EXECUTION COPY
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AAMES CAPITAL CORPORATION
as Seller,
COUNTRYWIDE HOME LOANS, INC.
as Servicer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee
POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2000
Aames Mortgage Trust 2000-1
Mortgage Pass-Through Certificates,
Series 2000-1
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1.01. Definitions...................................................................................1
Section 1.02 Interest Calculations........................................................................39
Section 1.03 Determination of Material Adverse Effect.....................................................39
ARTICLE II CONVEYANCE OF THE TRUST ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of the Trust......................................................................40
Section 2.02 Conveyance of the Subsequent Mortgage Loans; Fixed Price Contract............................42
Section 2.03 Acceptance by the Trustee; Repurchase or Substitution of Mortgage Loans......................46
Section 2.04 Representations and Warranties Regarding the Servicer and the Seller.........................48
Section 2.05 Representations and Warranties of the Seller Regarding the Mortgage Loans....................51
Section 2.06 Execution and Authentication of Certificates.................................................62
Section 2.07 Reserved.....................................................................................63
Section 2.08 Indemnification of the Trust.................................................................63
ARTICLE IIIADMINISTRATION AND SERVICING OF MORTGAGE LOANS;
CERTIFICATE ACCOUNT
Section 3.01 The Servicer and the Sub-Servicers...........................................................63
Section 3.02 Collection of Certain Mortgage Loan Payments; Collection Account and Certificate
Account......................................................................................65
Section 3.03 Additional Servicing Responsibilities for the Adjustable Rate Mortgage Loans.................68
Section 3.04 Hazard Insurance Policies....................................................................68
Section 3.05 Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements...................69
Section 3.06 Realization upon Liquidated Mortgage Loans...................................................69
Section 3.07 Trustee to Cooperate; Release of Mortgage Files..............................................71
Section 3.08 Servicing Compensation; Payment of Certain Expenses by the Servicer..........................72
Section 3.09 Annual Statement as to Compliance............................................................72
Section 3.10 Annual Independent Public Accountants' Servicing Report......................................73
Section 3.11 Access to Certain Documentation and Information Regarding the Mortgage Loans.................73
Section 3.12 Maintenance of Fidelity Bond and Errors and Omissions Policy.................................74
Section 3.13 Notices to the Rating Agencies, the Trustee and the Certificate Insurer......................74
Section 3.14 Reports of Foreclosures and Abandonment of Mortgaged Properties..............................74
Section 3.15 Sub-Servicers and Sub-Servicing Agreements...................................................74
Section 3.16 Prefunding Account...........................................................................75
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Section 3.17 Capitalized Interest Account.................................................................76
Section 3.18 Payments on the Certificate Insurance Policy.................................................77
Section 3.19 Rights of the Certificate Insurer to Exercise Rights of Offered Certificateholders...........79
Section 3.20 Trust and Accounts Held for Benefit of the Certificate Insurer...............................79
Section 3.21 Supplemental Interest Reserve Fund...........................................................80
Section 3.22 Covenants and Representations of the Servicer Regarding Prepayment Charges...................80
Section 3.23 Claims Upon the PMI Policy...................................................................81
ARTICLE IV REMITTANCE REPORT
Section 4.01 Servicer Remittance Report...................................................................81
Section 4.02 Trustee Distribution Date Statement..........................................................82
ARTICLE V PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01 Distributions................................................................................83
Section 5.02 Monthly Advances; Servicing Advances.........................................................87
Section 5.03 Statements to Certificateholders.............................................................89
Section 5.04 The Certificate Insurer; Use of Information..................................................91
ARTICLE VI THE CERTIFICATES
Section 6.01 The Certificates.............................................................................92
Section 6.02 Registration of Transfer and Exchange of Certificates........................................92
Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates............................................97
Section 6.04 Persons Deemed Owners........................................................................97
Section 6.05 Actions of Certificateholders................................................................97
ARTICLE VII THE SERVICER AND THE SELLER
Section 7.01 Liability of the Seller and the Servicer.....................................................98
Section 7.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer................98
Section 7.03 Limitation on Liability of the Servicer and Others...........................................98
Section 7.04 Servicer Not to Resign.......................................................................99
Section 7.05 Merger or Consolidation of the Seller.......................................................100
ARTICLE VIII DEFAULT
Section 8.01 Events of Default...........................................................................101
Section 8.01A Retention and Termination of Servicer.......................................................102
Section 8.02 Trustee to Act; Appointment of Successor....................................................103
Section 8.03 Notifications to Certificateholders.........................................................104
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Section 8.04 Assumption or Termination of Sub-Servicing Agreements by the Trustee or any
Successor Servicer..........................................................................104
Section 8.05 Reserved....................................................................................105
ARTICLE IX THE TRUSTEE
Section 9.01 Duties of the Trustee.......................................................................105
Section 9.02 Certain Matters Affecting the Trustee.......................................................106
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans.......................................107
Section 9.04 Trustee May Own Certificates................................................................108
Section 9.05 Payment of the Trustee's Fees and Expenses..................................................108
Section 9.06 Eligibility Requirements for the Trustee....................................................108
Section 9.07 Resignation or Removal of the Trustee.......................................................109
Section 9.08 Successor Trustee...........................................................................110
Section 9.09 Merger or Consolidation of the Trustee......................................................110
Section 9.10 Appointment of Co-Trustee or Separate Trustee...............................................110
Section 9.11 Compliance with REMIC Provisions............................................................112
Section 9.12 Trustee May Enforce Claims Without Possession of Certificates...............................112
Section 9.13 Exercise of Trustee Powers by Certificate Insurer and Certificateholders....................113
Section 9.14 Tax Returns.................................................................................113
Section 9.15 Taxpayer Identification Number..............................................................113
Section 9.16 Miscellaneous REMIC Matters.................................................................113
ARTICLE X TERMINATION
Section 10.01 Termination Upon Purchase or Liquidation of All Mortgage Loans..............................119
Section 10.02 Additional Termination Requirements.........................................................121
ARTICLE XI MISCELLANEOUS PROVISIONS
Section 11.01 Amendment...................................................................................122
Section 11.02 Recordation of Agreement....................................................................123
Section 11.03 Limitation on Rights of Certificateholders..................................................123
Section 11.04 Governing Law...............................................................................124
Section 11.05 Notices.....................................................................................124
Section 11.06 Severability of Provisions..................................................................125
Section 11.07 Assignment..................................................................................125
Section 11.08 Certificates Nonassessable and Fully Paid...................................................125
Section 11.09 Third Party Beneficiary; Rating.............................................................125
Section 11.10 Counterparts................................................................................126
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SCHEDULES AND EXHIBITS
Schedule I List of Sub-Servicers
Schedule II [Reserved]
Schedule III Schedule of Restricted Mortgage Loans
Exhibit A-1 Form of Fixed Rate Group Certificate
Exhibit A-2 Form of Class A-V1 Certificate
Exhibit A-3 Form of Class A-V2 Certificate
Exhibit B-1 Form of Class C Certificate
Exhibit B-2 Form of Class R-I Certificate
Exhibit B-3 Form of Class P Certificate
Exhibit C Form of Subsequent Transfer Agreement
Exhibit D Certificate Insurance Policy
Exhibit E Mortgage Loan Schedule
Exhibit F Form of Annual Statement as to Compliance
Exhibit G Form of Transfer Affidavit
Exhibit H Form of Payoff Notice
Exhibit I Form of Liquidation Report
Exhibit J Form of Officer's Certificate as to Charge-offs
Exhibit K Form of Transferor Affidavit
Exhibit L Insurance and Indemnity Agreement and Indemnification Agreement
Exhibit M Form of Transferor Letter
Exhibit N-1 Form of Investment Letter [Non-Rule 144A]
Exhibit N-2 Form of Rule 144A Letter
Exhibit O [Reserved]
Exhibit P List of PMI Mortgage Loans
Exhibit Q Subsequent Mortgage Loan Criteria
Exhibit R Prepayment Charge Schedule
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THIS POOLING AND SERVICING AGREEMENT (this "Agreement"), dated as of
September 1, 2000, between Aames Capital Corporation, as seller (in such
capacity, the "Seller") Countrywide Home Loans, Inc., as servicer (the
"Servicer") and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article.
