentage Interests represented by the Book- Entry
Certificates of such Class advise the Trustee, the Trust Administrator and the
Depository in writing through the Depository Participants that the continuation
of a book-entry system with respect to such Certificates through the Depository
(or its successor) is no longer in the best interests of the Certificate Owners
with respect to such Certificates, then the Trust Administrator shall notify all
Certificate Owners of the availability of Definitive Certificates to Certificate
Owners requesting the same.
The Depositor shall provide the Trust Administrator with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon surrender to the Trust Administrator of any
Book-Entry Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee, or the Trust
Administrator on behalf of the Trustee, shall execute and the Trustee or the
Trust Administrator shall authenticate and deliver the Definitive Certificates
that are to replace such Book-Entry Certificates. Neither the Depositor, the
Trustee nor the Trust Administrator shall be liable for any delay in delivery of
such instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trust Administrator, to the extent applicable with respect to such
Definitive Certificates, and the Trust Administrator shall recognize the Holders
of such Definitive Certificates as Certificateholders hereunder.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Liability of the Depositor and the Master Servicer.
The Depositor and the Master Servicer each shall be severally
liable in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement and undertaken herein by the Depositor and the Master
Servicer, respectively.
Section 6.02. Merger or Consolidation of the Depositor or the Master
Servicer.
Subject to the following paragraph, the Depositor shall keep
in full effect its existence, rights and franchises as a corporation under the
laws of the jurisdiction of its incorporation. The Master Servicer shall keep in
full effect its existence, rights and franchises as a corporation organized
under the laws of the State of California (or under the laws of such other
jurisdiction as may in the future issue a charter for the Master Servicer). The
Depositor and the Master Servicer each shall (and the Master Servicer shall
require each Subservicer in the related Subservicing Agreement to) obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Certificates or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
The Depositor or the Master Servicer may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets, or substantially all of its assets pertaining to the loan
origination or servicing business, respectively, to any Person, in which case
any Person resulting from any merger or consolidation to which the Depositor or
the Master Servicer shall be a party, or any Person succeeding to the business
of the Depositor or the Master Servicer, shall be the successor of the Depositor
or the Master Servicer, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person to the Master Servicer shall satisfy the
requirements of Sections 6.06 and 7.02 hereof with respect to the qualifications
of a successor Master Servicer.
Section 6.03. Limitation on Liability of the Depositor, the Master
Servicer, any Subservicer and Others.
None of the Depositor or the Master Servicer, or any of the
directors, officers, employees or agents of the Depositor or the Master
Servicer, any Subservicer or members or affiliates of the Depositor shall be
under any liability to the Trust or the Certificateholders for any action taken,
or for refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor, the Master Servicer or any such Person against
the remedies provided herein for the
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breach of any warranties, representations or covenants made herein, or against
any specific liability imposed on the Depositor or the Master Servicer herein,
or against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of duties of the
Depositor or the Master Servicer, as the case may be, or by reason of reckless
disregard of obligations and duties of the Master Servicer or the Depositor, as
the case may be, hereunder. The Depositor, the Master Servicer and any director,
officer, employee or agent of the Depositor or the Master Servicer, or any
member or affiliate of the Depositor may rely in good faith on any document of
any kind which, prima facie, is properly executed and submitted by any Person
respecting any matters arising hereunder.
The Master Servicer, each Subservicer and the Depositor and
any director, officer, employee or agent of the Master Servicer or the Depositor
and any member or affiliate of the Depositor shall be indemnified by the Trust
and held harmless against any loss, liability or expense incurred in connection
with any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except to the extent any such loss, liability
or expense is otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Except as otherwise provided
herein, neither the Depositor nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
related to its respective duties under this Agreement; provided, however, that,
except as otherwise provided herein, either the Depositor or the Master Servicer
may, with the prior consent of the Trustee, the Trust Administrator and the
Certificate Insurer, in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders and the
Certificate Insurer 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, the Depositor and the Master Servicer shall be
entitled to be reimbursed therefor out of the Collection Account.
Section 6.04. Limitation on Resignation of the Master Servicer; No
Assignment or Delegation of Duties by Master Servicer.
The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except (a) by the mutual consent of the Certificate
Insurer (except that if a Certificate Insurer Default has occurred and is
continuing, the decision of the Trustee and the Trust Administrator shall
control), the Trustee and the Trust Administrator and written confirmation from
the Rating Agencies that such resignation would not result in the withdrawal,
downgrade or qualification of their ratings of any Class of Certificates (as
they would be determined without regard to the existence of the Policy) or (b)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to clause (b) of the preceding
sentence permitting the resignation of the Master Servicer shall be evidenced by
an Independent Opinion of Counsel to such effect delivered (at the expense of
the Master Servicer) to the Trustee and the Trust Administrator.
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No resignation of the Master Servicer shall become effective until the Trustee,
the Trust Administrator or a successor servicer, appointed pursuant to the
provisions of Section 7.2 hereof and satisfying the requirements of Sections
6.06 with respect to the qualifications of a successor Master Servicer, shall
have assumed the Master Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Agreement.
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 (except as permitted by Section 3.02 hereof) 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, without the prior written consent of each of the Certificate Insurer,
the Trust Administrator and the Trustee (except that if a Certificate Insurer
Default has occurred and is continuing, the decision of the Trustee and the
Trust Administrator shall control), and, absent such written consent, any
agreement, instrument or act purporting to effect any such assignment, transfer,
delegation or appointment shall be void.
Section 6.05. Rights of the Depositor, the Certificateholders and
Others in Respect of the Master Servicer.
The Master Servicer shall (and shall require any Subservicer
in the related Subservicing Agreement to) afford the Depositor, the Trustee, the
Trust Administrator, the Certificate Insurer and any Regular Certificateholder
which has a greater than 10% Percentage Interest in the related Class and any
representative or agent of the foregoing, upon reasonable prior notice, during
normal business hours, access to all records maintained by the Master Servicer
in respect of its rights and obligations hereunder and access to officers of the
Master Servicer and each Subservicer responsible for such obligations. Upon
request and at such requesting party's expense, the Master Servicer shall
furnish to the Depositor, any Certificateholder, the Trustee, the Trust
Administrator and the Certificate Insurer, the Master Servicer's most recent
publicly available financial statements and each Subservicer's most recent
financial statements (annual or quarterly statements, as the case may be) and
such other information reasonably relating to their capacity to perform their
obligations under this Agreement as the Master Servicer or such Subservicer
possesses.
To the extent such information is not otherwise available to
the public, the Depositor, the Certificateholders, the Master Servicer (with
respect to information of any Subservicer), the Trust Administrator, the Trustee
and the Certificate Insurer shall not disseminate any information obtained
pursuant to the preceding two sentences without the written consent of the
Master Servicer or the Subservicer (only with respect to information of such
Subservicer) except as required pursuant to this Agreement or to the extent that
it is necessary to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies for reasons consistent with the
performance of their respective duties or (ii) pursuant to any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority, or as may be required in any report submitted to any
regulatory body, having jurisdiction over the Depositor, the Master Servicer,
the
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Trust Administrator, the Trustee, any Certificateholder or the Trust Estate, as
the case may be, and in any case, the Depositor, the Master Servicer (with
respect to information of any Subservicer), the Trust Administrator or the
Trustee, as the case may be, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information.
Section 6.06. Eligibility Requirements for Master Servicer.
The Master Servicer hereunder shall at all times be a
corporation or a state-chartered or national bank acceptable to the Certificate
Insurer except that if a Certificate Insurer Default has occurred and is
continuing, such entity shall be acceptable to the Trustee and the Trust
Administrator. The Master Servicer shall be organized and doing business under
the laws of the United States of America or any state thereof or the District of
Columbia and have, except in the case of the original Master Servicer, equity of
at least $10,000,000 (or such lower level as may be acceptable to the
Certificate Insurer, or, if a Certificate Insurer Default has occurred and is
continuing, to the Trustee and the Trust Administrator, and to the Rating
Agencies, as evidenced by written confirmation that such lower level would not
result in the withdrawal, downgrade or qualification of their ratings of any
Class of Certificates (as they would be determined without regard to the
existence of the Policy). In case at any time the Master Servicer shall cease to
be eligible in accordance with the provisions of this Section 6.06, the Master
Servicer shall resign immediately in the manner and with the effect specified in
Section 7.02(a) hereof.
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ARTICLE VII
DEFAULT
Section 7.01. Master Servicer Defaults; Certain Matters Affecting the
Master Servicer.
(a) "Master Servicer Default", wherever used herein, means any
one of the following events:
(i) any failure by the Master Servicer to deposit into
the Collection Account and the Certificate Account any amount (other than a
Delinquency Advance required to be made from its own funds) that it is required
to deposit under the terms of this Agreement, which failure continues unremedied
for a period of two Business Days after the date upon which such payment was
required to be remitted or paid; 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 the Master Servicer contained in the Certificates or
in this Agreement, which failure continues unremedied for a period of 30 days
after the first date on which (x) a Servicing Officer has knowledge of such
failure or (y) written notice of such failure, requiring the same to be
remedied, shall have been given to a Servicing Officer by the Majority
Certificateholders, the Depositor, the Trust Administrator or the Trustee; or
(iii) a decree or order for relief of a court or agency
or supervisory authority having jurisdiction in the premises in an involuntary
case under any present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceeding, 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 45 days; 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 or similar proceedings of or
relating to the 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
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(vi) if the Seller or an affiliate of the Seller is the
Master Servicer, any failure of the Seller to repurchase, or substitute a
Qualified Substitute Mortgage Loan for, any Mortgage Loan as required by Section
2.06 hereof; or
(vii) any failure of the Master Servicer to pay any
Delinquency Advance or any amount in respect of Prepayment Interest Shortfalls
on any Master Servicer Remittance Date required to be made from its own funds
pursuant to Section 3.23 or 4.06 hereof, respectively, which failure continues
unremedied for a period of one Business Day; or
(viii) there shall have occurred, and the Certificate
Insurer shall have notified the Master Servicer, the Trust Administrator and the
Trustee of, an event of default by the Master Servicer under the Insurance
Agreement; or
(ix) either (a) the Master Servicer fails to make any
payment due with respect to recourse debt or other obligations which such debt
or obligations have an aggregate principal balance of $750,000 or more; or (b)
the occurrence of any event or the existence of any condition, the effect of
which is to cause (or permit one or more Persons to cause) $750,000 or more of
recourse debt or other obligations of the Master Servicer to become due before
their stated maturity or before their regularly scheduled dates of payment, in
each case, so long as such failure, event or condition shall be continuing and
shall not have been waived by the Person or Persons entitled to performance; or
(x) the rendering against the Master Servicer of a final
judgment, decree or order for the payment of money in excess of $750,000 which
is uninsured, and the continuance of such judgment, decree or order unsatisfied
and in effect for any period of 60 consecutive days without a stay of execution;
or
(xi) a failure of the Master Servicer to meet the Master
Servicer Termination Test with respect to any Distribution Date; or
(xii) the merger, consolidation or other combination of
the Master Servicer with or into any other entity, unless (1) the Master
Servicer is the surviving entity of such combination or (2) the surviving entity
is a corporation or a national or state-chartered bank or a national banking
association that is (x) organized and doing business under the laws of any state
or the United States or any state thereof or the District of Columbia and (y)
acceptable to the Majority Certificateholders.
If a Master Servicer Default shall occur, then, and in each
and every such case, so long as such Master Servicer Default shall not have been
remedied, (x) the Certificate Insurer or (y) if a Certificate Insurer Default
has occurred and is continuing, the Trustee, at the direction of the Majority
Certificateholders, may by notice in writing to the Master Servicer, the
Trustee, the Trust Administrator, the Depositor, each related Certificateholder
and the Certificate Insurer, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this
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Agreement, to the extent permitted by law, and in and to the related Mortgage
Loans and the proceeds thereof.
On and after the receipt by the Master Servicer of any such
written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder of
any Certificate) or the Mortgage Loans or otherwise, shall pass to and be vested
in the Trust Administrator or other successor Master Servicer appointed pursuant
to Section 7.02 hereof and, without limitation, the Trust Administrator or such
other successor Master Servicer is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Master Servicer, 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 related Mortgage Loans and related documents,
or otherwise.
The Master Servicer agrees promptly (and in any event no later
than ten Business Days subsequent to such notice) to provide the Trust
Administrator or other successor Master Servicer with all documents and records
requested by it to enable it to assume the functions of the Master Servicer
under this Agreement and to cooperate with the Trust Administrator or other
successor Master Servicer in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day, to the Trust Administrator or other
successor Master Servicer or its designee for administration, of all cash
amounts which shall at the time be or should have been credited by the Master
Servicer to any Account, or which shall thereafter be received with respect to
the related Mortgage Loans or any related REO Property (provided, however, that
the Master Servicer shall to be entitled to receive at the time of relinquishing
its servicing obligations, a cash payment equal to all amounts accrued or owing
to it under this Agreement on or prior to the date of such termination, whether
in respect of Delinquency Advances or otherwise and shall continue to be
entitled to the benefit of Section 6.03 hereof, notwithstanding such
termination).
For purposes of this Section 7.01, the Trustee and the Trust
Administrator shall not be deemed to have knowledge of a Master Servicer Default
unless a Responsible Officer of the Trustee or the Trust Administrator has
actual knowledge thereof or unless written notice of any event which is in fact
such a Master Servicer Default is received at the notice address of the Trustee
or the Trust Administrator provided herein and such notice references the
Certificates, the Depositor, the Trust or this Agreement.
For purposes of this Section 7.01, any consent or
determination by the Certificate Insurer shall be replaced by consent or
determination of the Majority Certificateholders if a Certificate Insurer
Default has occurred and is continuing.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Master Servicer on behalf of Trustee, may
be enforced by it without the possession of any of the Certificates, or the
production thereof at the trial or other proceeding relating
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thereto, and any such suit, action or proceeding instituted by the Master
Servicer on behalf of Trustee shall be brought in its name for the benefit of
all the Holders of such Certificates, subject to the provisions of this
Agreement.
Section 7.02. Trust Administrator or Trustee to Act; Appointment of
Successor.