Accrued Certificate Interest: With respect to any Class and
Distribution Date, means the amount of interest due for any Class of
Certificates in respect of any Interest Period at the applicable Pass-Through
Rate, less the related pro rata share of Interest Shortfalls (but in the case of
the Class A-V1 and Class A-V2 Certificates, without consideration of the
Supplemental Interest Amount). All calculations of interest on the Fixed Rate
Certificates will be made on the basis of a 360-day year assumed to consist of
twelve 30-day months, and all calculations of interest on the Class A-V1 and
Class A-V2 Certificates will be made on the basis of the actual number days
elapsed in the related Interest Period and a year of 360 days.
Addition Notice: With respect to the transfer of Subsequent Mortgage
Loans to the Trust pursuant to Section 2.02 of this Agreement, notice of the
Seller's designation of Subsequent Mortgage Loans to be sold to the Trust
separated by Mortgage Loan Group and the aggregate Subsequent Cut-off Date
Principal Balance of such Subsequent Mortgage Loans in each Mortgage Loan Group,
which notice shall be given to the Trustee and to the Certificate Insurer not
later than one Business Day prior to the related Subsequent Transfer Date.
Adjustable Rate Group I: The group of Initial Mortgage Loans comprised
of adjustable rate mortgage loans having agency-conforming balances identified
in the Mortgage Loan Schedule as having been assigned to Adjustable Rate Group I
and any Subsequent Mortgage Loans identified in a Subsequent Transfer Agreement
as having been assigned to Adjustable Rate Group I, including any Qualified
Replacement Mortgage Loans delivered in replacement thereof.
Adjustable Rate Group I Available Funds Cap: With respect to any
Distribution Date and the Class A-V1 Certificates, the per annum rate equal to
the lesser of (A) the percentage obtained by dividing (x) the amount of interest
that accrued with respect to the Class LT-AV1 and Class LT-MV1 REMIC I Regular
Interests with respect to the related Interest Period at the related
Pass-Through Rates, where, after the 12th Distribution Date, the Pass-Through
Rate of the Class LT-MV1 REMIC I Regular Interest is first reduced by 0.50%, by
(y) the product of (i) the
Adjustable Rate Group I Balance as of the first day of such Interest Period,
(ii) the actual number of days elapsed during such Interest Period divided by
360 and (B) 14%.
Adjustable Rate Group I Balance: As to any Distribution Date, the sum
of the aggregate of the Principal Balances of the Mortgage Loans in Adjustable
Rate Group I as of the end of the related Collection Period plus, in the case of
any Distribution Date relating to a Collection Period that includes any part of
the Funding Period, any portion of the related allocated Prefunding Account
Deposit remaining on deposit in the Prefunding Account or Certificate Account as
of the last day of such Collection Period.
Adjustable Rate Group I Certificate Principal Balance: As to any
Distribution Date, the Class A-V1 Certificate Principal Balance.
Adjustable Rate Group I Certificates: The Class A-V1 Certificates.
Adjustable Rate Group I Principal Distribution Amount: With respect to
any Distribution Date, the Principal Distribution Amount with respect to
Adjustable Rate Group I Certificates and the related Collection Period.
Adjustable Rate Group II: The group of Initial Mortgage Loans comprised
of adjustable rate mortgage loans identified in the Mortgage Loan Schedule as
having been assigned to Adjustable Rate Group II and any Subsequent Mortgage
Loans identified in a Subsequent Transfer Agreement as having been assigned to
Adjustable Rate Group II, including any Qualified Replacement Mortgage Loans
delivered in replacement thereof.
Adjustable Rate Group II Available Funds Cap: With respect to any
Distribution Date and the Class A-V2 Certificates, the per annum rate equal to
the lesser of (A) the percentage obtained by dividing (x) the amount of interest
that accrued with respect to the Class LT-AV2 and Class LT-MV2 REMIC I Regular
Interests with respect to the related Interest Period at the related
Pass-Through Rates, where, after the 12th Distribution Date, the Pass-Through
Rate of the Class LT-MV2 REMIC I Regular Interest is first reduced by 0.50%, by
(y) the product of (i) the Adjustable Rate Group II Balance as of the first day
of such Interest Period, (ii) the actual number of days elapsed during such
Interest Period divided by 360 and (B) 14%.
Adjustable Rate Group II Balance: As to any Distribution Date, the sum
of the aggregate of the Principal Balances of the Mortgage Loans in Adjustable
Rate Group II as of the end of the related Collection Period plus, in the case
of any Distribution Date relating to a Collection Period that includes any part
of the Funding Period, any portion of the related allocated Prefunding Account
Deposit remaining on deposit in the Prefunding Account or Certificate Account as
of the last day of such Collection Period.
Adjustable Rate Group II Certificate Principal Balance: As to any
Distribution Date, the Class A-V2 Certificate Principal Balance.
Adjustable Rate Group II Certificates: The Class A-V2 Certificates.
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Adjustable Rate Group II Principal Distribution Amount: With respect to
any Distribution Date, the Principal Distribution Amount with respect to
Adjustable Rate Group II Certificates and the related Collection Period.
Adjustable Rate Mortgage Loan: Any Mortgage Loan with a Mortgage Loan
Rate that is adjustable at regular periodic intervals, based on the Index plus
the related Gross Margin subject to any Minimum Rate, Maximum Rate and any
periodic limitations on adjustment from time to time, all as set forth in the
Mortgage Loan Schedule. All Adjustable Rate Mortgage Loans will be included in
either Adjustable Rate Group I or Adjustable Rate Group II.
Adjustable Rate I Turbo Amount: As defined in Section 9.16.
Adjustable Rate II Turbo Amount: As defined in Section 9.16.
Adjustment Date: With respect to any Adjustable Rate Mortgage Loan, the
date on which a change to the Mortgage Loan Rate on a Mortgage Loan becomes
effective.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings corresponding to the foregoing.
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 Pool Balance and the
aggregate of the principal balances of any REO Properties as of the first day of
the twelfth preceding calendar month.
Annual Statement of Compliance: The annual statement to be prepared and
delivered by the Servicer in accordance with Section 3.09.
Appraised Value: The appraised value of any Mortgaged Property based
upon the appraisal made at the time of origination of the related Mortgage Loan
or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the
sales price of the related Mortgaged Property if such sales price is less than
such appraised value.
Available Funds: With respect to any Mortgage Loan Group and any
Distribution Date, the sum, without duplication of the following amounts with
respect to the Mortgage Loans in such Mortgage Loan Group and the immediately
preceding Collection Period:
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(i) scheduled and unscheduled payments of principal and
interest on the Mortgage Loans received by the Servicer, including
amounts deposited in respect of the Closing Date Deposit (net of
amounts representing the Monthly Servicing Fee with respect to each
Mortgage Loan to the extent previously paid to the Servicer and
reimbursement for Monthly Advances and Servicing Advances);
(ii) Net Liquidation Proceeds and Trust Insurance Proceeds
with respect to the Mortgage Loans (net of amounts applied to the
restoration or repair of a Mortgaged Property);
(iii) amounts payable in connection with each such Mortgage
Loan that was repurchased from the Trust, and all amounts payable in
respect any Mortgage Loan in the related Mortgage Loan Group in
connection with a substitution of a Qualified Replacement Mortgage Loan
therefor;
(iv) payments from the Servicer in connection with (a) Monthly
Advances and (b) Compensating Interest, and payments in connection with
the termination of the Trust with respect to the Mortgage Loans as
provided in this Agreement;
(v) on the Distribution Dates during and immediately following
the Funding Period, amounts from the Capitalized Interest Account for
the payment of interest on the Certificates of the related Certificate
Group; and
(vi) on the Distribution Date at or immediately following the
end of the Funding Period, amounts remaining on deposit in the
Prefunding Account with respect to the related Mortgage Loan Group.
Available Funds Shortfall: With respect to any Mortgage Loan Group and
any Distribution Date, the excess, if any, of (x) the aggregate of the amounts
required to be distributed pursuant to clauses (1) through (4) of Section
5.01(b), over (y) the Available Funds for such Mortgage Loan Group and
Distribution Date.
Basic Principal Amount: With respect to any Mortgage Loan Group and any
Distribution Date, an amount equal to the sum of the following amounts (without
duplication) with respect to the Mortgage Loans in such Mortgage Loan Group and
the immediately preceding Collection Period:
(i) each payment of principal on a Mortgage Loan received by
the Servicer during such Collection Period, including all full and
partial principal prepayments;
(ii) the Net Liquidation Proceeds and Trust Insurance Proceeds
allocable to principal received by the Servicer with respect to any
Mortgage Loan during such Collection Period;
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(iii) all amounts allocable to principal payable in connection
with each such Mortgage Loan that was repurchased from the Trust during
such Collection Period, and all amounts allocable to principal payable
in respect any Mortgage Loan in the related Mortgage Loan Group in
connection with a substitution of a Qualified Replacement Mortgage Loan
therefor; and
(iv) any related amounts remaining in the Prefunding Account
with respect to the related Mortgage Loan Group after the Funding
Period.
Bloomberg: The on-line computer based information network maintained by
Bloomberg L.P., or any successor thereto.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee, ownership of which is reflected on the books of the
Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository). As of the Closing Date, only the Offered Certificates
constitute Book-Entry Certificates.
Book-Entry Nominee: As defined in Section 6.02(b).
Business Day: Any day other than (a) a Saturday or a Sunday or (b) a
day on which banking institutions in the State of California or the State of New
York are required or authorized by law, executive order or governmental decree
to be closed.
Capitalized Interest Account: Not applicable.
Capitalized Interest Account Deposit: $0.
Capitalized Interest Requirement: Not applicable.
Certificate: Any Class A-1F, Class A-2F, Class A-3F, Class X-0X, Xxxxx
X-0X, Xxxxx X-0X, Class A-V1, Class A-V2, Class C, Class P or Class R
Certificate issued pursuant to this Agreement.
Certificate Account: The segregated account, which shall be an Eligible
Account, established and maintained pursuant to Section 3.02(e) and entitled
"Bankers Trust Company of California, N.A., as Trustee for Aames Mortgage Trust
2000-1 Mortgage Pass-Through Certificates, Series 2000-1, Certificate Account".
Certificate Group: The Fixed Rate Group Certificates, the Adjustable
Rate Group I Certificates or the Adjustable Rate Group II Certificates, as
applicable.
Certificateholder: The Person in whose name a Certificate is registered
in the Certificate Register, except that, solely for the purpose of taking any
action under Article Eight or giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller or the
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Servicer or any Person actually known to a Responsible Officer of the Trustee to
be an Affiliate of the Seller or the Servicer shall be deemed not to be
outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether Holders of the requisite Percentage
Interests necessary to take any such action or effect any such consent have
acted or consented unless the Seller, the Servicer or any such Person is an
owner of record of all of the Certificates.
Certificate Insurance Policy: The Certificate Insurance Policy (No.
50978-N) dated September 21, 2000, issued by the Certificate Insurer for the
benefit of the Holders of the Offered Certificates, pursuant to which the
Certificate Insurer guarantees payment of Insured Payments. A copy of the
Certificate Insurance Policy is attached hereto as Exhibit D.
Certificate Insurer: Financial Security Assurance Inc., a stock
insurance company organized and created under the laws of the State of New York,
and any successors thereto.
Certificate Insurer Default: The existence and continuance of any of
the following:
(a) the Certificate Insurer fails to make a payment required
under the Certificate Insurance Policy in accordance with its terms;
(b) the Certificate Insurer (i) files any petition or
commences any case or proceeding under any state or federal law
relating to insolvency or bankruptcy, (ii) consents to the entry of any
decree or order for relief in an involuntary case or proceeding under
any state or federal bankruptcy or insolvency law, (iii) makes a
general assignment for the benefit of its creditors or (iv) admits in
writing its inability to pay its debts as they come due; or
(c) a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory agency enters an order,
judgment or decree under any state or federal bankruptcy or insolvency
law which has continued in effect and unstayed for a period of 60 or
more consecutive days (i) appointing a custodian, trustee, agent or
receiver for the Certificate Insurer or for all or any material portion
of its property or (ii) authorizing the taking of possession by a
custodian, trustee, agent or receiver of the Certificate Insurer or the
taking of possession of all or any material portion of its property.
Certificate Insurer Parties: The Certificate Insurer or its respective
agents, representatives, directors, officers or employees.
Certificate Insurer Premium: With respect to the Fixed Rate Group
Certificates, the premium due to the Certificate Insurer on each Distribution
Date, which amount shall be equal to 1/12 of the product of the applicable
Insurer Premium Rate and the Fixed Rate Group Certificate Principal Balance
immediately prior to such Distribution Date. With respect to the Adjustable Rate
Group I Certificates, the premium due to the Certificate Insurer on each
Distribution Date, which amount shall be equal to 1/12 of the product of the
applicable Insurer Premium Rate and
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the Adjustable Rate Group I Certificate Principal Balance immediately prior to
such Distribution Date. With respect to the Adjustable Rate Group II
Certificates, the premium due to the Certificate Insurer on each Distribution
Date, which amount shall be equal to 1/12 of the product of the applicable
Insurer Premium Rate and the Adjustable Rate Group II Certificate Principal
Balance immediately prior to such Distribution Date. The Certificate Insurer
Premium shall also include any premium supplement for a Certificate Group
imposed under the Insurance Agreement.
Certificate Owner: With respect to any Book-Entry Certificate, the
Person who is the beneficial owner thereof.
Certificate Principal Balance: With respect to the Class A-1F
Certificates, the Class A-1F Certificate Principal Balance; with respect to the
Class A-2F Certificates, the Class A-2F Certificate Principal Balance; with
respect to the Class A-3F Certificates, the Class A-3F Certificate Principal
Balance; with respect to the Class A-4F Certificates, the Class A-4F Certificate
Principal Balance; with respect to the Class A-5F Certificates, the Class A-5F
Certificate Principal Balance; with respect to the Class A-6F Certificates, the
Class A-6F Certificate Principal Balance; with respect to the Class A-V1
Certificates, the Class A-V1 Certificate Principal Balance; with respect to the
Class A-V2 Certificates, the Class A-V2 Principal Balance; and with respect to
the Class C Certificates, the Class C Certificate Principal Balance; and with
respect to the Class P Certificates, the Class P Certificate Principal Balance.
Certificate Register: The register maintained pursuant to Section 6.02.
Class: The Fixed Rate Group Certificates, the Adjustable Rate Group I
Certificates, the Adjustable Rate Group II Certificates, the Class C
Certificate, the Class P Certificate, the Class R-I Certificate or the Class
R-II Certificate, as the case may be, taken as a whole.
Class A-1F Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-1 hereto. The Class A-1F Certificates are a subclass of the Fixed Rate
Group Certificates.
Class A-1F Certificate Principal Balance: As to any Distribution Date,
the Original Class A-1F Certificate Principal Balance less the Fixed Rate Group
Principal Distribution Amounts actually distributed to the holders of the Class
A-1F Certificates on previous Distribution Dates.
Class A-1F Pass-Through Rate: 7.69% per annum.
Class A-2F Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-1 hereto. The Class A-2F Certificates are a subclass of the Fixed Rate
Group Certificates.
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Class A-2F Certificate Principal Balance: As to any Distribution Date,
the Original Class A-2F Certificate Principal Balance less the Fixed Rate Group
Principal Distribution Amounts actually distributed to the holders of the Class
A-2F Certificates on previous Distribution Dates.
Class A-2F Pass-Through Rate: 7.48% per annum.
Class A-3F Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-1 hereto. The Class A-3F Certificates are a subclass of the Fixed Rate
Group Certificates.
Class A-3F Certificate Principal Balance: As to any Distribution Date,
the Original Class A-3F Certificate Principal Balance less the Fixed Rate Group
Principal Distribution Amounts actually distributed to the holders of the Class
A-3F Certificates on previous Distribution Dates.
Class A-3F Pass-Through Rate: 7.54% per annum.
Class A-4F Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-1 hereto. The Class A-4F Certificates are a subclass of the Fixed Rate
Group Certificates.