(a) (1) On and after the time the Master Servicer receives a
notice of termination, the Trust Administrator (and in the event the Trust
Administrator fails in its obligation, the Trustee) shall be the successor in
all respects to the Master Servicer in its capacity as Master Servicer under
this Agreement and the transactions set forth or provided for herein, and all
the responsibilities, duties and liabilities relating thereto and arising
thereafter shall be assumed by the Trust Administrator or the Trustee, as
applicable, (except for any representations or warranties of the Master Servicer
under this Agreement, the responsibilities, duties and liabilities contained in
Section 2.06(c) and the obligation to deposit amounts in respect of losses
pursuant to Section 3.10) by the terms and provisions hereof including, without
limitation, the Master Servicer's obligations to make Delinquency Advances
pursuant to Section 4.06; provided, however, that if the Trust Administrator or
the Trustee, as applicable, is prohibited by law or regulation from obligating
itself to make advances regarding delinquent mortgage loans, then the Trust
Administrator or the Trustee, as applicable, shall not be obligated to make
Delinquency Advances pursuant to Section 4.06; and provided further, that any
failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by Section 7.01 shall not be
considered a default by the Trust Administrator or the Trustee, as applicable,
as successor to the Master Servicer hereunder. As compensation therefor, the
Trust Administrator or the Trustee, as applicable, shall be entitled to the
Servicing Fee and all funds relating to the Mortgage Loans to which the Master
Servicer would have been entitled if it had continued to act hereunder.
Notwithstanding the above and subject to Section 7.02(a)(2) below, the Trust
Administrator or the Trustee, as applicable, may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans or if the Certificate
Insurer or if the Holders of Certificates entitled to at least 51% of the Voting
Rights so request in writing to the Trust Administrator or Trustee, as
applicable, promptly appoint or petition a court of competent jurisdiction to
appoint, an established mortgage loan servicing institution selected by the
Certificate Insurer and acceptable to each Rating Agency and having a net worth
of not less than $15,000,000, as the successor to the Master Servicer under this
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer under this Agreement.
(2) No appointment of a successor to the Master Servicer
under this Agreement shall be effective until the assumption by the successor of
all of the Master Servicer's responsibilities, duties and liabilities hereunder.
In connection with such appointment and assumption described herein, the Trust
Administrator or the Trustee, as applicable, 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 the Master Servicer as such hereunder. The Depositor,
the Trustee, the Trust Administrator and such successor shall take such action,
consistent with this Agreement, as shall be
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necessary to effectuate any such succession. Pending appointment of a successor
to the Master Servicer under this Agreement, the Trust Administrator or the
Trustee, as applicable, shall act in such capacity as hereinabove provided.
(b) The successor Master Servicer (other than the Trustee or
the Trust Administrator) shall be solely liable for all costs and expenses
associated with the transfer of servicing to such successor Master Servicer,
other than the costs and expenses of sending to the successor Master Servicer
any Mortgage Loan files and records held by the Master Servicer being replaced,
for which costs and expenses the Master Servicer being replaced shall have sole
responsibility.
Section 7.03. Notification to Mortgagors and Certificateholders.
(a) Upon any such termination pursuant to Section 7.02 hereof
or the appointment of a successor to the Master Servicer, the Trust
Administrator shall, at the expense of the Master Servicer, give prompt written
notice thereof to the Certificate Insurer and the related Certificateholders at
their respective addresses appearing in the Certificate Register and to the
related Mortgagors at their respective addresses appearing in the Mortgage Loan
Schedule.
(b) Within three Business Days after the occurrence of any
event which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Default, the Trust Administrator shall transmit by
mail, at the expense of the Master Servicer, to all Holders of Certificates and
the Certificate Insurer notice of any Master Servicer Default actually known to
a Responsible Officer of the Trust Administrator.
Section 7.04. Additional Remedies of Trustee upon Master Servicer
Defaults.
Upon any Master Servicer Default, the Trustee shall have the
right to the extent consistent with the rights reserved to the Certificate
Insurer hereunder, in its own name and as Trustee, 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). 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 Master Servicer Default.
Section 7.05. Waiver of Master Servicer Defaults.
The Certificate Insurer, for so long as a Certificate Insurer
Default has not occurred and is not continuing, and otherwise Majority
Certificateholders may waive any Master Servicer Default and its consequences,
except that a default in the making of any required deposit into the Collection
Account or the Certificate Account that would result in a failure by the Trust
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Administrator to make any required distribution on the Certificates may be
waived only by all of the Certificateholders. Upon any waiver of a past Master
Servicer Default, such Master Servicer Default shall cease to exist, and any
Master Servicer 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 Master Servicer Default or impair any right consequent
thereto except to the extent expressly so waived. Notice of any such waiver
shall be given by the Trust Administrator to each Rating Agency and to all
Certificateholders.
Section 7.06. Survivability of Master Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon
termination of the Master Servicer hereunder, any liabilities of the Master
Servicer which accrued prior to such termination shall survive such termination.
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ARTICLE VIII
CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR
Section 8.01. Duties of Trustee and the Trust Administrator.
Each of the Trustee and the Trust Administrator, prior to the
occurrence of a Master Servicer Default and after the curing of all Master
Servicer Defaults which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. During a
Master Servicer Default, each of the Trustee and the Trust Administrator 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. Any permissive right of the Trustee or the Trust Administrator
enumerated in this Agreement shall not be construed as a duty.
Each of the Trustee and the Trust Administrator, upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the it 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 specified in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, it shall take such action as it deems appropriate to have the
instrument corrected, and if the instrument is not corrected to its
satisfaction, it will provide notice thereof to the Certificateholders
Each of the Trustee and the Trust Administrator may, in
accordance with its duties hereunder, do all things necessary and proper as may
be required in connection with any secondary mortgage licensing laws and similar
requirements, including, but not limited, to consenting to jurisdiction, and the
appointment of agents for service of process, in jurisdictions in which the
Mortgaged Properties are located.
No provision of this Agreement shall be construed to relieve
the Trustee or the Trust Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) Prior to the occurrence of a Master Servicer Default,
and after the curing of all such Master Servicer Defaults which may have
occurred, the duties and obligations of the Trustee and the Trust Administrator
shall be determined solely by the express provisions of this Agreement, the
Trustee and the Trust Administrator shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee or the Trust Administrator and, in the absence of bad faith
on the part of the Trustee and the Trust Administrator, the Trustee and the
Trust Administrator may conclusively rely, as to the truth of the statements and
the correctness of the opinions contained therein (including, but not limited
to, Master Servicer Information), upon any
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certificates or opinions furnished to the Trustee and the Trust Administrator
that are in the forms specified in this Agreement;
(ii) Neither the Trustee nor the Trust Administrator
shall be personally liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee or the Trust
Administrator, unless it shall be proved that the Trustee or the Trust
Administrator was negligent in ascertaining the pertinent facts; and
(iii) Neither Trustee nor the Trust Administrator shall
be liable with respect to any action taken, suffered or omitted to be taken by
it in good faith in accordance with the direction of the Majority
Certificateholders issued to the Trustee or the Trust Administrator pursuant to
Section 8.13 hereof.
Section 8.02. Certain Matters Affecting the Trustee and the Trust
Administrator.
(a) Except as otherwise provided in Section 8.01 hereof:
(i) Each of the Trustee and the Trust Administrator may
request and rely upon and shall be protected in acting or refraining from acting
upon any resolution, Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document (including, but not limited
to, Master Servicer Information) reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(ii) Each of the Trustee and the Trust Administrator may
consult with counsel and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(iii) Neither the Trustee nor the Trust Administrator
shall be under any obligation to exercise any of the trusts or powers vested in
it by this Agreement or to make any investigation of matters arising hereunder
to institute, conduct or defend any litigation hereunder or in relation hereto
at the request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee or the Trust Administrator, as the case may be,
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby (provided that an unsecured letter of
indemnity in a form reasonably satisfactory to the Trustee or the Trust
Administrator, as the case may be, from a Holder which is an insurance company
having long-term unsecured debt that is rated at least investment grade (or has
a comparable claim-paying ability rating) and having a minimum net worth of
$100,000,000 shall satisfy such requirement); nothing contained herein shall,
however, relieve the Trustee or the Trust Administrator of the obligation, upon
the occurrence of a Master Servicer Default of which the Trustee or the Trust
Administrator, as the case may be, has actual knowledge (which has not been
cured or waived), to exercise such of the rights and powers vested
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in it by this Agreement, and to 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;
(iv) Neither the Trustee nor the Trust Administrator
shall be personally liable for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) Prior to the occurrence of a Master Servicer Default
hereunder and after the curing of all Master Servicer Defaults which may have
occurred, neither the Trustee nor the Trust Administrator shall be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing to
do so by the Certificate Insurer or by the Majority Certificateholders;
provided, however, that if the payment 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 or the Trust Administrator, not reasonably assured to the
Trustee or the Trust Administrator by the security afforded to it by the terms
of this Agreement, the Trustee or the Trust Administrator may require reasonable
indemnity (provided that an unsecured letter of indemnity in a form reasonably
satisfactory to the Trustee or the Trust Administrator from a Holder which is an
insurance company having long-term unsecured debt which is rated at least
investment grade (or having a comparable claim-paying ability rating) and having
a minimum net worth of $100,000,000 shall satisfy such requirement) against such
expense or liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the Master Servicer or, if
paid by the Trustee or the Trust Administrator, shall be repaid by the Master
Servicer upon demand;
(vi) The Trustee or the Trust Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys; and
(vii) Neither the Trustee nor the Trust Administrator
shall be personally liable for any loss resulting from the investment of funds
at the direction of the Master Servicer held in any Account; provided, however,
that the Trustee or the Trust Administrator, as applicable, shall be personally
liable on any investment on which the Trustee or the Trust Administrator or an
affiliate thereof, as applicable, is the obligor and has defaulted.
(b) Following the Closing Date, and except as otherwise
provided in this Agreement, neither the Trustee nor the Trust Administrator
shall knowingly accept any contribution of assets to the Trust unless it shall
have been provided with an Opinion of Counsel at the expense of the party
delivering such assets acceptable to it to the effect that the inclusion of such
assets in the Trust will not cause the Trust to fail to qualify as a REMIC at
any time that any Certificates are outstanding or subject the Trust to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
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(c) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee or the Trust Administrator, may be
enforced by it without the possession of any of the Certificates, or the
production thereof at the trial or other proceeding relating thereto, and any
such suit, action or proceeding instituted by the Trustee or the Trust
Administrator shall be brought in its name for the benefit of all the Holders of
such Certificates, subject to the provisions of this Agreement.
Section 8.03. Neither Trustee nor Trust Administrator Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the signature of the Trustee or the Trust Administrator, on behalf of the
Trustee, the authentication of the Trustee or the Trust Administrator on the
Certificates, the acknowledgments of the Trustee and the Trust Administrator
contained in Article II and the representations and warranties of the Trustee
and the Trust Administrator in Section 8.14) shall be taken as the statements of
the Depositor, and the Trustee assumes no responsibility for their correctness.
Neither the Trustee nor the Trust Administrator makes any representations or
warranties as to the validity or sufficiency of this Agreement (other than as
specifically set forth in Section 8.14) or of the Certificates (other than the
signature of the Trustee, or the Trust Administrator, and authentication of the
Trustee or the Trust Administrator on the Certificates) or of any Mortgage Loan
or related document. Neither the Trustee nor the Trust Administrator shall be
accountable for the use or application by the Depositor, the Master Servicer of
any of the Certificates or of the proceeds of such Certificates, or for the use
or application of any funds paid to the Depositor or the Master Servicer in
respect of the Mortgage Loans or for the use or application of any funds
deposited into or withdrawn from the Collection Account by the Master Servicer.
Section 8.04. Trustee and Trust Administrator May Own Certificates.
The Trustee or Trust Administrator in its individual capacity
or any other capacity may become the owner or pledgee of Certificates with the
same rights it would have if it were not Trustee or the Trust Administrator, as
applicable.
Section 8.05. Expenses of Trustee and Trust Administrator.
The Trust Administrator shall withdraw from the Certificate
Account on each Distribution Date the Administrative Fee as described in Section
4.04 hereof and shall remit to the Trustee the portion thereof to which it is
entitled. Each of the Trustee and the Trust Administrator and any director,
officer, employee or agent of the Trustee or the Trust Administrator, as
applicable, shall be indemnified by the Trust Estate and held harmless against
any loss, liability or expense (not including expenses, disbursements and
advances incurred or made by the Trustee or the Trust Administrator, as
applicable, including the compensation and the expenses and disbursements of its
agents and counsel, in the ordinary course of the Trustee's or Trust
Administrator's, as the case may be, performance in accordance with the
provisions of this Agreement) incurred by the Trustee or the
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Trust Administrator, as applicable, in connection with any claim or legal action
or any pending or threatened claim or legal action arising out of or in
connection with the acceptance or administration of its obligations and duties
under this Agreement, other than any loss, liability or expense (i) resulting
from any breach of the Master Servicer's (and in the case of the Trustee, the
Trust Administrator's or in the case of the Trust Administrator, the Trustee's)
obligations in connection with this Agreement, (ii) that constitutes a specific
liability of the Trustee or the Trust Administrator, as applicable, pursuant to
Section 3.01 or (iii) any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of reckless disregard of obligations and duties hereunder
or in the case of the Trust Administrator, as a result of a breach of the Trust
Administrator's obligations under Section 3.01 hereof. The Master Servicer
agrees to indemnify the Trustee and the Trust Administrator, from, and hold each
harmless against, any loss, liability or expense arising in respect of any
breach by the Master Servicer of its obligations in connection with this
Agreement. Such indemnity shall survive the termination or discharge of this
Agreement and the resignation or removal of the Trustee or the Trust
Administrator, as the case may be. Any payment hereunder made by the Master
Servicer to the Trustee or the Trust Administrator shall be from the Master
Servicer's own funds, without reimbursement from the Trust Estate therefor.
Section 8.06. Trustee and Trust Administrator Eligibility Requirements.
Each of the Trustee and the Trust Administrator hereunder
shall at all times be a corporation or a national or state-chartered bank or a
national banking association acceptable to the Certificate Insurer and that is
not an affiliate of the Depositor or the Master Servicer, organized and doing
business under the laws of the United States of America or any state thereof or
the District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $100,000,000 or a
member of a bank holding company whose capital and surplus is at least
$100,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation, bank or association shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of conditions so published. In case at any time any Trustee or Trust
Administrator shall cease to be eligible in accordance with the provisions of
this Section 8.06, the Trustee or the Trust Administrator, as the case may be,
shall resign immediately in the manner and with the effect specified in Section
8.07 hereof. The corporation, bank or association serving as Trustee or Trust
Administrator may have normal banking and trust relationships with the Depositor
and the Master Servicer and the respective affiliates.
Section 8.07. Resignation and Removal of the Trustee and the Trust
Administrator.
Either the Trustee or Trust Administrator may at any time
resign and be discharged from the trusts hereby created by giving written notice
thereof to the Depositor, the Master Servicer, the Certificate Insurer, to all
Certificateholders and if the Trustee is resigning, to the Trust
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Administrator, or, if the Trust Administrator is resigning, to the Trustee. Upon
receiving such notice of any such resignation or of any removal as provided in
this Section, the Certificate Insurer may select, or if the Certificate Insurer
elects not to, the Master Servicer shall select a successor Trustee or Trust
Administrator (which may be the same Person, if both are being replaced) and
shall present such party to the Certificate Insurer and upon its approval such
party shall promptly be appointed successor trustee or trust administrator by
written instrument, in duplicate, which instrument shall be delivered to the
resigning Trustee or Trust Administrator and to the successor trustee or trust
administrator, as applicable. A copy of such instrument shall be delivered to
the Certificateholders, the Certificate Insurer and the Depositor by the Master
Servicer. If no successor trustee or trust administrator shall have been so
appointed and accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee or Trust Administrator may petition
any court of competent jurisdiction for the appointment of a successor trustee
or trust administrator.