Class A-4F Certificate Principal Balance: As to any Distribution Date,
the Original Class A-4F Certificate Principal Balance less the Fixed Rate Group
Principal Distribution Amounts actually distributed to the holders of the Class
A-4F Certificates on previous Distribution Dates.
Class A-4F Pass-Through Rate: 7.76% per annum.
Class A-5F Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-1 hereto. The Class A-5F Certificates are a subclass of the Fixed Rate
Group Certificates.
Class A-5F Certificate Principal Balance: As to any Distribution Date,
the Original Class A-5F Certificate Principal Balance less the Fixed Rate Group
Principal Distribution Amounts actually distributed to the holders of the Class
A-5F Certificates on previous Distribution Dates.
Class A-5F Pass-Through Rate: The lesser of (x) with respect to each
Interest Period ending on or prior to the Clean-Up Call Date, 8.07%, and for
each Interest Period thereafter, 8.57% and (y) the Fixed Rate Group Available
Funds Cap.
Class A-6F Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-1 hereto. The Class A-6F Certificates are a subclass of the Fixed Rate
Group Certificates.
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Class A-6F Certificate Principal Balance: As to any Distribution Date,
the Original Class A-6F Certificate Principal Balance less the Fixed Rate Group
Principal Distribution Amounts actually distributed to the holders of the Class
A-6F Certificates on previous Distribution Dates.
Class A-6F Lockout Distribution Amount: As to any Distribution Date,
the product of (i) the applicable Class A-6F Lockout Percentage for such
Distribution Date, and (ii) the Class A-6F Lockout Pro Rata Distribution Amount
for such Distribution Date, not to exceed the Fixed Rate Group Principal
Distribution Amount for such Distribution Date.
Class A-6F Lockout Percentage: As to any Distribution Date, as follows:
Distribution Dates Lockout Percentage
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October 2000 - September 2003 0%
October 2003 - September 2005 45%
October 2005 - September 2006 80%
October 2006 - September 2007 100%
October 2007 and thereafter 300%
Class A-6F Lockout Pro Rata Distribution Amount: As to any Distribution
Date, the amount equal to the product of (x) a fraction, the numerator of which
is the Certificate Principal Balance of the Class A-6F Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate
Certificate Principal Balance of the Fixed Rate Group Certificates immediately
prior to such Distribution Date and (y) the Fixed Rate Group Principal
Distribution Amount for such Distribution Date.
Class A-6F Pass-Through Rate: The lesser of (x) with respect to each
Interest Period ending on or prior to the Clean-Up Call Date, 7.63% and, for
each Interest Period thereafter, 8.13% and (y) the Fixed Rate Group Available
Funds Cap.
Class A-V1 Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-2 hereto. The Class A-V1 Certificates are the only Class of Adjustable
Rate Group I Certificates.
Class A-V1 Certificate Principal Balance: As to any Distribution Date,
the Initial Certificate Principal Balance of the Class A-V1 Certificates less
the Adjustable Rate Group I Principal Distribution Amounts actually distributed
to the holders of the Class A-V1 Certificates on previous Distribution Dates.
Class A-V1 Formula Pass-Through Rate: With respect to each Interest
Period ending on or prior to the Clean-up Call Date, LIBOR plus 0.25% per annum
and for any Interest Period thereafter, LIBOR plus 0.50% per annum.
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Class A-V1 Pass-Through Rate: With respect to each Interest Period, the
lesser of (x) the Class A-V1 Formula Pass-Through Rate and (y) the Adjustable
Rate Group I Available Funds Cap.
Class A-V2 Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit A-3 hereto. The Class A-V2 Certificates are the only Class of Adjustable
Rate Group II Certificates.
Class A-V2 Certificate Principal Balance: As to any Distribution Date,
the Initial Certificate Principal Balance of the Class A-V2 Certificates less
the Adjustable Rate Group II Principal Distribution Amounts actually distributed
to the holders of the Class A-V2 Certificates on previous Distribution Dates.
Class A-V2 Formula Pass-Through Rate: With respect to each Interest
Period ending on or prior to the Clean-up Call Date, LIBOR plus 0.26% per annum
and for any Interest Period thereafter, LIBOR plus 0.52% per annum.
Class A-V2 Pass-Through Rate: With respect to each Interest Period, the
lesser of (x) the Class A-V2 Formula Pass-Through Rate and (y) the Adjustable
Rate Group II Available Funds Cap.
Class C Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit B-1 hereto.
Class C Certificate Principal Balance: As to any Distribution Date, the
Initial Certificate Principal Balance of the Class C Certificates less any
amounts distributed to the holders of the Class C Certificates on previous
Distribution Dates with respect to principal on the Class C Certificates.
Class C Carryforward Amount: With respect to any Distribution Date, the
amount by which the aggregate of the amount by which the Class C Distribution
Amount for each prior Distribution Date exceeded the amount actually distributed
in respect of the Class C Distribution Amount on each such date, reduced by the
aggregate of the amounts distributed in respect of the Class C Carryforward
Amount on each such prior Distribution Dates, and reduced by the aggregate of
the amounts of Realized Losses that have resulted in the reduction of the
Overcollateralization Amount on each such prior Distribution Date.
Class C Distribution Amount: With respect to any Distribution Date,
means the interest allocated to the Class C Certificates as separate components
in accordance with note (8) of Section 9.16(e) with respect to such Distribution
Date and additionally, with respect to the first Distribution Date, an amount
equal to the Class C Certificate Principal Balance.
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Class P Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit B-3 hereto.
Class P Certificate Principal Balance: As to any Distribution Date, the
Initial Certificate Principal Balance of the Class P Certificates less any
amounts distributed to the holders of the Class P Certificates on previous
Distribution Dates with respect to principal on the Class P Certificates.
Class P Deposit: $100.00, to be deposited into the Certificate Account.
Class R Certificate: Any one of the Certificates executed by the
Trustee on behalf of the Trust, not in its individual capacity, but solely as
Trustee, authenticated by the Trustee and in substantially the form set forth in
Exhibit B-2 hereto representing both the Class R-I and Class R-II Certificates.
Class R-I Certificate: Any one of the Certificates described in Section
9.16 as representing the "residual interest" in REMIC I, as such term is defined
in Code Section 860G(a)(2). The Class R-I Certificate shall be certificated
together with the Class R-II Certificate, in the form of the Class R
Certificate.
Class R-II Certificate: Any one of the Certificates described in
Section 9.16 as representing the "residual interest" in REMIC II, as such term
is defined in Code Section 860G(a)(2). The Class R-II Certificate shall be
certificated together with the Class R-I Certificate, in the form of the Class R
Certificate.
Clean-up Call Date: The first Distribution Date on which the Pool
Balance is less than 5% of the sum of the Original Pool Balance and the
Prefunding Account Deposit.
Closing Date: September 21, 2000.
Closing Date Deposit: $0.
Code: The Internal Revenue Code of 1986, as amended.
Collection Account: The segregated account, which shall at all times be
an Eligible Account, established and maintained pursuant to Section 3.02(a) and
entitled "Bankers Trust Company of California, N.A., in trust for the benefit of
Holders of Aames Mortgage Trust 2000-1 Mortgage Pass-Through Certificates,
Series 2000-1, Collection Account". References herein to the Collection Account
shall include any Sub-Servicing Account as the context requires.
Collection Period: As to the first Distribution Date, the period
beginning on and including September 2, 2000 and ending on and including October
1, 2000 (except that with respect to payments due and unpaid on or before
September 1, 2000, only collections of principal are included). As to any
Distribution Date thereafter for collections of both interest and
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principal, the period beginning on and including the second day of the calendar
month immediately preceding the month in which such Distribution Date occurs and
ending on and including the first day of the calendar month of such Distribution
Date.
Combined Loan-to-Value Ratio: With respect to a Mortgage Loan, the
ratio (expressed as a percentage) of (i) the sum of the Original Principal
Amount of such related Mortgage Loan plus the outstanding principal balance (at
the time of origination of such Mortgage Loan) of each mortgage loan secured by
the related Mortgaged Property that is senior to such Mortgage Loan to (ii) the
Appraised Value of the related Mortgaged Property determined by the Seller at
the time of origination of such Mortgage Loan.