If at any time the Trustee or the Trust Administrator shall
cease to be eligible in accordance with the provisions of Section 8.06 hereof
and shall fail to resign after written request therefor, or if at any time the
Trustee or the Trust Administrator shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or the Trust
Administrator or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or the Trust Administrator or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Master Servicer shall solicit and present to the
Certificate Insurer a written instrument removing the Trustee or the Trust
Administrator, as applicable, and appointing a successor trustee or trust
administrator, as applicable and, upon its written approval, such instrument
shall be delivered to the Trustee or the Trust Administrator so removed and to
the successor trustee or trust administrator. A copy of such instrument shall be
delivered to the Certificateholders, the Certificate Insurer and the Depositor
by the Master Servicer.
The Majority Certificateholders, with the written consent of
the Certificate Insurer (which shall only be required if no Certificate Insurer
Default has occurred and is continuing), or the Certificate Insurer (if no
Certificate Insurer Default has occurred and is continuing) may at any time
remove the Trustee or the Trust Administrator and appoint a successor by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered to the Depositor, one complete set to the Trustee or the Trust
Administrator so removed and one complete set to the successor so appointed. A
copy of such instrument shall be delivered to the Certificateholders, the Master
Servicer, the Certificate Insurer and the Depositor by the Trustee or the Trust
Administrator, as applicable.
Any resignation or removal of the Trustee or the Trust
Administrator and appointment of a successor trustee or successor trust
administrator pursuant to any of the provisions of this Section 8.07 shall not
become effective until acceptance of appointment by the successor trustee or
successor trust administrator as provided in Section 8.08 hereof.
Notwithstanding anything to the contrary contained herein, so long as no
Certificate Insurer Default exists and is continuing, neither the Trustee nor
the Trust Administrator may be removed by the Certificateholders without the
prior written consent of the Certificate Insurer.
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Notwithstanding the foregoing, in the event the Trust
Administrator advises the Trustee that it is unable to continue to perform its
obligations pursuant to the terms of this Agreement prior to the appointment of
a successor, the Trustee shall be obligated to perform such obligations until a
new trust administrator is appointed. Such performance shall be without
prejudice to any claim by a party hereto or beneficiary hereof resulting from
the Trust Administrator's breach of its obligations hereunder.
Section 8.08. Successor Trustee and Trust Administrator.
Any successor trustee or successor trust administrator
appointed as provided in Section 8.07 hereof shall execute, acknowledge and
deliver to the Certificateholders, the Certificate Insurer, the Master Servicer,
the Trustee or the Trust Administrator, as applicable, and to its predecessor
trustee or predecessor trust administrator an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee or predecessor trust administrator shall become effective
and such successor trustee or predecessor trust administrator, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with the like
effect as if originally named as trustee herein. The predecessor trustee or
predecessor trust administrator, as applicable, shall deliver to the successor
trustee or predecessor trust administrator, as applicable, all Mortgage Files
and related documents and statements held by it hereunder (other than any
Mortgage Files at the time held by a custodian, which shall become the agent of
any successor trustee hereunder), and the Depositor, the Master Servicer and the
predecessor trustee or the predecessor trust administrator, as applicable, shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
No successor trustee or successor trust administrator shall
accept appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor trustee or successor trust administrator shall be
eligible under the provisions of Section 8.06 hereof.
Upon acceptance of appointment by a successor trustee or
successor trust administrator as provided in this Section 8.08, the Depositor
shall mail notice of the succession of such trustee or trust administrator
hereunder to each Holder of Certificates at their respective addresses as shown
in the Certificate Register and to each Rating Agency. If the Depositor fails to
mail such notice within ten (10) days after acceptance of appointment by the
successor trustee or successor trust administrator, the successor trustee or
successor trust administrator, as applicable, shall cause such notice to be
mailed at the expense of the Depositor.
Notwithstanding anything to the contrary contained herein, so
long as no Certificate Insurer Default exists, the appointment of any successor
trustee or successor trust administrator pursuant to any provision of this
Agreement will be subject to the prior written consent of the Certificate
Insurer.
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Neither the Trustee nor the Trust Administrator shall be
liable for the acts or omissions to act of any successor Trustee or successor
Trust Administrator, as applicable, appointed hereunder.
Section 8.09. Merger or Consolidation of Trustee or Trust
Administrator.
Any corporation, bank or association into which the Trustee or
the Trust Administrator may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Trust Administrator
shall be a party, or any corporation, bank or association succeeding to the
business of the Trustee or the Trust Administrator, shall be the successor of
the Trustee or the Trust Administrator hereunder, provided such corporation,
bank or association shall be eligible under the provisions of Section 8.06
hereof, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Estate or property securing the same may at the time be
located, the Trustee with the consent of the Certificate Insurer shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Estate, and to vest in such Person or Persons, in such capacity,
such title to the Trust Estate, or any part thereof, and, subject to the other
provisions of this Section 8.10, such powers, duties, obligations, rights and
trusts as the Depositor and the Trustee may consider necessary or desirable. If
the Trustee shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Certificate Insurer shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereof and no notice to Holders of Certificates of the appointment
of co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that, under any law of any jurisdiction
in which any particular act or acts are to be performed by the Trustee (whether
as Trustee hereunder or as successor to the Master Servicer hereunder), the
Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding
of title to the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed by such separate trustee or co-trustee at the direction
of the Trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them.
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Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Trust Administrator Records.
The Trust Administrator and the Trustee shall afford the
Depositor, the Master Servicer, the Certificate Insurer, the Trustee and each
Certificateholder, upon reasonable notice during normal business hours, access
to all records maintained by the Trust Administrator or the Trustee, as
applicable, in respect of its duties hereunder and access to officers of the
Trust Administrator responsible for performing such duties, such inspection to
take place, in the case of the Trust Administrator, at 000 Xxxx Xxxxx Xxxxxx,
Xx. Xxxx, Xxxxxxxxx 00000 or such other place as designated by the Trust
Administrator and, in the case of the Trustee, at 0000 Xxxxx Xxxxx Xxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000. Upon request, the Trust Administrator and the
Trustee shall each furnish the Master Servicer, the Certificate Insurer, the
Trustee and any requesting Certificateholder with its most recent financial
statements. The Trust Administrator and the Trustee shall cooperate fully with
the Depositor, the Master Servicer and such Certificateholder and shall make
available to the Depositor, the Master Servicer, the Certificate Insurer, the
Trust Administrator or Trustee, as applicable, and such Certificateholder for
review and copying such books, documents or records as may be requested with
respect to the Trustee's or the Trust Administrator's duties hereunder. The
Depositor, the Master Servicer, the Certificate Insurer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Trustee or by the Trust Administrator and are not
obligated to supervise the performance of the Trustee and the Trust
Administrator under this Agreement or otherwise.
Section 8.12. Appointment of Office or Agency.
The Trust Administrator designates its office at 000 Xxxx
Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000 as its agency where the Certificates may
be surrendered for registration of transfer or exchange and presented for final
distribution. The Trust Administrator designates its offices at 000 Xxxx Xxxxx
Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, as the office at which notices and demands to
or
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upon the Trust Administrator in respect of the Certificates may be served and
will notify the Certificateholders of any change in the location of such office
or agency.
Section 8.13. Exercise of Trustee Powers by Certificateholders.
Subject to the provisions of this Article VIII, the
Certificate Insurer, or the Majority Certificateholders with the consent of the
Certificate Insurer (provided that such consent of the Certificate Insurer shall
not be required if a Certificate Insurer Default has occurred and is
continuing), may direct the time, method and place of conducting any proceeding
relating to the Trust or the Certificates or for any remedy available to the
Trustee in its capacity as Trustee (and not in its individual capacity) or the
Trust Administrator in its capacity as Trust Administrator (and not in its
individual capacity) with respect to the Certificates or exercising any trust or
power conferred on the Trustee or the Trust Administrator with respect to the
Certificates or the Trust (except that if a Certificate Insurer Default has
occurred and is continuing then the direction of the Majority Certificateholders
shall control and the Certificate Insurer shall have no right to act); provided,
however, that:
(i) such direction shall not be in conflict with any rule
of law or with this Agreement; and
(ii) each of the Trustee and the Trust Administrator
shall have been provided with indemnity satisfactory to it (provided that an
unsecured letter of indemnity in a form reasonably satisfactory to the Trustee
and the Trust Administrator from a Person which is an insurance company having
long-term unsecured debt that is rated at least investment grade (or having a
comparable claim-paying ability rating) and having a minimum net worth of
$100,000,000 shall satisfy such requirement).
Section 8.14. Representations and Warranties.
Each of the Trustee and the Trust Administrator hereby
represents and warrants to the Master Servicer, the Depositor, the Certificate
Insurer and the Trustee or the Trust Administrator, as applicable, as of the
Closing Date, that:
(i) it is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America.
(ii) The execution and delivery of this Agreement by it, and
the performance and compliance with the terms of this Agreement by it,
will not violate its articles of association or bylaws or 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 agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
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(iii) It has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly
authorized the execution, delivery and performance of this Agreement,
and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a valid, legal and
binding obligation of it, enforceable against it in accordance with the
terms hereof, subject to (A) applicable bankruptcy, insolvency,
receivership, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general principles
of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(v) It is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order
or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority,
which violation, in its good faith and reasonable judgment, is likely
to affect materially and adversely either the ability of it to perform
its obligations under this Agreement.
(vi) No litigation is pending or, to the best of its
knowledge, threatened against it, which would prohibit it from entering
into this Agreement or, in its good faith reasonable judgment, is
likely to materially and adversely affect either the ability of it to
perform its obligations under this Agreement.
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ARTICLE IX
CERTAIN MATTERS REGARDING THE CERTIFICATE INSURER
Section 9.01. Certain Rights of the Certificate Insurer.
By accepting its Certificate, each Holder of a Class A
Certificate agrees that unless a Certificate Insurer Default exists, the
Certificate Insurer shall have the right to exercise all rights of the Class A
Certificateholders (except as provided in Section 11.01), including but not
limited to the following rights, without any consent of the Holders of Offered
Certificates:
(a) the right to direct foreclosures upon Mortgage Loans upon
failure of the Master Servicer to do so for any reason, except that in the case
of Section 3.15(b) hereof;
(b) the right to require the Seller, the Depositor or the
Master Servicer to repurchase or substitute for, Mortgage Loans pursuant to
Section 2.06;
(c) the right to give notices of breach or to terminate the
rights and obligations of the Master Servicer pursuant to Section 7.01;
(d) the right to direct the actions of the Trustee and the
Trust Administrator during the continuance of a Master Servicer Default pursuant
to Sections 7.01 and 7.02; and
(e) the right to direct the Trustee to investigate certain
matters pursuant to Section 8.02(a)(v).
In addition, each Holder of a Class A Certificate agrees that,
unless a Certificate Insurer Default exists, the right to remove the Trustee and
the Trust Administrator pursuant to Section 8.07 hereof may be exercised by the
Majority Certificateholders only with the prior written consent of the
Certificate Insurer.
Section 9.02. Trustee To Act Solely with Consent of the Certificate
Insurer.
(a) Unless a Certificate Insurer Default exists, neither the
Trustee nor the Trust Administrator shall:
(i) terminate the rights and obligations of the Master
Servicer as Master Servicer pursuant to Section 7.01 or consent to the
resignation of the Master Servicer pursuant to Section 6.04;
(ii) terminate any Sub-Servicing Agreements pursuant to
Section 3.03;
(iii) assume any Sub-Servicing Agreements pursuant to
Section 3.06; or
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(iv) undertake any litigation pursuant to either Section
7.05 or 8.02(a)(iii); without the prior written consent of the Certificate
Insurer.
(b) Notwithstanding anything herein to the contrary, after the
occurrence of a Master Servicer Default and until such time as all Master
Servicer Defaults have been cured, no provision of this Agreement shall require
the Trustee or the Trust Administrator to take any action or omit to take any
action at the request of the Certificate Insurer or any Certificateholder to the
extent the Trustee or Trust Administrator believes in good faith such action or
omission would cause the Trustee or the Trust Administrator to violate any law
or regulation applicable to it or to breach their respective obligations owed by
it to the Certificateholders and to the Certificate Insurer, pursuant to this
Agreement or otherwise.
Section 9.03. Trust Estate and Accounts Held for Benefit of the
Certificate Insurer and the Certificateholders.
The Trustee and the Trust Administrator shall hold the Trust
Estate and the Mortgage Files, and shall maintain the Accounts, for the benefit
of the Certificateholders and the Certificate Insurer and all references in this
Agreement (including, without limitation, in Sections 2.02, 2.04, 3.10 and 4.04)
and in the Certificates to the benefit of Holders of the Certificates shall be
deemed to include the Certificate Insurer. The Trustee and Trust Administrator
shall cooperate in all reasonable respects with any reasonable request by the
Certificate Insurer or the Class A Certificateholders (when other than the
Depositor, the Master Servicer or any affiliate thereof), for action to preserve
or enforce the respective rights and interests of the Certificate Insurer or the
Class A Certificateholders (when other than the Depositor, the Master Servicer
or any affiliate thereof) under this Agreement and the Certificates.
The Master Servicer hereby acknowledges and agrees that it
shall service and administer the Mortgage Loans and any REO Properties for the
benefit of the Certificateholders and for the benefit of the Certificate
Insurer, and all references in this Agreement (including, without limitation, in
Sections 3.01(b) and 3.10) to the benefit of or actions on behalf of the
Certificateholders shall be deemed to include the Certificate Insurer. Unless a
Certificate Insurer Default exists, the Master Servicer shall not terminate any
Sub-Servicing Agreements without cause or undertake any litigation pursuant to
Section 3.12(c), without the prior written consent of the Certificate Insurer.
Unless a Certificate Insurer Default exists, neither the Master Servicer nor the
Depositor shall undertake any litigation pursuant to Section 6.03 (other than
litigation to enforce their respective rights hereunder) without the prior
written consent of the Certificate Insurer.
Section 9.04. Effect of Payments by the Certificate Insurer;
Subrogation.
Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Offered Certificates which is
made with moneys received pursuant to the terms of the Policy shall not be
considered payment of the Offered Certificates from the Trust Estate and shall
not result in the payment of or the provision for the payment of the principal
of or
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interest on the Offered Certificates within the meaning of Section 4.04. The
Depositor, the Master Servicer, the Trust Administrator and the Trustee
acknowledge, and each Holder by its acceptance of a Class A Certificate agrees,
that without the need for any further action on the part of the Certificate
Insurer, the Depositor, the Master Servicer, the Trust Administrator or the
Trustee, to the extent the Certificate Insurer makes payments, directly or
indirectly, on account of principal of or interest on the Offered Certificates
to the Holders of such Certificates, the Certificate Insurer will be fully
subrogated to the rights of such Holders to receive such principal and/or
interest from the Trust Estate.
The Trustee, the Depositor, the Trust Administrator and the
Master Servicer shall reasonably cooperate in all respects with any reasonable
request by the Certificate Insurer or the Class A Certificateholders (when other
than the Depositor, the Master Servicer or any affiliate thereof) for action to
preserve or enforce the respective rights or interests of the Certificate
Insurer or the Class A Certificateholders under this Agreement without limiting
the rights or affecting the interests of the Holders as otherwise set forth
herein.
Section 9.05. Notices to the Certificate Insurer.
All notices, statements, reports, certificates or opinions
required by this Agreement to be sent to any other party hereto or to the
Certificateholders if not otherwise required to be sent to the Certificate
Insurer, shall also be sent to the Certificate Insurer.
Section 9.06. Third-Party Beneficiary.
The Certificate Insurer shall be a third-party beneficiary of
this Agreement, entitled to enforce the provisions hereof as if a party hereto.
Section 9.07. Trust Administrator to Hold the Policy.
The Trust Administrator will hold the Policy in trust as agent
for the holders of the Offered Certificates for the purpose of making claims
thereon and distributing the proceeds thereof. Neither the Policy nor amounts
paid on the Policy will constitute part of the Trust Estate or assets of the
Trust. Each holder of Offered Certificates, by accepting its Offered
Certificates, appoints the Trust Administrator as attorney-in-fact for the
purpose of making claims on the Policy.
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ARTICLE X
TERMINATION
Section 10.01. Termination.
(a) Subject to Section 10.02 hereof, this Agreement shall
terminate upon notice to the Trustee and the Trust Administrator of either: (i)
the later of the distribution to Certificateholders of the final payment or
collection with respect to the last Mortgage Loan (or advances of same by the
Master Servicer), or the disposition of all funds with respect to the last
Mortgage Loan and the remittance of all funds due hereunder and the payment of
all amounts due and payable to the Certificate Insurer, the Trustee and the
Trust Administrator or (ii) mutual consent of the Master Servicer, the
Depositor, the Certificate Insurer and each and every Certificateholder in
writing; provided, however, that in no event shall the Trust established by this
Agreement terminate later than twenty-one years after the death of the last
surviving lineal descendant of Xxxx X. Xxxxxxxxxxx, Xx., the late President of
Standard Oil Corporation, alive as of the date hereof.
(b) Subject to Section 10.02 hereof, the Master Servicer may,
at its option terminate, this Agreement on any Distribution Date following the
Call Option Date by purchasing, on the Master Servicer Remittance Date preceding
such Distribution Date, all of the outstanding Mortgage Loans and REO Properties
at a price equal to the sum of (x) the greater of (i) 100% of the Loan Balance
of each such outstanding Mortgage Loan and each such REO Property as of the last
day of the preceding Due Period and (ii) the fair market value (disregarding
accrued interest) of such Mortgage Loans and REO Properties, determined as the
average of three written bids (copies of which shall be delivered to the
Trustee, the Trust Administrator, the Certificate Insurer and the Master
Servicer) made by nationally recognized dealers, (y) 30 days' interest thereon
at a rate equal to the Mortgage Rate (or such lesser rate as may be in effect
due to the application of the Civil Relief Act) and (z) the aggregate amount of
(i) all unreimbursed Delinquency Advances, (ii) all unreimbursed Servicing
Advances relating only to such Mortgage Loans and REO Properties then held as
part of the Trust Estate and (iii) any accrued and unpaid Servicing Fees (such
sum, the "Termination Price"). Any such purchase which results in unpaid
Reimbursement Amounts shall require the consent of the Certificate Insurer.
(c) In connection with any such purchase pursuant to paragraph
(b) above, the Master Servicer shall deposit into the Certificate Account all
amounts then on deposit in the Collection Account (less amounts permitted to be
withdrawn by the Master Servicer pursuant to Section 3.11 hereof), which deposit
shall be deemed to have occurred immediately preceding such purchase.
Any such purchase shall be accomplished by the deposit of
the Termination Price into the Certificate Account on the applicable Master
Servicer Remittance Date, which amount shall be applied to the distributions to
be made on the Distribution Date immediately following such Master Servicer
Remittance Date. Upon such deposit of the Termination Price, the Trustee shall
pay
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the Master Servicer the amount described in clause (z) of the definition of
"Termination Price" from the amounts on deposit in the Certificate Amount.
(d) In connection with any such purchase pursuant to paragraph
(b) above, the party or parties effecting such purchase shall (i) at its or
their own expense, provide to the Trustee and the Trust Administrator an Opinion
of Counsel experienced in federal income tax matters, in form and substance
satisfactory to the Trustee and the Trust Administrator, to the effect that such
purchase constitutes a "Qualified Liquidation" of the Trust, as such term is
defined in the REMIC Provisions, and (ii) give the Trustee, the Trust
Administrator, the Certificate Insurer at least 60 days' prior written notice of
its or their intent to exercise such option. The party or parties effecting the
purchase and the Master Servicer shall at the time discuss future servicing
arrangements for the Mortgage Loans.
(e) Notice of any termination, specifying the Distribution
Date upon which the Trust will terminate shall, after the Trustee's and the
Trust Administrator's receipt of any such notice, be given promptly by the Trust
Administrator by letter to the Certificateholders by first class mail or
overnight delivery during the month of such final distribution two Business Days
after the Determination Date in such month, specifying (i) the Distribution Date
upon which final payment of the Certificates will be made and (ii) the amount of
any such final payment.
(f) Each Holder is required, and hereby agrees, to return to
the Trust Administrator any Certificate with respect to which the Trust
Administrator has made the final distribution due thereon. Any such Certificate
as to which the Trust Administrator has made the final distribution thereon
shall be deemed canceled and shall no longer be outstanding for any purpose of
this Agreement, whether or not such Certificate is ever returned to the Trust
Administrator.
(g) In the event that any amount due to any Regular
Certificateholder remains unclaimed, the Trust Administrator shall, at its
expense, use its best efforts to contact each such Regular Certificateholder by
mail or telephone and if such efforts fail shall cause to be published once, in
the eastern edition of The Wall Street Journal, notice that such money remains
unclaimed. Such funds shall remain uninvested and shall not accrue any interest.
If, within two years after such publication, such amount remains unclaimed, the
party or parties effecting the purchase pursuant to either clause (b) above
shall be entitled to all unclaimed funds and other assets which remain subject
hereto and the Trust Administrator, upon transfer of such funds, shall be
discharged of any responsibility for such funds, and the Certificateholders
shall look to such party for payment.
(h) Following any purchase by the party or parties effecting
the purchase pursuant to clause (b) above, the Trust Administrator shall
promptly release to such party or parties the Mortgage Files for the remaining
Mortgage Loans, and the Trustee shall execute all assignments, endorsements and
other instruments necessary to effect such transfer as are furnished by such
party or parties.
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(i) The Trust Administrator shall return the Policy to the
Certificate Insurer no later than five Business Days following the termination
of this Agreement.
Section 10.02. Additional Termination Requirements.
(a) In the event that the purchase of the Mortgage Loans as
provided in Section 10.01 hereof occurs, the Trust shall be terminated in
accordance with the following additional requirements, unless the party or
parties effecting such purchase obtains at its or their own expense and delivers
or deliver to the Trustee, the Trust Administrator and the Certificate Insurer
an Opinion of Counsel, addressed to the Depositor, the Master Servicer, the
Trustee, the Trust Administrator and the Certificate Insurer, to the effect that
the failure of the Trust to comply with the requirements of this Section 10.02
will not (x) result in the imposition of taxes on "prohibited transactions" of
the Trust as defined in Section 860F of the Code or (y) cause the Trust to fail
to qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the time of the making of the
final payment on the Certificates, the Trustee, on behalf the Trust, shall adopt
a plan of complete liquidation of the Trust, meeting the requirements of a
qualified liquidation under Section 860F of the Code and any regulations
thereunder and shall specify the first day of such period in a statement
attached to the Trust's final Tax Returns pursuant to Treasury Regulations ss.
1.860F1;
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the time of making of the final payment
on the Certificates, the Master Servicer, with the cooperation of the Trustee,
shall conduct a sale of the assets of the Trust Estate to the purchasing party
or parties for cash; and
(iii) At the time of the making of the final payment on
the Certificate, the Trust Administrator shall distribute or credit, or cause to
be distributed or credited, to the purchasing party or parties all cash on hand
in any Account not required to be paid to the Master Servicer, the Regular
Certificateholders, or any other Person, and the Trust shall terminate at that
time.
(b) By their acceptance of Class R Certificates, the related
Holders thereof hereby agree to authorize the Trustee on behalf of the Trust to
adopt a plan of complete liquidation of the Trust, which authorization shall be
binding upon all successor Class R Certificateholders.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Trust Administrator and the Trustee with the
consent of the Certificate Insurer and without the consent of the
Certificateholders; (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with
the provisions of this Agreement; provided, however, that any such action listed
in clause (i) through (iii) above shall not, as evidenced by (A) an Independent
Opinion of Counsel delivered to the Master Servicer, the Certificate Insurer,
Trust Administrator and the Trustee or (B) written confirmation from the Rating
Agencies that such amendment would not result in the withdrawal, downgrade or
qualification of their ratings of any Class of Certificates (as they would be
determined without regard to the existence of the Policy), adversely affect in
any respect the interests of any Certificateholder.
In addition, this Agreement may be amended from time to time
by the Depositor, the Master Servicer, the Trust Administrator and the Trustee
with the consent of the Certificate Insurer with the consent of the majority in
interest of the Holders of any 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 of Certificates; provided, however, that no such amendment or waiver
shall (x) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (y) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66% Percentage Interest in such Class, or (z) reduce
the percentage of Voting Rights required by clause (y) above without the consent
of the Holders of all Certificates of such Class then outstanding.
Notwithstanding any provision of this Agreement to the
contrary, the Trustee shall not consent to any amendment to this Agreement
unless it shall have first received an Independent Opinion of Counsel to the
effect that such amendment will not result in the imposition of a tax on the
Trust pursuant to the REMIC Provisions or cause the Trust to fail to qualify as
a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trust
Administrator shall furnish, at the expense of the Person that requested the
amendment if such Person is the Depositor or the Master Servicer (but in no
event at the expense of the Trust Administrator), otherwise at the expense of
the Trust, a copy of such amendment and the Opinion of Counsel referred to in
the immediately preceding paragraph to the Master Servicer, the Certificate
Insurer and each Rating
135
Agency, and, if such amendment required the consent of Certificateholders, to
the Certificateholders of the Class or Classes whose consent was required.
It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment; instead it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
Each of the Trust Administrator and the Trustee may, but shall
not be obligated to, enter into any amendment pursuant to this 11.01 Section
that affects its rights, duties and immunities under this Agreement or
otherwise.
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer at the expense of the Trust, to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
136
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 25% of the Voting Rights shall have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity (provided that an unsecured letter of
indemnity in a form reasonably satisfactory to the Trustee from a Holder which
is an insurance company having long-term unsecured debt which is rated at least
investment grade (or having a comparable claim-paying ability rating) and having
a minimum net worth of $100,000,000 shall satisfy such requirement) as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 15 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding. It is understood and intended, and expressly
covenanted by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue of any provision of this Agreement to affect, disturb
or prejudice the rights of the Holders of any other of such Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
which priority or preference is not otherwise provided for herein, or to enforce
any right under this Agreement, except in the manner herein provided and for the
equal, ratable and common benefit of all Certificateholders. For the protection
and enforcement of the provisions of this Section 11.03 each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
Section 11.05. Notices.
All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given (except as otherwise
provided in Section 11.12 hereof) if personally delivered at or mailed by first
class mail, postage prepaid, or by express delivery service, to (a) in the case
of the Master Servicer, 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (telecopy
number
137
(000) 000-0000), or such other address or telecopy number as may hereafter be
furnished to the Depositor, the Certificate Insurer, the Trust Administrator and
the Trustee in writing by the Master Servicer, (b) in the case of the Trust
Administrator, U.S. Bank National Association, 000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx,
Xx. Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance/New Century 1999- NCB
(telecopy number (000) 000-0000), or such other address or telecopy number as
may hereafter be furnished to the Depositor, the Certificate Insurer, the Trust
Administrator and the Master Servicer in writing by the Trustee, (c) in the case
of the Depositor, 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (telecopy
number (000) 000-0000), or such other address or telecopy number as may be
furnished to the Certificate Insurer, the Master Servicer, Trust Administrator
and the Trustee in writing by the Depositor, (d) in the case of the Trustee,
Firstar Bank Milwaukee, N.A., 1555 Xxxxx Xxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxx 00000, or such other address or telecopy number as may be
furnished to the Certificate Issuer, the Master Servicer, the Trustee and the
Depositor in writing by the Trustee, and (e) in the case of the Certificate
Insurer, Financial Security Assurance, Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Surveillance Department, Re: New Century Asset backed
pass-through Certificates, Series 1999-NCB, (212) 826- 0100, telecopy number
(000) 000-0000 (in each case in which notice or other communication to the
Certificate Insurer refers to a Master Servicer Default or a claim on the Policy
or with respect to which failure on the part of the Certificate Insurer to
respond shall be deemed to constitute consent or acceptance, then a copy of such
notice or other communication shall also be sent to the attention of each of the
General Counsel and the Head -- Financial Guaranty Group and shall be marked to
indicate "URGENT MATERIAL ENCLOSED"), or such other address or telecopy number
as may hereafter be furnished to the Trustee, the Trust Administrator, the
Depositor and the Master Servicer in writing by the Certificate Insurer. Any
notice required or permitted to be mailed to a Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. Notice of any Master Servicer Default shall be given
by telecopy and by certified mail. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have duly been
given when mailed, whether or not the Certificateholder receives such notice. A
copy of any notice required to be telecopied hereunder shall also be mailed to
the appropriate party in the manner set forth above.
Section 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07. Article and Section References.
All article and section references used in this Agreement,
unless otherwise provided, are to articles and sections in this Agreement.
138
Section 11.08. Notice to the Rating Agencies.