Company: Aames Capital Corporation, a California corporation.
Compensating Interest: As to any Distribution Date and any Mortgage
Loan Group, an amount equal to the lesser of (a) the related Monthly Servicing
Fee for the related Collection Period and (b) the difference between (i) 30
days' interest (at the related Mortgage Loan Rates, net of the Servicing Fee
Rate) on the Principal Balance of each Mortgage Loan in such Mortgage Loan Group
as to which a Principal Prepayment was received or that became a Liquidated
Mortgage Loan or that was otherwise charged-off (before giving effect to any
related reduction in the Principal Balance of such Mortgage Loan) by the
Servicer during the related Collection Period and (ii) the amount of interest
actually collected by the Servicer for such Mortgage Loans in such Mortgage Loan
Group during such Collection Period.
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business with respect to this Agreement
shall be principally administered, which office at the date of the execution of
this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx
00000-0000, Attention: Aames Mortgage Loan Pass-Through Certificates, Series
2000-1.
Coverage Deficit: With respect to any Class of Offered Certificates and
any Distribution Date, an amount equal to the product of (a) the Guaranteed
Principal Amount for such Distribution Date and (b) the fraction, expressed as a
percentage, the numerator of which is equal to the applicable Group Deficiency
Amount and the denominator of which is equal to the sum of the Group Deficiency
Amounts for such Distribution Date.
Cut-off Date: With respect to the Initial Mortgage Loans in each
Mortgage Loan Group, the close of business on September 1, 2000. With respect to
the Subsequent Mortgage Loans, the close of business on the Subsequent Cut-off
Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, its Principal
Balance as of the related Cut-off Date.
Defective Mortgage Loan: Any Mortgage Loan that is required to be
repurchased or substituted by the Seller pursuant to Section 2.03 or 2.05.
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Deficiency Amount: As to any Distribution Date and for the Offered
Certificates, the excess, if any, of (A) the sum of (i) the Accrued Certificate
Interest for each Class of Offered Certificates plus any Interest Carry Forward
Amount for each Class of Offered Certificates and (ii) the Guaranteed Principal
Amount over (B) Available Funds for all of the Mortgage Loan Groups (after
payment of the Trustee Fee, the Monthly Servicing Fee, the Certificate Insurer
Premium and the PMI Insurer Premium, if any).
Definitive Certificates: As defined in Section 6.02(e).
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Replacement Mortgage Loan.
Delinquency Percentage: As to any Distribution Date, the average of the
percentage obtained by dividing (i) the aggregate of the Principal Balances of
all Mortgage Loans that were then 90 or more days contractually delinquent as of
the end of the preceding calendar month, were in bankruptcy and 90 or more days
delinquent under the related Mortgage Note, or were REO Properties or were
either foreclosed upon or transferred pursuant to Section 3.06 during such
preceding calendar month, by (ii) the Pool Balance as of such Distribution Date.
Deposit Date: As to any Distribution Date, the third Business Day prior
to such Distribution Date.
Depository: The initial depository shall be The Depository Trust
Company, the nominee of which is Cede & Co. The Depository shall at all times be
a "clearing corporation" as defined in Section 8102(3) of the Uniform Commercial
Code of the State of California, as amended, or any successor provisions
thereto.
Depository Participant: A broker, dealer, bank or other financial
institution or other person for which, from time to time, the Depository effects
book-entry transfers and pledges of securities deposited with such Depository.
Determination Date: As to any Distribution Date, the last day of the
related Collection Period.
Disqualified Organization: Any Person that is (i) the United States,
any state or any political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality of a governmental unit that is a corporation if all of its
activities are subject to tax and, except in the case of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such governmental unit), (ii) a foreign government, international organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Code Section
521) exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Code Section 511 on unrelated business taxable income), (iv) rural electric
and telephone cooperatives described in Code Section 1381(a)(2)(C), and (v) any
other
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Person so designated by the Trustee based upon an Opinion of Counsel that the
holding of an ownership interest in a Class R Certificate by such Person may
cause any REMIC Pool or any Person having an ownership interest in any Class R
Certificate, other than such Person, to incur a liability for any 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 Code Section 7701 or successor provisions.
Distribution Date: The 25th day of each month or, if such day is not a
Business Day, the Business Day immediately following such 25th day, beginning
October 25, 2000.
Eligible Account: Either (A) a segregated account or accounts
maintained with an institution the deposits of which are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
unsecured and uncollateralized debt obligations of which shall be rated "AA" or
better by Standard & Xxxx'x, "X0" or better by Xxxxx'x and, if rated by Fitch,
"AA" by Fitch and in the highest short term rating category by Standard & Poor's
and Xxxxx'x and, if rated by Fitch, Fitch, and that is either (i) a federal
savings and loan 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 $50,000,000, acting in its fiduciary
capacity, the unsecured and uncollateralized debt obligations of which shall be
rated "Baa3" or better by Xxxxx'x. Any Eligible Accounts maintained with the
Trustee shall conform to the preceding clause (B).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Plan: Any Person that is an employee benefit plan within the
meaning of Section 3(3) of ERISA or any Person that is an individual retirement
account or employee benefit plan, trust or account subject to Section 4975 of
the Code.
ERISA Prohibited Holder: As defined in Section 6.02(b).
Event of Default: As defined in Section 8.01.
Extra Principal Distribution Amount: With respect to a Certificate
Group and any Distribution Date, means the lesser of (x) the related Monthly
Excess Cashflow Amount available for distribution to such Certificate Group from
the related Mortgage Loan Group and either or both of the other Mortgage Loan
Groups on such Distribution Date and (y) the related Target Deficiency.
FDIC: The Federal Deposit Insurance Corporation and its successors in
interest.
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FEMA: The Federal Emergency Management Agency and its successors in
interest.
FHLMC: The Federal Home Loan Mortgage Corporation and its successors in
interest.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each of the Classes of Certificates are as set forth below:
Final Scheduled Distribution Date
---------------------------------
Class A-1F January 25, 2017
Class A-2F August 25, 2022
Class A-3F November 25, 2025
Class A-4F January 25, 2029
Class A-5F October 25, 2030
Class A-6F October 25, 2030
Class A-V1 October 25, 2030
Class A-V2 October 25, 2030
Class C October 25, 2030
Class P October 25, 2030
Class R October 25, 2030
Fitch: Fitch, Inc.
Fixed Rate Group: The group of Initial Mortgage Loans comprised of
fixed rate mortgage loans identified in the Mortgage Loan Schedule as having
been assigned to the Fixed Rate Group and any Subsequent Mortgage Loans
identified in a Subsequent Transfer Agreement as having been assigned to the
Fixed Rate Group, including any Qualified Replacement Mortgage Loans delivered
in replacement thereof.
Fixed Rate Group Available Funds Cap: With respect to any Distribution
Date and the Fixed Rate Group Certificates, the per annum rate equal to the
weighted average of the Pass-Through Rates of the Class LT-AF and Class LT-XX
XXXXX I Regular Interests.
Fixed Rate Group Balance: As to any Distribution Date, the sum of the
aggregate of the Principal Balances of the Mortgage Loans in the Fixed Rate
Group as of the end of the related Collection Period plus, in the case of any
Distribution Date relating to a Collection Period that includes any part of the
Funding Period, any portion of the related allocated Prefunding Account Deposit
remaining on deposit in the Prefunding Account or Certificate Account as of the
last day of such Collection Period.
Fixed Rate Group Certificate Principal Balance: As to any Distribution
Date, the sum of the Class A-1F Certificate Principal Balance, the Class A-2F
Certificate Principal Balance, the Class A-3F Certificate Principal Balance, the
Class A-4F Certificate Principal Balance, the Class A-5F Certificate Principal
Balance, and the Class A-6F Certificate Principal Balance.
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Fixed Rate Group Certificates: The Class A-1F Certificates, the Class
A-2F Certificates, the Class A-3F Certificates, the Class A-4F Certificates, the
Class A-5F Certificates, and the Class A-6F Certificates.
Fixed Rate Group Principal Distribution Amount: With respect to any
Distribution Date, the Principal Distribution Amount with respect to the Fixed
Rate Group Certificates and the related Collection Period.
Fixed Rate Turbo Amount: As defined in Section 9.16.
FNMA: The Federal National Mortgage Association and its successors in
interest.
Foreign Person: A Person that is not (i) a citizen or resident of the
United States, (ii) a corporation or partnership (including an entity treated as
a corporation or partnership for U.S. federal income tax purposes) created in
the United States or organized under the laws of the United States or any state
thereof or the District of Columbia (except, in the case of a partnership, as
otherwise provided by Treasury regulations), (iii) an estate that is subject to
United States federal income tax regardless of the source of its income, or (iv)
a trust whose administration may be subject to the primary supervision of a
court within the United States and for which one or more United States persons
have the authority to control all substantial decisions of the trust.
Funding Period: Not applicable.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note, which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine the applicable Mortgage Loan Rate.
Group Deficiency Amount: With respect to any Certificate Group and any
Distribution Date, the amount, if any, by which the aggregate of Certificate
Principal Balances of each Class of Offered Certificates in such Certificate
Group (after taking into account all distributions thereto in respect of
principal on such Distribution Date other than any amounts paid by the
Certificate Insurer) exceeds the related Group Pool Balance as of the last day
of the related Collection Period (plus any allocable amounts on deposit in the
Pre-Funding Account).
Group Factor: As to any Distribution Date and any Mortgage Loan Group,
the percentage (carried to eight places, rounded down) obtained by dividing the
aggregate Principal Balances of the Mortgage Loans in the related Mortgage Loan
Group (after giving effect to any distribution of principal on the related
Certificates on such Distribution Date) by (i) in the case of the Fixed Rate
Group, the sum of the Original Fixed Rate Group Balance and the related
allocated Prefunding Account Deposit, (ii) in the case of Adjustable Rate Group
I, the sum of the Original Adjustable Rate Group I Balance and the related
allocated Prefunding Account Deposit or (iii) in the case of Adjustable Rate
Group II, the sum of the Original Adjustable Rate Group II Balance and the
related allocated Prefunding Account Deposit, as applicable.
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Group Pool Balance: The Fixed Rate Group Balance, the Adjustable Rate
Group I Balance or the Adjustable Rate Group II Balance, as applicable.
Guaranteed Principal Amount: As to any Distribution Date, (a) the
amount, if any, by which the aggregate Certificate Principal Balance of the
Offered Certificates exceeds the Pool Balance at the end of the previous month
(after giving effect to all distributions of principal on the Offered
Certificates on such Distribution Date) plus any amounts on deposit in the
Prefunding Account and (b) on the Distribution Date in October 2030 (after
giving effect to all other distributions of principal on the Offered
Certificates), an amount equal to the aggregate Certificate Principal Balance of
the Offered Certificates.
Holder: A Certificateholder.
Index: With respect to any Adjustable Rate Mortgage Loan, the
applicable index for computing the Mortgage Loan Rate as specified in the
Mortgage Note.
Initial Certificate Principal Balance: As to the Class P Certificates,
$100. As to the Class C Certificates, $3,768,563.25. As to the Class R
Certificates, $0. As to any other Class of Offered Certificates, the respective
amount set forth below opposite such Class:
Initial Certificate
Class Principal Balance
----- -----------------
Class A-1F Certificates $62,664,000
Class A-2F Certificates $31,500,000
Class A-3F Certificates $30,000,000
Class A-4F Certificates $42,500,000
Class A-5F Certificates $28,216,000
Class A-6F Certificates $14,000,000
Class A-V1 Certificates $123,676,600
Class A-V2 Certificates $123,676,600
Initial Mortgage Loan: Any Mortgage Loan in any Mortgage Loan Group
included in the assets of the Trust as of the Closing Date that is indicated as
such on the Mortgage Loan Schedule.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as of
September 21, 2000, among the Certificate Insurer, the Company and the Trustee,
a copy of which is attached hereto as Exhibit L.
Insurance Proceeds: With respect to any Distribution Date, proceeds
paid by any insurer (other than the Certificate Insurer and the PMI Insurer) and
received by the Servicer during the related Collection Period pursuant to any
insurance policy covering a Mortgage Loan or the related Mortgaged Property,
including any deductible payable by the Servicer with respect to a blanket
insurance policy pursuant to Section 3.04 and the proceeds from any fidelity
bond or errors and omission policy pursuant to Section 3.12 (to the extent such
payments compensate for
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losses that would otherwise be payable to Certificateholders pursuant to this
Agreement), net of any component thereof covering any expenses incurred by or on
behalf of the Servicer and specifically reimbursable under this Agreement.
Insured Payment: As of any Distribution Date, (i) any Deficiency Amount
and (ii) any Preference Amount.
Insurer Premium Rate: With respect to any Distribution Date, the
percentage for the computation of the Certificate Insurer Premium as set forth
in the Insurance Agreement.
Interest Carry Forward Amount: With respect to any Class of Offered
Certificates on any Distribution Date, means the amount, if any, by which (i)
the Accrued Certificate Interest on such Class for the preceding Distribution
Date plus any outstanding Interest Carry Forward Amount with respect to such
Class from the second preceding Distribution Date (together with interest on
such outstanding Interest Carry Forward Amount at the related Pass-Through Rate
for the related Interest Period to the extent lawful) exceeds (ii) the amount of
interest actually distributed to the holders of such Certificates on such
Distribution Date.
Interest Period: With respect to the Fixed Rate Group Certificates and
the Class LT-AF and LT-XX XXXXX I Regular Interests, the calendar month
preceding the month in which such Distribution Date occurs; and with respect to
the Class A-V1 Certificates, the Class LT-AV1 and Class LT-MV1 REMIC I Regular
Interests, the Class A-V2 Certificates, the Class LT-AV1 and Class LT-MV1 REMIC
I Regular Interests, the first Interest Period, the period beginning on the
Closing Date and ending on the day preceding the Distribution Date in October
2000, and as to any subsequent Distribution Date, the period beginning on the
immediately preceding Distribution Date and ending on the day prior to the
related Distribution Date.
Interest Shortfall: As to any Distribution Date, the amount of any (i)
Prepayment Interest Shortfall and (ii) Relief Act Shortfall for the related
Mortgage Loan Group. So long as Financial Security Assurance Inc. is the
Certificate Insurer, the Certificate Insurance Policy will cover Prepayment
Interest Shortfalls to the extent not covered by Compensating Interest paid by
the Servicer.
Investment Company Act: The Investment Company Act of 1940, as amended.
Junior Mortgage Loan: Any Mortgage Loan secured by a Mortgage with a
lien of other than first priority.
Late Payment Rate: With respect to any date of determination, the rate
of interest as it is publicly announced by Citibank, N.A. at its principal
office in New York, New York on its prime rate (any change in such prime rate of
interest to be effective on the date such change is announced by Citibank, N.A.)
plus 3%.
LIBOR: With respect to the October 2000 Distribution Date, 6.62125% per
annum. With respect to any subsequent Distribution Date, the per annum rate
determined by the Trustee
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on the related LIBOR Determination Date on the basis of the offered rate for
one-month U.S. dollar deposits as such rate appears on the Dow Xxxxx Telerate
Service Page 3750 (or any replacement page on that service for the purpose of
displaying London Interbank Offered Rates of major banks) as of 11:00 a.m.
(London time) on such LIBOR Determination Date.
On each LIBOR Determination Date, in the event that Dow Xxxxx Telerate
Service Page 3750 (or any replacement page on that service for the purpose of
displaying London Interbank Offered Rates of major banks) is not available, the
Trustee will establish LIBOR as follows:
(a) If on such LIBOR Determination Date two or more Reference Banks
provide such offered quotations, LIBOR shall be the arithmetic mean (rounded
upwards if necessary to the nearest whole multiple of 0.0625%) of such offered
quotations.
(b) If on such LIBOR Determination Date fewer than two Reference Banks
provide such offered quotations, LIBOR shall be the greater of (x) LIBOR as
determined on the previous LIBOR Determination Date and (y) the Reserve Interest
Rate. The "Reserve Interest Rate" shall be the rate per annum that the Trustee
determines to be either (i) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 0.0625%) of the one-month U.S. dollar lending
rates that New York City banks selected by the Trustee are quoting on the
relevant LIBOR Determination Date to the principal London offices of leading
banks in the London interbank market or, in the event that the Trustee can
determine no such arithmetic mean, (ii) the lowest one-month U.S. dollar lending
rate that New York City banks selected by the Trustee are quoting on such LIBOR
Determination Date to leading European banks.