(a) Each of the Trust Administrator and the Master Servicer
shall be obligated to use its best reasonable efforts promptly to provide notice
to the Rating Agencies with respect to each of the following of which a
Responsible Officer of the Trust Administrator or Master Servicer, as the case
may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii)the occurrence of any Master Servicer Default that
has not been cured or waived;
(iii) the resignation or termination of the Master
Servicer or the Trust Administrator;
(iv) the final payment to Holders of the Certificates of
any Class;
(v) any change in the location of any Account; and
(vi) if the Trust Administrator or the Trustee is acting
as successor Master Servicer pursuant to Section 7.02 hereof, any event that
would result in the inability of the Trust Administrator or the Trustee to make
Delinquency Advances.
(b) In addition, (i) the Trust Administrator shall promptly
furnish to each Rating Agency copies of the following:
(A) each annual report to Certificateholders described in
Section 4.05 hereof; and
(B) each Statement to Certificateholders described in Section
4.05 hereof; and
(ii) the Master Servicer shall promptly furnish to each Rating
Agency copies of the following:
(A) each annual statement as to compliance described in
Section 3.19 hereof;
(B) each annual independent public accountants' servicing
report described in Section 3.20 hereof;
(C) each Collection Account Statement described in Section
3.18(b) hereof; and
(D) each notice delivered pursuant to Section 7.01(a) hereof
which relates to the fact that the Master Servicer has not made a Delinquency
Advance.
139
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to
Standard & Poor's, a division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group; and
Xxxxx'x Investors Service, Inc., Pass-Through Monitoring Department, 00 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Group.
Section 11.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither
the Regular Certificateholders, the Trust Administrator, nor the Trustee shall
have any obligation to consent to any amendment or modification of this
Agreement unless they have been provided reasonable security or indemnity
against their out-of-pocket expenses (including reasonable attorneys' fees) to
be incurred in connection therewith.
Section 11.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders, the
Certificate Insurer and the parties hereto and their successors hereunder, any
benefit or any legal or equitable right, remedy or claim under this Agreement.
Section 11.11. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by the Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by agent duly appointed in writing; and such action shall become
effective when such instrument or instruments are delivered to the Trustee, the
Trust Administrator, the Master Servicer, and the Certificate Insurer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Trust,
if made in the manner provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
140
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Certificate.
Section 11.12. Tax Matters Person.
So long as the Master Servicer owns a 100% Percentage Interest
in the Class R Certificate, the Master Servicer shall act as the Tax Matters
Person for the Trust for all purposes of the Code. The Tax Matters Person shall
perform, or cause to be performed, such duties, and shall take, or cause to be
taken, such actions as are required to be performed or taken by a "tax matters
person" under the Code. The Master Servicer, as Tax Matters Person, hereby
appoints the Trust Administrator to act as agent of the Tax Matters Person. If
the Master Servicer hereafter transfers ownership of a Percentage Interest in
the Class R Certificates to a third party, the Master Servicer may appoint such
third party to be the Tax Matters Person for the Trust.
141
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Trustee and the Trust Administrator have caused their names to be signed hereto
by their respective officers thereunto duly authorized, all as of the day and
year first above written.
NEW CENTURY MORTGAGE SECURITIES, INC.,
as Depositor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
NEW CENTURY MORTGAGE CORPORATION,
as Master Servicer
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
FIRSTAR BANK MILWAUKEE, N.A.,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Trust Administrator
By: /s/ Xxxxx X. Xxxx
------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
142
STATE OF ___________________ )
) ss.:
COUNTY OF _________________ )
On the ___th day of September, 1999 before me, a notary public
in and for said State, personally appeared __________________, known to me to be
a Vice President of New Century Mortgage Securities, Inc., a Delaware
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
000
XXXXX XX XXXXXXXXXX )
)ss.:
COUNTY OF ORANGE )
On the ___th day of September, 1999 before me, the
undersigned, a notary public in and for said State, personally appeared
___________________, known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument,
and acknowledged to me that he executed it in his authorized capacity, and that
by his signature on the instrument, such corporation executed the within
instrument.
WITNESS my hand and affixed my official seal.
Notary Public
144
STATE OF ____________ )
) ss.:
COUNTY OF __________ )
On the ___th day of September, 1999 before me, a notary public
in and for said State, personally appeared _____________, known to me to be a
Vice President of Firstar Bank Milwaukee, N.A., a national banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
000
XXXXX XX XXXXXXXXX )
) ss.:
COUNTY OF__________ )
On the ___th day of September, 1999 before me, a notary public
in and for said State, personally appeared _____________, known to me to be a
Vice President of U.S. Bank National Association, a national banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
146\
EXHIBIT A
FORM OF SENIOR CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OF
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
New Century Home Equity Loan Trust, Original Certificate Principal Balance
Series 1999-NCB, Class A-__ of Class A-__ Certificates:
Certificate Pass-Through Rate: ___% $____________
Initial Certificate Principal
Balance:$______________
Date of Pooling and Servicing Issue Date: September 28, 1999
Agreement and Initial Cut-Off Date:
September 1, 1999
First Distribution Date:
October 25, 1999
No. ___ CUSIP No. 64352B
NEW CENTURY EQUITY LOAN TRUST, SERIES 1999-NCB
ASSET BACKED PASS-THROUGH CERTIFICATE
CLASS A-__
evidencing a beneficial ownership interest in a Trust Estate established by NEW
CENTURY MORTGAGE SECURITIES, INC. consisting primarily of a pool of closed end,
fixed-rate, one- to four-family, first and second mortgage loans originated by,
or purchased from others by,
NEW CENTURY MORTGAGE CORPORATION
This Certificate is payable solely from the assets of the Trust and
does not represent an obligation of or interest in New Century Mortgage
Corporation, NC Capital Corporation, New Century Mortgage Securities, Inc., the
Trustee or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed by any agency or instrumentality of the United
States.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate as set forth above by
$____________, such amount being the initial aggregate Class A-__ Certificate
Principal Balance of all of the Class A-__ Certificates) in the Trust Estate
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among New Century Mortgage Corporation as master servicer
(the "Servicer," which term includes any successor entity under the Agreement),
New Century Mortgage Securities, Inc. as depositor, U.S. Bank National
Association as trust administrator (the "Trust Administrator") and Firstar Bank
Milwaukee, N.A. as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions are required to
be made on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the month immediately preceding the month of such distribution (the "Record
Date") [Different for Class A-1 Certificates], in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount to be
distributed to such Class as of such Distribution Date.
The Holder of this Certificate is entitled to [principal] [interest]
payments [on each] [as set forth in the Agreement] on the applicable [ for A-6]
Distribution Date which will fully amortize the Initial Certificate Principal
Balance, as set forth on the front page hereof, from the date of the initial
delivery hereof to the final Distribution Date of the Class A-__ Certificates.
Therefore, the actual outstanding principal amount of this Class A-__
Certificate on any date subsequent to October 25, 1999 (the first Distribution
Date) will be less than the Initial Certificate Principal Balance set forth on
the front page hereof.
2
All distributions under the Agreement on the Class A-__ Certificates
will be made or caused to be made by the Trust Administrator by (i) wire
transfer of immediately available funds to the account of the Person entitled
thereto at a bank or other entity having appropriate facilities therefor, if
such Person shall have so notified the Trust Administrator in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-__ Certificates
evidencing a Percentage Interest aggregating at least 10% or (ii) check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register.
This Certificate is one of a duly authorized issue of Certificates
designated as New Century Home Equity Loan Trust, Series 0000-XXX, Xxxxx Backed
Pass-Through Certificates of the series specified on the front page hereof
(herein called the "Certificates") and representing the Percentage Interest
specified on the front page hereof in the Class A-__ Certificates.
The final distribution on this Certificate will be made only upon
presentation and surrender of this Certificate at the office or agency of the
Trust Administrator in St. Xxxx, Minnesota. The Agreement provides that, in any
event, upon the making of the final distribution due on this Certificate, this
Certificate shall be deemed canceled for all purposes under the Agreement.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Collection Account and the Certificate Account may be made from time to time for
purposes other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof by the Depositor, the Master Servicer, the Trust
Administrator, and the Trustee with the consent of the Majority
Certificateholders; PROVIDED, HOWEVER, that no such amendment or waiver shall
reduce in any manner the amount of, or delay the timing of, distributions on any
Certificate without the consent of the Holder thereof, or adversely affect in
any respect the interests of the Holders of any Class of Certificates without
the consent of the Holders of Certificates evidencing at least a 66% Percentage
Interest in such Class. No amendment shall reduce the percentage of Voting
Rights required in the previous sentence without the consent of the Holders of
all Certificates of such Class then outstanding. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate.
As provided in the Agreement and subject to certain limitations therein
set forth and referred to on the face hereof, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the office or agency appointed by the Trust
Administrator as provided in the Agreement, duly endorsed by, or accompanied by
a written instrument of transfer in the form attached hereto duly executed by,
the Holder hereof or such
3
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only in Classes
and denominations representing Percentage Interests specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Master Servicer, the Depositor, the Trust Administrator and the
Trustee and any agent of the Master Servicer, the Depositor, the Trust
Administrator or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Master
Servicer, the Depositor, the Trust Administrator and the Trustee nor any such
agent shall be affected by notice to the contrary.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
The obligations created by the Agreement and the Trust created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Estate.
The Agreement additionally provides that the Master Servicer or the
Certificate Insurer may, at its option, purchase from the Trust all (but not
fewer than all) remaining Mortgage Loans and other property in the Trust Fund
then constituting part of the Trust Estate, and thereby effect early retirement
of the Certificates, on and after the Distribution Date on which the Aggregate
Loan Balance is less than or equal to 10% of the Cut-off Date Pool Balance.
Unless the certificate of authentication hereon has been executed by
the Trust Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
4
IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.
Dated: September __, 1999
U.S. BANK NATIONAL ASSOCIATION,
as Trust Administrator
By__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-_ Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trust Administrator
By__________________________________
Authorized Officer
5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal ZIP code, and
Taxpayer Identification Number of assignee) a Percentage Interest equal to ___%
evidenced by the within Certificate and hereby authorizes the transfer of
registration of such interest to such assignee on the Certificate Register of
the Trust.
I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.
Dated: ___________________________
_____________________________________
Signature by or on behalf of assignor
6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
________________________________________________________________________________
______________________________ Distributions shall be made, by wire transfer or
otherwise, in immediately available funds to ___________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
Applicable statements should be mailed ____________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________________, as
its agent.
7
EXHIBIT B
FORM OF CLASS R CERTIFICATES
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC"), AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE THAT (A)
SUCH TRANSFEREE IS A "PERMITTED TRANSFEREE," WHICH INCLURDE ANY UNITED STATES
PERSON THAT IS NOT (1) THE UNITED STATES OR ANY POSSESSION THEREOF, ANY STATE OR
POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
THAT IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED
TO AS A "DISQUALIFIED ORGANIZATION"), (4) AN AGENT OF A DISQUALIFIED
ORGANIZATION OR (5) AN "ELECTING LARGE PARTNERSHIP" (AS DESCRIBED SECTION 775 OF
THE CODE) AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A PERSON OTHER THAN A PERMITTED TRANSFEREE OR AN AGENT OF A
PERSON OTHER THAN A PERMITTED TRANSFEREE, SUCH REGISTRATION SHALL BE DEEMED TO
BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO
BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(d) OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A PERSON
OTHER THAN A PERMITTED TRANSFEREE IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
New Century Home Equity Loan Trust,
Series 1999-NCB, Class R
Certificate Percentage Interest: 100% Date of Pooling and Servicing Agreement
and Cut-Off Date: September 1, 1999
First Distribution Date:
October 25, 1999 Issue Date: September 28, 1999
Certificate No. 1
2
NEW CENTURY HOME EQUITY LOAN TRUST, SERIES 1999-NCB
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
CLASS R
evidencing a beneficial ownership interest in a Trust Estate established by NEW
CENTURY MORTGAGE SECURITIES, INC. consisting primarily of a pool of closed end,
fixed-rate, one- to four-family, first and second lien mortgage loans originated
by, or purchased from others by,
NEW CENTURY MORTGAGE SECURITIES, INC.
This Certificate is payable solely from the assets of the Trust and
does not represent an obligation of or interest in New Century Mortgage
Corporation, NC Capital Corporation, New Century Mortgage Securities, Inc., the
Trustee or any of their affiliates. Neither this Certificate nor the underlying
Mortgage Loans are guaranteed by any agency or instrumentality of the United
States.
This certifies that NC Residual II Corporation is the registered owner
of the Percentage Interest evidenced by this Certificate (obtained by dividing
the Percentage Interest of this Certificate as set forth above by 100%, such
amount being the initial aggregate Class R Percentage Interest of all of the
Class R Certificates) in the Trust Estate created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among New
Century Mortgage Corporation as master servicer (the "Master Servicer," which
term includes any successor entity under the Agreement), New Century Mortgage
Securities, Inc. as depositor, U.S. Bank National Association as trust
administrator (the "Trust Administrator") and Firstar Bank Milwaukee, N.A. as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions are required to
be made on the 25th day of each month or, if such 25th day is not a Business
Day, the Business Day immediately following (a "Distribution Date"), commencing
on the first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the Business Day
immediately preceding the Distribution Date (the "Record Date"), in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount to be distributed to such Class as of such Distribution Date.
All distributions under the Agreement on the Class R Certificates will
be made or caused to be made by the Trust Administrator by (i) wire transfer of
immediately available funds to the account of the Person entitled thereto at a
bank or other entity having appropriate facilities therefor, if such Person
shall have so notified the Trust Administrator in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of Class A-1 Certificates evidencing a Percentage Interest
aggregating at least 10% or (ii) check mailed by first class mail to the address
of the Person entitled thereto, as such name and address shall appear on the
3
Certificate Register.
This Certificate is one of a duly authorized issue of Certificates
designated as New Century Home Equity Loan Trust, Series 0000-XXX, Xxxxx Backed
Pass-Through Certificates of the series specified on the front page hereof
(herein called the "Certificates") and representing the Percentage Interest
specified on the front page hereof in the Class R Certificates.
The final distribution on this Certificate will be made only upon
presentation and surrender of this Certificate at the office or agency of the
Trust Administrator in St. Xxxx, Minnesota. The Agreement provides that, in any
event, upon the making of the final distribution due on this Certificate, this
Certificate shall be deemed canceled for all purposes under the Agreement.
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. As provided in the Agreement, withdrawals from the
Collection Account and the Certificate Account may be made from time to time for
purposes other than distributions to Certificateholders, such purposes including
reimbursement of advances made, or certain expenses incurred, with respect to
the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof by the Depositor, the Master Servicer, the Trust
Administrator, and the Trustee with the consent of the Majority
Certificateholders; PROVIDED, HOWEVER, that no such amendment or waiver shall
reduce in any manner the amount of, or delay the timing of, distributions on any
Certificate without the consent of the Holder thereof, or adversely affect in
any respect the interests of the Holders of any Class of Certificates without
the consent of the Holders of Certificates evidencing at least a 66% Percentage
Interest in such Class. No amendment shall reduce the percentage of Voting
Rights required in the previous sentence without the consent of the Holders of
all Certificates of such Class then outstanding. Any such consent by the Holder
of this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate.