As used in this definition, "Reference Banks" means leading banks
selected by the Trustee and engaged in transactions in Eurodollar deposits in
the international Eurocurrency market (i) with an established place of business
in London, (ii) whose quotations appear on such page on the LIBOR Determination
Date in question, (iii) that have been designated as such by the Trustee and
(iv) not controlling, controlled by or under common control with the Sponsor or
any of its affiliates.
LIBOR Determination Date: With respect to any Interest Period after the
first Interest Period, the second London Business Day immediately preceding the
first day of such Interest Period.
Liquidated Mortgage Loan: As to any Distribution Date, any Mortgage
Loan as to which the Servicer has determined, in accordance with the servicing
procedures specified herein, during the related Collection Period that all
Liquidation Proceeds that it expects to recover from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any
insurance policy or from any Mortgagor. Such expenses shall include, without
limitation, legal fees and expenses, real estate brokerage commissions, any
unreimbursed amount expended by the Servicer pursuant to Section 3.06 with
respect to the related Mortgage Loan (including, without limitation, amounts
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voluntarily advanced to correct defaults on each mortgage loan that is senior to
such Mortgage Loan), any other related and previously unreimbursed Servicing
Advances and any related and previously unreimbursed Property Protection
Expenses.
Liquidation Proceeds: Cash (other than Insurance Proceeds) received in
connection with the liquidation of any Mortgaged Property, including payments
received under the PMI Policy, whether through trustee's sale, foreclosure sale,
condemnation, taking by eminent domain or otherwise received in respect of any
Mortgage Loan foreclosed upon as described in Section 3.06 (including, without
limitation, proceeds from the rental of the related Mortgaged Property).
Liquidation Report: A liquidation report in the form of Exhibit I
attached hereto.
Loan-to-Value Ratio: The Original Principal Amount of a Mortgage Loan
as a percentage of the Appraised Value of the related Mortgaged Property
determined by the Seller at the time of origination of such Mortgage Loan.
London Business Day: A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.
Loss Percentage: As to any Distribution Date, the percentage equivalent
of the fraction obtained by dividing (i) the principal amount of cumulative
Realized Losses on all Mortgage Loans from the Cut-off Date through the end of
the related Collection Period by (ii) the sum of the Original Pool Balance and
the Prefunding Account Deposit.
Maximum Rate: With respect to an Adjustable Rate Mortgage Loan, any
absolute maximum Mortgage Loan Rate set by provisions in the related Mortgage
Note.
Minimum Rate: With respect to an Adjustable Rate Mortgage Loan, any
absolute minimum Mortgage Loan Rate, set by provisions in the related Mortgage
Note, subject to the initial Mortgage Loan Rate first adjusting to a level in
excess of such minimum Mortgage Loan Rate in accordance with the terms of the
Mortgage Note.
Monthly Advance: Defined in Section 5.02(a).
Monthly Excess Cashflow Amount: With respect to any Mortgage Loan Group
and any Distribution Date, the Available Funds remaining after the application
of payments in clauses (1) through (5) of Section 5.01(b).
Monthly Mortgage Payment: With respect to any Mortgage Note, the amount
of each monthly payment (other than any final balloon payment) payable under
such Mortgage Note in accordance with its terms by the Mortgagor, including one
month's accrued interest on the related Principal Balance at the then applicable
Mortgage Loan Rate, but net of any portion of such monthly payment that
represents late payment charges, prepayment or extension fees or collections
allocable to payments to be made by Mortgagors for payment of insurance premiums
or similar items.
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Monthly Servicing Fee: With respect to any Collection Period and each
Mortgage Loan Group, 1/12 of the product of the Servicing Fee Rate and the
aggregate Principal Balance of the Mortgage Loans in such Mortgage Loan Group as
of the beginning of the related Collection Period (or, in the case of the first
Collection Period, the aggregate Principal Balance of the related Mortgage Loans
as of the Cut-off Date). The Monthly Servicing Fee shall be payable on the
following Deposit Date to the Servicer as servicing compensation hereunder
pursuant to Section 3.08.
Moody's: Xxxxx'x Investors Service, Inc. and its successors in
interest.
Mortgage: The mortgage, deed of trust or other instrument creating a
first, second or third lien on an estate in fee simple in real property securing
a Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to such Mortgage File pursuant to this Agreement.
Mortgage Loan: Each of the Mortgage Loans transferred and assigned to
the Trustee pursuant to Section 2.01 or 2.02, that from time to time comprise
part of the Trust, the Mortgage Loans originally so held being identified in the
Mortgage Loan Schedule attached hereto as Exhibit E.
Mortgage Loan Group: The Fixed Rate Group, Adjustable Rate Group I or
Adjustable Rate Group II. References herein to any Class or Classes of
Certificates being related to a Mortgage Loan Group, shall mean (A) in the case
of the Fixed Rate Group, the Fixed Rate Group Certificates, the Class C
Certificates, the Class P Certificates and the Class R Certificates, (B) in the
case of the Adjustable Rate Group I Certificates, the Class A-V1 Certificates,
the Class C Certificates, the Class P Certificates and the Class R Certificates,
and (C) in the case of the Adjustable Rate Group II Certificates, the Class A-V2
Certificates, the Class C Certificates, the Class P Certificates and the Class R
Certificates.
Mortgage Loan Rate: With respect to any Adjustable Rate Mortgage Loan,
the per annum rate of interest computed in accordance with the provisions of the
related Mortgage Note as the sum of the Index and the Gross Margin, subject to
any Minimum Rate, the Maximum Rate or periodic limitation on adjustments to such
rate applicable from time to time to the calculation of interest thereon. As to
any Fixed Rate Mortgage Loan, the fixed per annum rate of interest applicable to
the calculation of interest thereon specified in the related Mortgage Note.
Mortgage Loan Schedule: As of any date, the schedule of Mortgage Loans
as amended by each subsequently delivered schedule of Subsequent Mortgage Loans
separated by Mortgage Loan Group. The initial schedule of Mortgage Loans as of
the related Cut-off Date is attached hereto as Exhibit E and sets forth as to
each such Mortgage Loan, among other things, (a) its identifying number and the
name of the related Mortgagor; (b) the street address of the related Mortgaged
Property including the state, county and zip code; (c) its date of origination;
(d) the
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original number of months to stated maturity; (e) its original stated maturity;
(f) its Original Principal Amount; (g) its Cut-off Date Principal Balance; (h)
the related Mortgage Loan Rate as of the related Cut-off Date and, with respect
to any Adjustable Rate Mortgage Loan, the related Index, Gross Margin, Minimum
Rate, Maximum Rate and any periodic limitations on adjustment; (i) the scheduled
Monthly Mortgage Payment as of the related Cut-off Date; (j) the date in each
month on which the related Monthly Mortgage Payments are due; (k) its Combined
Loan-to-Value Ratio or the ratio, expressed as a percentage, of the Original
Principal Amount of such Mortgage Loan to the Appraised Value of the related
Mortgaged Property, as applicable; (l) the lien status of the related Mortgage
and, with respect to any Junior Mortgage Loan, the principal amount (as of the
date of origination) of all related Senior Liens; (m) whether the related
Mortgaged Property is owner-occupied or non-owner-occupied; (n) whether the
related Mortgaged Property is a single-family residence, a two- to four-family
residence, a unit in a condominium or planned unit development, or manufactured
housing; (o) whether the Mortgage Loan has been originated by an Affiliate of
the Company; (p) the related Cut-off Date (unless specified in a related
Subsequent Transfer Agreement); and (q) a code indicating if the Mortgage Loan
is covered under the PMI Policy.
Mortgage Note: The note or other instrument evidencing the indebtedness
of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor under a Mortgage Note.