As provided in the Agreement and subject to certain limitations therein
set forth and referred to on the face hereof, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the office or agency appointed by the Trust
Administrator as provided in the Agreement, duly endorsed by, or accompanied by
a written instrument of transfer in the form attached hereto duly executed by,
the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations evidencing the same aggregate Percentage Interest will be issued
to the designated transferee or transferees.
The Certificates are issuable in fully registered form only in Classes
and denominations representing Percentage Interests specified in the Agreement.
As provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of
4
the same Class in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trust Administrator shall require receipt of
(i) if such transfer is purportedly being made in reliance upon Rule 144A under
the 1933 Act, written certifications from the Holder of the Certificate desiring
to effect the transfer, and from such Holder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit H-1, and (ii) in
all other cases, an Opinion of Counsel satisfactory to it that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust or of the Depositor, the Trustee, the Trust
Administrator or the Master Servicer in their respective capacities as such),
together with copies of the written certification(s) of the Holder of the
Certificate desiring to effect the transfer and/or such Holder's prospective
transferee upon which such Opinion of Counsel is based. None of the Depositor,
the Trustee or the Trust Administrator is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any Holder desiring to effect a transfer of this Certificate
shall be required to indemnify the Trustee, the Trust Administrator, the
Depositor and the Master Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(b)(ii) of the Agreement.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is a Permitted Transferee or the
agent (including a broker, nominee or middleman) of a Permitted Transferee, and
(ii) a certificate that acknowledges that (A) the Class R Certificates have been
designated as a residual interest in a REMIC, (B) it will include in its income
a PRO RATA share of the net income of the Trust and that such income may be an
"excess inclusion," as defined in the Code, that, with certain exceptions,
cannot be offset by other losses or benefits from any tax exemption, and (C) it
expects to have the financial means to satisfy all of its tax obligations
including those relating to holding the Class R Certificates. Notwithstanding
the registration in the Certificate Register of any transfer, sale or other
disposition of this Certificate to a Permitted Transferee or an agent (including
a broker, nominee or middleman) of a Permitted Transferee, such registration
shall be deemed to be of no legal force or effect whatsoever and such Person
shall not be deemed to be a Certificateholder for any purpose, including, but
not limited to, the receipt of distributions in respect of this Certificate.
5
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust to cease to
qualify as a REMIC or cause the imposition of a tax upon the REMIC.
No service charge will be made for any such registration of transfer or
exchange, but the Trust Administrator may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Certificates.
The Master Servicer, the Depositor, the Trust Administrator and the
Trustee and any agent of the Master Servicer, the Depositor, the Trust
Administrator or the Trustee may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Master
Servicer, the Depositor, the Trust Administrator and the Trustee nor any such
agent shall be affected by notice to the contrary.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
The obligations created by the Agreement and the Trust created thereby
shall terminate upon payment to the Certificateholders of all amounts held by or
on behalf of the Trustee and required to be paid to them pursuant to the
Agreement following the final payment or other liquidation (or any advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Estate.
The Agreement additionally provides that the Master Servicer or the
Certificate Insurer may, at its option, purchase from the Trust all (but not
fewer than all) remaining Mortgage Loans and other property in the Trust Fund
then constituting part of the Trust Estate, and thereby effect early retirement
of the Certificates, on and after the Distribution Date on which the Aggregate
Loan Balance is less than or equal to 10% of the Cut-off Date Pool Balance.
Unless the certificate of authentication hereon has been executed by
the Trust Administrator, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
6
IN WITNESS WHEREOF, the Trust Administrator has caused this Certificate
to be duly executed.
Dated: September __, 1999
U.S. BANK NATIONAL ASSOCIATION,
as Trust Administrator
By__________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R [SR] Certificates referred to in the
within-mentioned Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trust Administrator
By__________________________________
Authorized Officer
7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal ZIP code, and
Taxpayer Identification Number of assignee) ____________________________________
______________________________________________________________________________ a
Percentage Interest equal to ___% evidenced by the within Certificate and hereby
authorizes the transfer of registration of such interest to such assignee on the
Certificate Register of the Trust.
________________________________________________________________________________
________ I (we) further direct the Trustee to issue a new Certificate of a like
Percentage Interest and Class to the above named assignee and deliver such
Certificate to the following address: __________________________________________
_______________________________________________________________________________.
Dated: ___________________________
_____________________________________
Signature by or on behalf of assignor
8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
________________________________________________________________________________
______________________________ Distributions shall be made, by wire transfer or
otherwise, in immediately available funds to ___________________________________
for the account of _____________________________________________________________
account number _______________, or, if mailed by check, to _____________________
Applicable statements should be mailed ____________________________________.
This information is provided by ___________________________________________, the
assignee named above, or ________________________________________________, as
its agent.
9
EXHIBIT C
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
EXHIBIT D-1
REQUEST FOR RELEASE
(Mortgage Loan Servicing or Foreclosure)
Loan Information
----------------
Name of Mortgagor: ___________________________
Servicer Loan No.: ___________________________
Trustee
-------
Name: ___________________________
Address: ___________________________
Trustee Mortgage File No.: ___________________________
Seller
------
Name: ___________________________
Address: ___________________________
Certificates: New Century Home Equity Loan Trust
1999-NCB, Asset Backed Pass-Through
Certificates.
Reason for Request (check one)
------------------
_____ 1. Mortgage Loan liquidated.
_____ 2. Mortgage Loan in foreclosure.
_____ 3. Mortgage Loan repurchased.
_____ 4. Mortgage Loan substituted.
_____ 5. Other (explain) ______________________________
The undersigned Master Servicer hereby requests delivery to it from the
Trustee of the documents referred to below (the "Documents"). Upon the Master
Servicer's receipt of the
Documents, the Master Servicer will provide the Trust Administrator with a
written acknowledgement of such receipt. All capitalized terms not otherwise
defined in this Request for Release shall have the meanings given them in the
Pooling and Servicing Agreement dated as of September 1, 1999, among the
Trustee, the Trust Administrator, the Master Servicer and the Depositor.
( ) Promissory Note dated _____________________, 19[20]__, in the original
principal sum of $_______________, made by ______________________,
payable to, or endorsed to the order of, the Trustee.
( ) Mortgage recorded on ______________ as instrument no.
_____________________ in the County Recorder's Office of the County of
________________, State of ______________ in book/reel/docket
________________ of official records at page/image __________.
( ) Deed of Trust recorded on ______________________ as instrument no.
____________ in the County Recorder's Office of the County of
_________________ , State of ______________________ in book\reel\docket
of official records at page/image _________ .
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
______________________ as instrument no. ______________ in the County
Recorder's Office of the County of ________________, State of
________________ in book/reel/docket ________________ of official
records at page/image ____ .
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) ______________________________________
( ) ______________________________________
( ) ______________________________________
( ) ______________________________________
The Master Servicer hereby acknowledges and agrees as follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or permit the Documents to
become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master Servicer
assert or seek to assert any claims or rights of setoff to or
against the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from
2
the Mortgage File to the Trustee when the need therefor no longer exists, unless
the Mortgage Loan relating to the Documents has been liquidated and the proceeds
thereof have been remitted to the Collection Account and except as expressly
provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, shall at all times be earmarked for the account of the Trustee except
as expressly provided in the Agreement, and the Master Servicer shall keep the
Documents and any proceeds separate and distinct from all other property in the
Master Servicer's possession, custody or control.
NEW CENTURY MORTGAGE CORPORATION,
as Master Servicer
By:___________________________________
Its:
Date: _________________, 19[20]__
3
EXHIBIT D-2
REQUEST FOR RELEASE
(Mortgage Loans Paid in Full)
OFFICER'S CERTIFICATE AND TRUST RECEIPT
NEW CENTURY HOME EQUITY LOAN TRUST, SERIES 1999-NCB
ASSET BACKED PASS-THROUGH CERTIFICATES
HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE
OFFICE SET FORTH BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS
FOLLOWS:
________________________________________________________________________________
WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.
LOAN NUMBER: ________________ BORROWER'S NAME _______________
COUNTY: _____________________
WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT HAVE BEEN OR WILL BE CREDITED.
DATED: _____________________
/ / VICE PRESIDENT
/ / ASSISTANT VICE PRESIDENT
EXHIBIT E-1
FORM OF TRUST ADMINISTRATOR INITIAL CERTIFICATION
September 28, 1999
New Century Mortgage Securities, Inc.
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 1999,
among New Century Mortgage Securities, Inc., New Century
Mortgage Corporation, Firstar Bank, N.A.and U.S. Bank
National Association, Asset Backed Pass-Through Certificates,
Series 1999-NC4
---------------------------------------------------------------
Ladies and Gentlemen:
Attached is the Trust Administrator's preliminary exception
report delivered in accordance with the referenced Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"). Capitalized terms used but
not otherwise defined herein shall have the meanings set
forth in the Pooling and Servicing Agreement.
The Trust Administrator has made no independent examination of
any documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trust Administrator makes
no representations as to (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File pertaining
to the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in clause (v) of Section 2.04 of the Pooling and Servicing Agreement.
U.S. BANK NATIONAL ASSOCIATION
By:____________________________
Name:
Title:
EXHIBIT E-2
FORM OF TRUST ADMINISTRATOR'S FINAL CERTIFICATION
[Date]
New Century Mortgage Securities, Inc.
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 1999,
among New Century Mortgage Securities, Inc., New Century
Mortgage Corporation, Firstar Bank, N.A. and U.S. Bank
National Association, Asset Backed Pass-Through Certificates,
Series 1999-NC4
---------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.04 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trust Administrator, hereby certifies
that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or listed on the attachment hereto), it or a
Custodian on its behalf has received:
(i) the original recorded Mortgage, and the original recorded
power of attorney, if the Mortgage was executed pursuant to a power of
attorney, or a certified copy thereof in those instances where the
public recording office retains the original or where the original has
been lost;
(ii) an original recorded Assignment of the Mortgage to the Trust
Administrator together with the original recorded Assignment or
Assignments of the Mortgage showing a complete chain of assignment from
the originator, or a certified copy of such Assignments in those
instances where the public recording retains the original or where
original has been lost; and
(iii) the original lender's title insurance policy.
The Trust Administrator has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trust
Administrator makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained in
the Mortgage File of any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
U.S. BANK NATIONAL ASSOCIATION
By:________________________________
Name:
Title:
2
EXHIBIT E-3
FORM OF TRUST ADMINISTRATOR QUARTERLY CERTIFICATION
_______ , 1999
New Century Mortgage Securities, Inc.
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 1999,
among New Century Mortgage Securities, Inc., New Century
Mortgage Corporation, Firstar Bank, N.A. and U.S. Bank
National Association, Asset Backed Pass-Through Certificates,
Series 1999-NC4
---------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.05 of the above-referenced Pooling and
Servicing Agreement, the undersigned, as Trust Administrator, hereby sets forth
an updated exception report from the previous Trust Administrator's
Certification issued [INSERT DATE].
The Trust Administrator has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trust
Administrator makes no representations as to: (i) the validity, legality,
sufficiency, enforceability, execution by a Responsible Officer, or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan or (iii)
the existence of any document specified in clause (v) of Section 2.04(a).
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
U.S. BANK NATIONAL ASSOCIATION,
as Trust Administrator
By: ______________________________________
Name:
Title:
EXHIBIT F
FORM OF LIQUIDATION REPORT
Customer Name:
Account Number:
Original Principal Balance:
1. Type of Liquidation (REO disposition/charge-off/short pay-off)
- Date last paid
- Date of foreclosure
- Date of REO
- Date of REO Disposition
- Property Sale Price/Estimated Market Value at disposition
2. Liquidation Proceeds
Principal Prepayment $___________
Property Sale Proceeds ___________
Insurance Proceeds ___________
Other (itemize) ___________
Total Proceeds $___________
3. Liquidation Expenses
Servicing Advances $___________
Monthly Advances ___________
Contingency Fees ___________
Excess Servicing Fees ___________
Servicing Fees ___________
Annual Expense
Escrow Amount ___________
Supplemental Fee (if any) ___________
Additional Interest (if any) ___________
Total Advances $___________
4. Net Liquidation Proceeds $___________
(Item 2 minus Item 3)
5. Principal Balance of Mortgage Loan $___________
6. Loss, if any (Item 5 minus Item 4) $___________
EXHIBIT G-1
FORM OF TRANSFER CERTIFICATION
[Date]
U.S. Bank National Association
First Trust Center
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 1999,
among New Century Mortgage Securities, Inc., New Century
Mortgage Corporation, Firstar Bank, N.A. and U.S. Bank
National Association, Asset Backed Pass-Through Certificates,
Series 1999-NCB
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
September 1, 1999, among New Century Mortgage Securities, Inc. as Depositor, New
Century Mortgage Corporation as Master Servicer, Firstar Bank Milwaukee, N.A. as
Trustee and U.S. Bank National Association as Trust Administrator (the "Pooling
and Servicing Agreement"), pursuant to which Pooling and Servicing Agreement the
Certificates were issued.
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:________________________________
Name:
Title:
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
U.S. Bank National Association
First Trust Center
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 1999,
among New Century Mortgage Securities, Inc., New Century
Mortgage Corporation, Firstar Bank, N.A. and U.S. Bank
National Association, Asset Backed Pass-Through Certificates,
Series 1999-NCB
---------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933 (the "1933 Act") and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The
Transferee is aware that the sale to it is being made in reliance on
Rule 144A. The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the
Pooling and Servicing Agreement referred to below, and (d) any credit
enhancement mechanism associated with the Certificates, that it has
requested.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of September 1, 1999, among New Century Mortgage Securities,
Inc. as Depositor, New Century Mortgage Corporation as Master Servicer, Firstar
Bank Milwaukee, N.A. as trustee and U.S. Bank National Association as Trust
Administrator, pursuant to which the Certificates were issued.
[TRANSFEREE]
By:________________________
Name:
Title:
ANNEX 1 TO EXHIBIT G-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and U.S. Bank National Association, as Trust
Administrator, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and
---------------------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
2
predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies
and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is
3
made of any changes in the information and conclusions herein. Until such notice
is given, the Transferee's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Transferee is a bank or savings and loan as provided above, the
Transferee agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
Dated:
____________________________________
Print Name of Transferee
By:_________________________________
Name:
Title:
4
ANNEX 2 TO EXHIBIT G-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and U.S. Bank National Association, as Trust
Administrator, with respect to the mortgage pass-through certificates (the
"Certificates") described in the Transferee Certificate to which this
certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition,
the Transferee will only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
__________________________________________
Print Name of Transferee or Advisor
By:_______________________________________
Name:
Title:
IF AN ADVISER:
__________________________________________
Print Name of Transferee
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
as amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on
a discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser_______________________________________________________________
By: (Signature)______________________________________________________________
Name of Signatory_______________________________________________________________
Title___________________________________________________________________________
Date of this certificate________________________________________________________
Date of information provided in paragraph 3_____________________________________
EXHIBIT G-2
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
_____________, 199__
New Century Mortgage Securities, Inc. Firstar Bank Milwaukee, N.A.
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
U.S. Bank National Association New Century Mortgage Corporation
First Trust Center 18400 Xxx Xxxxxx
000 Xxxx Xxxxx Xxxxxx Xxxxx 0000
Xx. Xxxx, Xxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxx 00000
Re: Pooling and Servicing Agreement, dated as of September 1, 1999,
among New Century Mortgage Securities, Inc., New Century
Mortgage Corporation, Firstar Bank, N.A. and U.S. Bank
National Association, Asset Backed Pass-Through Certificates,
Series 1999-NCB
---------------------------------------------------------------
Dear Sirs:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of New Century Home Equity Loan Trust, Series
0000-XXX, Xxxxx Backed Pass-Through Certificates, Series 1999-NCB, Class ___
(the "Certificates", issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of September 1, 1999 among New
Century Mortgage Securities, Inc. as depositor (the "Depositor"), New Century
Mortgage Corporation as master servicer (the "Master Servicer") Firstar Bank
Milwaukee, N.A. as trustee and U.S. Bank National Association as trust
administrator (the "Trust Administrator"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee, the Trust Administrator and
the Master Servicer that the following statements in either (1) or (2) are
accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or other retirement arrangement, including
individual retirement accounts and annuities, Xxxxx plans and bank
collective investment funds and insurance company general or separate
accounts in which such plans, accounts or arrangements are invested,
that is subject to Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
(ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss.
2510.3-101, and (iii) will not be transferred to any entity that is
deemed to be investing in plan assets within the meaning of the DOL
regulation at 29 C.F.R. ss. 2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under
ERISA or Section 4975 of the Code, will not subject the Depositor, the
Trustee or the Master Servicer to any obligation in
2
addition to those undertaken in the Pooling and Servicing Agreement and
one of the following conditions are met:
(i) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificate is an
"insurance company general account" (as such term is defined
in PTCE 95-60), (B) the conditions set forth in PTCE 95-60
have been satisfied and (C) there is no Plan with respect to
which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan
and all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same
employee organization, exceeds 10% of the total of all
reserves and liabilities of such general account (as
determined under PTCE 95-60) as of the date of the acquisition
of such Certificates;
(ii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
insurance company general account, (B) the requirements of
Section 401(c) of ERISA and the regulations to be promulgated
thereunder ("401(c) Regulations") have been satisfied and will
continue to be satisfied and (C) the insurance company
represents that it understands that the operation of the
general account after December 31, 1998 may affect its ability
to continue to hold such Certificates after the date which is
18 months after the 401(c) Regulations become final and that
unless a Class Exemption or an exception under Section 401(c)
of ERISA is then available for the continued holding of such
Certificates, it will dispose of such Certificates prior to
the date which is 18 months after the 401(c) Regulations
become final;
(iii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
"insurance company pooled separate account" (as such term is
defined in PTCE 90-1), (B) the conditions set forth in PTCE
90-1 have been satisfied and (C) there is no Plan, together
with all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 90- 1) or by the same
employee organization, with assets which exceed 10% of the
total of all assets in such pooled separate account (as
determined under PTCE 90-1) as of the date of the acquisition
of such Certificates;
(iv) the transferee is a bank and (A) the source of
funds used to purchase such Certificates is a "collective
investment fund" (as defined in PTCE 91-38), (B) the
conditions set forth in PTCE 91-38 have been satisfied and (C)
there is no Plan, the interests of which, together with the
interests of any other Plans maintained by the same employer
or employee organization, in the collective investment fund
exceed 10% of the total of all assets in the collective
investment fund (as determined under PTCE 91-38) as of the
date of acquisition of such Certificates;
(v) the transferee is a "qualified professional asset
manager" described in PTCE 84-14 and the conditions set forth
in PTCE 84-14 have been satisfied and will continue to be
satisfied; or
3
(vi) the transferee is an "in-house asset manager"
described in PTCE 96- 23 and the conditions set forth in PTCE
96-23 have been satisfied and will continue to be satisfied.
Very truly yours,
___________________________________
By:________________________________
Name:
Title:
EXHIBIT H
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ______________________ of
____________________________ (the "Owner") a corporation duly
organized and existing under the laws of ______________, the
record owner of New Century Home Equity Loan Trust, Series
0000-XXX, Xxxxx Backed Pass-Through Certificates, Class R (the
"Class R Certificates"), on behalf of whom I make this
affidavit and agreement. Capitalized terms used but not
defined herein have the respective meanings assigned thereto
in the Pooling and Servicing Agreement pursuant to which the
Class R Certificates were issued.
2. The Owner (i) is and will be a "Permitted Transferee"
as of ____________________, 199___ and (ii) is acquiring the
Class R Certificates for its own account or for the account of
another Owner from which it has received an affidavit in
substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified
organization" or a possession of the United States. For this
purpose, a "disqualified organization" means the United
States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to
tax and, except for the Federal Home Loan Mortgage
Corporation, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign
government, international organization or any agency or
instrumentality of such foreign government or organization,
any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that
is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be
imposed on transfers of the Class R Certificates to
disqualified organizations under the Internal Revenue Code of
1986 that applies to all transfers of the Class R Certificates
after March 31, 1988; (ii) that such tax would be on the
transferor or, if such transfer is through an agent (which
person includes a broker, nominee or middleman) for a
non-Permitted Transferee, on the agent; (iii) that the person
otherwise liable for the tax shall be relieved of liability
for the tax if the transferee furnishes to such person an
affidavit that the transferee is a Permitted Transferee and,
at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that each of
the Class R Certificates may be a "noneconomic residual
interest" within the meaning of proposed Treasury regulations
promulgated under the Code and that the transferor of a
"noneconomic residual interest" will remain liable for any
taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer is to
impede the assessment or collection of tax.
4. The Owner is aware of the tax imposed on a
"pass-through entity" holding the Class R Certificates if, at
any time during the taxable year of the pass-through entity, a
non-Permitted Transferee is the record holder of an interest
in such entity. (For this purpose, a "pass-through entity"
includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or
estate, and certain cooperatives.)
5. The Owner is aware that the Trustee will not register
the transfer of any Class R Certificate unless the transferee,
or the transferee's agent, delivers to the Trustee, among
other things, an affidavit in substantially the same form as
this affidavit. The Owner expressly agrees that it will not
consummate any such transfer if it knows or believes that any
of the representations contained in such affidavit and
agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of
counsel to constitute a reasonable arrangement to ensure that
the Class R Certificates will only be owned, directly or
indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is
___________________.
8. The Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of
Section 5.02(c) of the Pooling and Servicing Agreement under
which the Class R Certificates were issued (in particular,
clauses (iii)(A) and (iii)(B) of Section 5.02(c) which
authorize the Trustee to deliver payments to a person other
than the Owner and negotiate a mandatory sale by the Trustee
in the event that the Owner holds such Certificate in
violation of Section 5.02(c)); and that the Owner expressly
agrees to be bound by and to comply with such restrictions and
provisions.
9. The Owner is not acquiring and will not transfer the
Class R Certificates in order to impede the assessment or
collection of any tax.
10. The Owner anticipates that it will, so long as it
holds the Class R Certificates, have sufficient assets to pay
any taxes owed by the holder of such Class R Certificates, and
hereby represents to and for the benefit of the person from
whom it acquired the Class R Certificates that the Owner
intends to pay taxes associated with holding such Class R
Certificates as they become due, fully understanding that it
may incur tax liabilities in excess of any cash flows
generated by the Class R Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as
it holds the Class R Certificates.
12. The Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by
it so long as any of the Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates
with the intent to transfer the Class R Certificates to any
person or entity that will not have sufficient assets to
2
pay any taxes owed by the holder of such Class R Certificates,
or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain
outstanding.
14. The Owner will, in connection with any transfer that
it makes of the Class R Certificates, obtain from its
transferee the representations required by Section 5.02(c) of
the Pooling and Servicing Agreement under which the Class R
Certificate were issued and will not consummate any such
transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. The Owner will, in connection with any transfer that
it makes of the Class R Certificates, deliver to the Trustee
an affidavit, which represents and warrants that it is not
transferring the Class R Certificates to impede the assessment
or collection of any tax and that it has no actual knowledge
that the proposed transferee: (i) has insufficient assets to
pay any taxes owed by such transferee as holder of the Class R
Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Class R Certificates
remains outstanding; and (iii) is not a "Permitted
Transferee".
16. The Owner is a citizen or resident of the United
States, a corporation, partnership or other entity created or
organized in, or under the laws of, the United States or any
political subdivision thereof, or an estate or trust whose
income from sources without the United States may be included
in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or
business within the United States.
3
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 199___.
[OWNER]
By:_________________________________
Name:
Title: [Vice] President
ATTEST:
By:________________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named _______________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
____________________________
Notary Public
County of _____________________
State of ______________________
My Commission expires:
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss. :
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ____________________ of _____________________________ (the "Owner"), a
corporation duly organized and existing under the laws of ______________, on
behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R Certificates (the
"Residual Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trust Administrator a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit H. The Owner does not know or
believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement.
1
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 199___.
[OWNER]
By:_______________________________
Name:
Title: [Vice] President
ATTEST:
By:________________________________
Name:
Title: [Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and to
be a [Vice] President of the Owner, and acknowledged to me that [he/she]
executed the same as [his/her] free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
______________________________
Notary Public
County of _____________________
State of ______________________
My Commission expires:
EXHIBIT I
FORM OF WRITTEN ORDER TO AUTHENTICATE
[Date]
From: New Century Mortgage Securities, Inc.
00000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
To: U.S. Bank National Association
First Trust Center
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: New Century Home Equity Loan Trust Series 1999-NCB
Ladies and Gentlemen:
Pursuant to Section 5.01 of the Pooling and Servicing Agreement (the
"Agreement"), dated as of September 1, 1999, among New Century Mortgage
Corporation as master servicer, New Century Mortgage Securities, Inc. as
depositor, Firstar Bank Milwaukee, N.A. as trustee and U.S. Bank National
Association as trust administrator (the "Trust Administrator"), we hereby
authorize and direct you to execute, authenticate and deliver, in the manner
provided in the Agreement, Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6 and Class A-7 Certificates as follows:
1. Class A-1 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
2. Class A-2 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
3. Class A-3 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
4. Class A-4 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
5. Class A-5 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
6. Class A-6 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
7. Class A-7 Certificate No. 01:
Original Certificate
Principal Balance: $________
Registered in the name of: Cede & Co.
Deliver to: The Depository Trust Company
on the Closing Date
All capitalized terms not otherwise defined herein shall have the same
meanings as in the Agreement.
Sincerely,
NEW CENTURY MORTGAGE SECURITIES,
INC.
By:__________________________________
Name:
Title:
3
EXHIBIT J
FORM OF CERTIFICATE INSURANCE POLICY
FINANCIAL GUARANTY
INSURANCE POLICY
Trust: As described in Endorsement No. 1 Policy No.: 50860-N
Certificates: $418,656,653 New Century Home Date of Issuance: 9/28/99
Equity Loan Trust, Series 1999-NCB,
Class A-l, Class X-0, Xxxxx X-0,
Class X-0, Xxxxx, X-0, Class A-6
and Class A-7
FINANCIAL SECURITY ASSURANCE INC. ("Financial Security"), for
consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY GUARANTEES to the
Trustee for the benefit of each Holder, subject only to the terms of this Policy
(which includes each endorsement hereto), the full and complete payment of
Guaranteed Distributions with respect to the Certificates of the Trust referred
to above.
For the further protection of each Holder, Financial Security
irrevocably and unconditionally guarantees payment of the amount of any
distribution of principal or interest with respect to the Certificates made
during the Term of this Policy to such Holder that is subsequently avoided in
whole or in part as a preference payment under applicable law.
Payment of any amount required to be paid under this Policy will be
made following receipt by Financial Security of notice as described in
Endorsement No. 1 hereto.
Financial Security shall be subrogated to the rights of each Holder to
receive distributions with respect to each Certificate held by such Holder to
the extent of any payment by Financial Security hereunder.
Except to the extent expressly modified by Endorsement No. 1 hereto,
the following terms shall have the meanings specified for all purposes of this
Policy. "Holder" means the registered owner of any Certificate as indicated on
the registration books maintained by or on behalf of the Trustee for such
purpose or, if the Certificate is in bearer form, the holder of the Certificate.
"Trustee", "Guaranteed Distributions" and "Term of this Policy" shall have the
meanings set forth in Endorsement No. 1 hereto.
This Policy sets forth in full the undertaking of Financial Security,
and shall not be modified, altered or affected by any other agreement or
instrument, including any modification or amendment thereto. Except to the
extent expressly modified by an endorsement hereto, the premiums paid in respect
of this Policy are nonrefundable for any reason whatsoever. This Policy may not
be canceled or revoked during the Term of this Policy. An acceleration payment
shall not be due under this Policy unless such acceleration is at the sole
option of Financial Security. THIS POLICY IS NOT COVERED BY THE
PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.
In witness whereof, FINANCIAL SECURITY ASSURANCE INC. has caused this
Policy to be executed on its behalf by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By________________________________
AUTHORIZED OFFICER
A subsidiary of Financial Security Assurance Holdings Ltd.
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
1
ENDORSEMENT NO. 1 TO
FINANCIAL GUARANTY INSURANCE POLICY
FINANCIAL SECURITY ASSURANCE INC.
TRUST: Established pursuant to the Pooling and Servicing
Agreement dated as of September 1, 1999 among New Century
Mortgage Securities, Inc., as Depositor, New Century
Mortgage Corporation, as Servicer, NC Capital
Corporation, as Seller, Firstar Bank Milwaukee National
Association, as Trustee and U.S. Bank National
Association, as Trust Administrator
CERTIFICATES: $418,656,653 New Century Home Equity Loan Trust,
Series 0000-XXX, Xxxxx Backed Pass-Through
Certificates, Class X-0, X-0, X-0, X0, X-0,
A-6 and A-7
POLICY NO.: 50860-N
DATE OF ISSUANCE: September 28, 1999
1. DEFINITIONS. For all purposes of this Policy, the terms
specified below shall have the meanings or constructions
provided below. Capitalized terms used herein and not
otherwise defined herein shall have the meanings provided in
the Pooling and Servicing Agreement unless the context shall
otherwise require.
"BUSINESS DAY" means any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking institutions in the State of California, the State
of New York or in the cities in which the Corporate Trust Office of the Trustee
and the Trust Administrator are located, are authorized or obligated by law or
executive order to be closed.
"FINAL DISTRIBUTION DATE" means the Distribution Date coinciding with
or following a purchase by the Servicer in accordance with the terms of Section
10.01(b) of the Pooling and Servicing Agreement.
"GUARANTEED DISTRIBUTIONS" means, with respect to any Distribution
Date, the distribution to be made to the Certificates on such Distribution Date,
in an aggregate amount equal to the sum of (i) the aggregate of the Interest
Distribution Amounts and (ii) the amount by which the aggregate of the Class
Certificate Principal Balances exceeds the Aggregate Loan Balances of the
Mortgage Loans, in each case in accordance with the original terms of the
Certificates when issued and without regard to any amendment or modification of
the Certificates or the Pooling and Servicing Agreement which has not been
consented to by Financial Security. Guaranteed Distributions shall not include,
nor shall coverage be provided under this Policy in respect of any taxes,
withholding or other charge imposed by any governmental authority.
"MATURITY DATE" means the Distribution Date coinciding with or
following the final payment or other liquidation of the last Mortgage Loan or
REO Property as described in Section 10.01(a) of the Pooling and Servicing
Agreement, subject to the proviso set forth therein.
"POLICY" means this Financial Guaranty Insurance Policy and includes
each endorsement thereto.
"POOLING AND SERVICING AGREEMENT" means the Pooling and Servicing
Agreement dated as of September 1, 1999 among New Century Mortgage Securities,
Inc., New Century Mortgage Corporation, NC Capital Corporation, Firstar Bank
Milwaukee, N.A. and U.S. Bank National Association with respect to the New
Century Home Equity Loan Trust, Series 1999-NCB, as amended from time to time
with the consent
2
Policy No.: 50860-N Date of Issuance: September 28, 1999
of Financial Security.
"RECEIPT" and "RECEIVED" mean actual delivery to Financial Security and
to the Fiscal Agent (as defined below), if any, at or prior to 12:00 noon, New
York City time, on a Business Day; delivery either on a day that is not a
Business Day, or after 12:00 noon, New York City time, shall be deemed to be
Received on the next succeeding Business Day. If any notice or certificate given
hereunder by the Trust Administrator is not in proper form or is not properly
completed, executed or delivered, it shall be deemed not to have been Received,
and Financial Security or its Fiscal Agent shall promptly so advise the Trust
Administrator and the Trust Administrator may submit an amended notice.
"TERM OF THIS POLICY" means the period from and including the Date of
Issuance to and including the date on which (i) the Certificate Principal
Balance of all of the Certificates is zero. (ii) any period during which any
payment on the Certificates could have been avoided in whole or in part as a
preference payment under applicable bankruptcy, insolvency, receivership or
similar law has expired, and (iii) if any proceedings requisite to avoidance as
a preference payment have been commenced prior to the occurrence of (i) and
(ii), a final and nonappealable order in resolution of each such proceeding has
been entered.
"TRUST ADMINISTRATOR" means U.S. Bank National Association, in its
capacity as Trust Administrator under the Pooling and Servicing Agreement and
any successor in such capacity.
"TRUSTEE" means Firstar Bank Milwaukee, N.A., in its capacity as
Trustee under the Pooling and Servicing Agreement and any successor in such
capacity.
2. NOTICES AND CONDITIONS TO PAYMENT IN RESPECT OF
GUARANTEED DISTRIBUTIONS. Following Receipt by Financial
Security of a notice and certificate from the Trust
Administrator in the form attached as Exhibit A to this
Endorsement, Financial Security will pay any amount payable
hereunder in respect of Guaranteed Distributions out of the
funds of Financial Security on the later to occur of (a) 12:00
noon, New York City time, on the second Business Day following
such Receipt and (b) 12:00 noon, New York City time, on the
Distribution Date to which such claim relates. Payments due
hereunder in respect of Guaranteed Distributions will be
disbursed by wire transfer of immediately available funds to
the Policy Payments Account established pursuant to the
Pooling and Servicing Agreement or, if no such Policy Payments
Account has been established, to the Trust Administrator.
3
Policy No.: 50860-N Date of Issuance: September 28, 1999
Financial Security shall be entitled to pay any amount hereunder in
respect of Guaranteed Distributions whether or not any notice and certificate
shall have been Received by Financial Security as provided above, provided,
however, that by acceptance of this Policy the Trustee, and the Trust
Administrator on behalf of the Trustee, agree to provide upon request to
Financial Security a notice and certificate in respect of any such payments made
by Financial Security. Financial Security's obligations hereunder in respect of
Guaranteed Distributions shall be discharged to the extent funds are disbursed
by Financial Security as provided herein whether or not such funds are properly
applied by the Trust Administrator.
3. NOTICES AND CONDITIONS TO PAYMENT IN RESPECT OF
GUARANTEED DISTRIBUTIONS AVOIDED AS PREFERENCE PAYMENTS. If
any Guaranteed Distribution is avoided as a preference payment
under applicable bankruptcy, insolvency, receivership or
similar law, Financial Security will pay such amount out of
the funds of Financial Security on the later of (a) the date
when due to be paid pursuant to the Order referred to below or
(b) the first to occur of (i) the fourth Business Day
following Receipt by Financial Security from the Trustee of
(A) a certified copy of the order of the court or other
governmental body which exercised jurisdiction to the effect
that the Holder is required to return principal or interest
distributed with respect to the Certificates during the Term
of this Policy because such distributions were avoidable as
preference payments under applicable bankruptcy law (the
"Order"), (B) a certificate of the Holder that the Order has
been entered and is not subject to any stay and (C) an
assignment duly executed and delivered by the Holder, in such
form as is reasonably required by Financial Security and
provided to the Holder by Financial Security, irrevocably
assigning to Financial Security all rights and claims of the
Holder relating to or arising under the Certificates against
the debtor which made such preference payment or otherwise
with respect to such preference payment or (ii) the date of
Receipt by Financial Security from the Trust Administrator of
the items referred to in clauses (A), (B) and (C) above if, at
least four Business Days prior to such date of Receipt,
Financial Security shall have Received written notice from the
Trust Administrator that such items were to be delivered on
such date and such date was specified in such notice. Such
payment shall be disbursed to the receiver, conservator,
debtor-in- possession or trustee in bankruptcy named in the
Order and not to the Trustee, the Trust Administrator or any
Holder directly (unless a Holder has previously paid such
amount to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order, in which case such
payment shall be disbursed to the Trust Administrator for
distribution to such Holder upon proof of such payment
reasonably satisfactory to Financial Security). In connection
with the foregoing, Financial Security shall have the rights
provided pursuant to Sections 4.02(d), 4.02(f) and 9.04 of the
Pooling and Servicing Agreement.
4. GOVERNING LAW. This Policy shall be governed by and
construed in accordance with the laws of the State of New
York, without giving effect to the conflict of laws principles
thereof.
5. FISCAL AGENT. At any time during the Term of this
Policy, Financial Security may appoint a fiscal agent (the
"Fiscal Agent") for purposes of this Policy by written notice
to the Trust Administrator at the notice address specified in
the Pooling and Servicing Agreement specifying the name and
notice address of the Fiscal Agent. From and after the date of
receipt of such notice by the Trust Administrator, (i) copies
of all notices and documents required to be delivered to
Financial Security pursuant to this Policy shall be
simultaneously delivered to the Fiscal Agent and to Financial
Security and shall not be deemed Received until Received by
both and (ii) all payments required to be made by Financial
Security under this Policy may be made directly by Financial
Security or by the Fiscal Agent on behalf of Financial
Security.
4
Policy No.: 50860-N Date of Issuance: September 28, 1999
The Fiscal Agent is the agent of Financial Security only and
the Fiscal Agent shall in no event be liable to any Holder for
any acts of the Fiscal Agent or any failure of Financial
Security to deposit, or cause to be deposited, sufficient
funds to make payments due under this Policy.
6. WAIVER OF DEFENSES. To the fullest extent permitted
by applicable law, Financial Security agrees not to assert,
and hereby waives, for the benefit of each Holder, all rights
(whether by counterclaim, setoff or otherwise) and defenses
(including, without limitation, the defense of fraud), whether
acquired by subrogation, assignment or otherwise, to the
extent that such rights and defenses may be available to
Financial Security to avoid payment of its obligations under
this Policy in accordance with the express provisions of this
Policy.
7. NOTICES. Alt notices to be given hereunder shall be
in writing (except as otherwise specifically provided herein)
and shall be mailed by registered mail or personally delivered
or telecopied to Financial Security as follows:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Senior Vice President - Surveillance
Re: New Century Home Equity Loan Trust,
Series 1999-NCB
Telecopy No.: (000) 000-0000
Confirmation: (000) 000-0000
Financial Security may specify a different address or addresses by writing,
mailed or delivered to the Trust Administrator.
8. PRIORITIES. In the event any term or provision on the
face of this Policy is inconsistent with the provisions of
this Endorsement, the provisions of this Endorsement shall
take precedence and shall be binding.
9. EXCLUSIONS FROM INSURANCE GUARANTY FUNDS. This Policy
is not covered by the Property/Casualty Insurance Security
Fund specified in Article 76 of the New York Insurance Law.
This Policy is not covered by the Florida Insurance Guaranty
Association created under Part II of Chapter 631 of the
Florida Insurance Code. In the event Financial Security were
to become insolvent, any claims arising under this Policy are
excluded from coverage by the California Insurance Guaranty
Association, established pursuant to Article 14.2 of Chapter 1
of Part 2 of Division 1 of the California Insurance Code.
10. SURRENDER OF POLICY. The Trustee shall surrender this
Policy to Financial Security for cancellation upon expiration
of the Term of this Policy.
5
Policy No.: 50860-N Date of Issuance: September 28, 1999
IN WITNESS WHEREOF, FINANCIAL SECURITY ASSURANCE INC. has caused this
Endorsement No. 1 to be executed by its Authorized Officer.
FINANCIAL SECURITY ASSURANCE INC.
By: ________________________________
Authorized Officer
6
Policy No.: 50860-N Date of Issuance: September 28, 1999
Exhibit A
To Endorsement 1
NOTICE OF CLAIM AND CERTIFICATE
-------------------------------
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
The undersigned, a duly authorized officer of U.S. Bank National
Association (the "Trust Administrator"), hereby certifies to Financial Security
Assurance Inc. ("Financial Security") with reference to Financial Guaranty
Insurance Policy No. 50860-N dated September 28, 1999 (the "Policy") issued by
Financial Security in respect of the New Century Home Equity Loan Trust, Series
0000-XXX, Xxxxx Backed Pass-Through Certificates, Class X-x, X-0, X-0, X-0, X-0,
X-0 and A-7 (collectively, the "Certificates"), that:
(i) The Trust Administrator is the Trust Administrator under
the Pooling and Servicing Agreement for the Holders.
(ii) The sum of all amounts on deposit (or scheduled to be on
deposit) in the Distribution Account and available for distribution to
the Holders of the Guaranteed Distributions pursuant to the Pooling and
Servicing Agreement will be $______ (the "Shortfall") less than the
Guaranteed Distributions with respect to the Distribution Date
occurring on _______________.
(iii) The Trust Administrator is making a claim under the
Policy for the Shortfall to be applied to distributions of principal or
interest or both with respect to the Certificates.
(iv) The Trust Administrator agrees that, following receipt of
funds from Financial Security, it shall (a) hold such amounts in trust
and apply the same directly to the payment of Guaranteed Distributions
on the Certificates when due; (b) not apply such funds for any other
purpose; (c) not commingle such funds with other funds held by the
Trust Administrator and (d) maintain an accurate record of such
payments with respect to each Certificate and the corresponding claim
on the Policy and proceeds thereof and, if the Certificate is required
to be surrendered for such payment, shall stamp on each such
Certificate the legend "$[INSERT APPLICABLE AMOUNT] paid by Financial
Security and the balance hereof has been canceled and reissued" and
then shall deliver such Certificate to Financial Security.
(v) The Trust Administrator, on behalf of the Trustee and the
Holders, hereby assigns to Financial Security the rights of the Holders
with respect to the Certificates to the extent of any payments under
the Policy, including, without limitation, any amounts due to the
Holders in respect of securities law violations arising from the offer
and sale of the Certificates. The foregoing assignment is in addition
to, and not in limitation of, rights of subrogation otherwise available
to Financial Security in respect of such payments. The Trust
Administrator shall take such action and deliver such instruments as
may be reasonably requested or required by Financial Security to
effectuate the purpose or provisions of this clause (v).
(vi) The Trust Administrator, on its behalf and on behalf of
the Trustee and the Holders, hereby appoints Financial Security as
agent and attorney-in-fact for the Trust Administrator, the Trustee and
each such Holder in any legal proceeding with respect to the
Certificates. The Trust Administrator hereby agrees, for itself and on
behalf of the Trustee, that, so long as a Certificate
A-1
Policy No.: 50860-N Date of Issuance: September 28, 1999
Insurer Default (as defined in the Pooling and Servicing Agreement)
shall not exist, Financial Security may at any time during the
continuation of any proceeding by or against the Seller, the Servicer
or the Depositor under the United States Bankruptcy Code or any other
applicable bankruptcy, insolvency, receivership, rehabilitation or
similar law (an "Insolvency Proceeding") direct all matters relating to
such Insolvency Proceeding. In addition, the Trust Administrator, for
itself and on behalf of the Trustee, hereby agrees that Financial
Security shall be subrogated to, and the Trustee on its behalf and on
behalf of the Trustee and each Holder, hereby delegates and assigns, to
the fullest extent permitted by law, the rights of the Trustee, Trust
Administrator and each Holder in the conduct of any Insolvency
Proceeding, including, without limitation, all rights of any party to
an adversary proceeding or action with respect to any court order
issued in connection with any such Insolvency Proceeding.
(vii) Payment should be made by wire transfer directed to
Policy Payments Account.
Unless the context otherwise requires, capitalized terms used in this
Notice of Claim and Certificate and not defined herein shall have the meanings
provided in the Policy.
A-2
Policy No.: 50860-N Date of Issuance: September 28, 1999
IN WITNESS WHEREOF, the Trust Administrator has executed and delivered
this Notice of Claim and Certificate as of the _______ day of _________________,
____.
FIRSTAR BANK MILWAUKEE, N.A.
By: ________________________
Title: _______________________
--------------------------------------------------------------------------------
For Financial Security or Fiscal Agent Use Only
Wire transfer sent on _______________ by ____________________
Confirmation Number ________________________
A-3
Policy No.: 50860-N Date of Issuance: September 28, 1999
EXHIBIT K
MORTGAGE LOAN SCHEDULE