Net Liquidation Proceeds: As to any Mortgage Loan, Liquidation Proceeds
net of Liquidation Expenses. If Liquidation Expenses exceed Liquidation Proceeds
as to any Mortgage Loan, Net Liquidation Proceeds shall be zero. For all
purposes of this Agreement, Net Liquidation Proceeds shall be allocated first to
accrued and unpaid interest on the related Mortgage Loan and then to the
Principal Balance thereof.
Non-permitted Foreign Holder: As defined in Section 6.02(c).
Nonrecoverable Advance: Any Servicing Advance that, in the Servicer's
reasonable judgment, would not be ultimately recoverable by the Servicer from
late collections, Insurance Proceeds or Liquidation Proceeds on the related
Mortgage Loan or otherwise, as evidenced by an Officer's Certificate delivered
to the Certificate Insurer and the Trustee no later than the Business Day
following the Servicer's determination thereof.
Notice of Claim: The notice required to be furnished by the Trustee to
the Certificate Insurer in the event an Insured Payment is required to be paid
under the Certificate Insurance Policy with respect to any Distribution Date, in
the form set forth as an exhibit to the Certificate Insurance Policy.
Offered Certificateholder: A holder of an Offered Certificate.
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Offered Certificates: The Certificates other than the Retained
Certificates.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President of the
Seller or the Servicer, as the case may be, and delivered to the Trustee,
Certificate Insurer or each Rating Agency, as the case may be.
Opinion of Counsel: A written opinion of counsel reasonably acceptable
to the Trustee and, in the case of opinions delivered to Certificate Insurer,
reasonably acceptable to it, who may be in-house counsel for the Seller or the
Servicer (except with respect to any opinion with respect to or concerning the
REMIC status of any REMIC Pool). Any expense related to obtaining an Opinion of
Counsel for an action requested by a party shall be borne by the party required
to obtain such opinion or seeking to effect the action that requires the
delivery of such Opinion of Counsel.
Original Adjustable Rate Group I Balance: Means the aggregate of the
outstanding principal amounts of each Initial Mortgage Loan that is an
Adjustable Rate Group I Mortgage Loan as of its related Cut-off Date, which
amount is $125,560,262.45.
Original Adjustable Rate Group II Balance: Means the aggregate of the
outstanding principal amounts of each Initial Mortgage Loan that is an
Adjustable Rate Group II Mortgage Loan as of its related Cut-off Date, which
amount is $125,560,028.42.
Original Fixed Rate Group Balance: Means the aggregate of the
outstanding principal amounts of each Initial Mortgage Loan that is a Fixed Rate
Mortgage Loan as of its related Cut-off Date, which amount is $208,881,572.38.
Original Pool Balance: Means the aggregate outstanding principal
amounts of each Initial Mortgage Loan as of its related Cut-off Date, which
amount is $460,001,863.25.
Original Principal Amount: With respect to any Mortgage Loan, the
original principal amount due under the related Mortgage Note as of its date of
origination.
Overcollateralization Amount: With respect to a Mortgage Loan Group and
as of any Distribution Date, the excess of (x) the aggregate of the outstanding
Principal Balances of the Mortgage Loans in such Mortgage Loan Group as of the
last day of the related Collection Period (plus, during the Funding Period,
related allocated amounts on deposit in the Prefunding Account on such date)
over (y) the aggregate Certificate Principal Balance of the related Offered
Certificates (after taking into account all distributions in respect of
principal collections on such Distribution Date).
Overcollateralization Release Amount: With respect to any Certificate
Group and any Distribution Date (A) prior to the occurrence of a Step Down
Trigger, zero, and (B) on or after the occurrence of a Step Down Trigger, the
lesser of (x) the related Basic Principal Amount for such Distribution Date and
(y) the excess, if any, of (i) the related Overcollateralization Amount
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for such Distribution Date, assuming that 100% of the related Basic Principal
Amount is applied as a principal payment on the related Certificate Group on
such Distribution Date over (ii) the related Targeted Overcollateralization
Amount for such Distribution Date.
Pass-Through Rate: The Class A-1F Pass-Through Rate, the Class A-2F
Pass-Through Rate, the Class A-3F Pass-Through Rate, the Class A-4F Pass Through
Rate, the Class A-5F Pass Through Rate, the Class A-6F Pass Through Rate, the
Class A-V1 Pass-Through Rate or the Class A-V2 Pass-Through Rate, as applicable.
Payment Ahead: Any payment of one or more Monthly Mortgage Payments
remitted by a Mortgagor with respect to a Mortgage Note in excess of the Monthly
Mortgage Payment due during such Collection Period with respect to such Mortgage
Note, which sums the related Mortgagor has instructed the Servicer to apply to
Monthly Mortgage Payments due in one or more subsequent Collection Periods. A
Monthly Mortgage Payment that was a Payment Ahead shall, for purposes of
computing Available Funds, be deemed to have been received by the Servicer on
the date in the related Collection Period on which such Monthly Mortgage Payment
would have been due if such Monthly Mortgage Payment was not a Payment Ahead.
Payoff Notice: The certification delivered by the Servicer in
connection with any payment in full of the outstanding principal balance of a
Mortgage Loan pursuant to Section 3.07, to be substantially in the form of
Exhibit H.
Percentage Interest: With respect to any Certificate, the undivided
percentage interest (carried to eight places, rounded down) obtained by dividing
the original principal balance of such Certificate by the Initial Certificate
Principal Balance of the related Class, as applicable, and multiplying the
result by 100; provided that with respect to a Class C Certificate, a Class P
Certificate or a Class R Certificate, Percentage Interest means the undivided
percentage interest set forth on the face of such Certificate, which in the
aggregate shall not exceed 100%.
Permitted Investments: One or more of the following obligations,
instruments and securities:
(A) 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;
(B) Federal Housing Administration debentures, FHLMC senior
debt obligations and FNMA 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 or that are not
rated in the highest rating category by each Rating Agency;
(C) 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
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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" or better by Standard & Poor's, "Prime-1" or better by
Moody's and, if rated by Fitch, "F-1+" or better by Fitch;
(D) deposits of any bank or savings and loan association that
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 Bank Insurance Fund or the Savings Association Insurance
Fund of the FDIC;
(E) commercial paper (having original maturities of not more
than 180 days) that has the highest short term rating of each of
Standard & Poor's and Moody's and, if rated by Fitch, Fitch;
(F) investments in money market funds rated "AAAm" or "AAAm-G"
by Standard & Poor's "AAA" by Fitch and "Aaa" by Moody's and, if rated
by Fitch, Fitch (any such money market funds that provide for demand
withdrawals without penalty being conclusively deemed to satisfy any
maturity requirement for Permitted Investments set forth herein); and
(G) investments approved in writing by all Rating Agencies and
the Certificate Insurer;
provided that no investment described hereunder shall evidence either the right
to receive (i) only interest with respect to obligations underlying such
instrument or (ii) both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with respect
to such instrument provided a yield to maturity at par greater than 120% of the
yield to maturity 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 date on which such monies will be needed to make
payments, or in the case of Permitted Investments held in the Prefunding
Account, shall be available on the Business Day next succeeding the date the
Trustee receives the Addition Notice that such monies will be needed.
Notwithstanding the foregoing, with respect to investment of amounts in any
account, any of the foregoing obligations, instruments or securities will not be
Permitted Investments to the extent that an investment therein will cause the
then outstanding principal amount thereof in which such funds are then invested
to exceed $25,000,000 (such investments being valued at par).
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
PMI Downgrade or Claims Denial Test: The PMI Downgrade or Claims Denial
Test will be met with respect to a Distribution Date if any of the following
events occurs:
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(i) The PMI Insurer is downgraded below "A" or "A2" by Standard &
Poor's or Moody's, respectively;
(ii) The cumulative amounts of claims denied by the PMI Insurer for
any 12-month period preceding such Distribution Date exceeds
0.75% of the outstanding principal balance of the PMI Mortgage
Loans at the beginning of such 12-month period (excluding any
claim made with respect to a PMI Mortgage Loan repurchased by
the Seller); or
(iii) The cumulative amounts of claims denied by the PMI Insurer
exceed $480,000 in the aggregate (excluding any claim made
with respect to a PMI Mortgage Loan repurchased by the
Seller).
PMI Insurer: Mortgage Guaranty Insurance Corporation, a monoline
private insurance company organized and created under the laws of the State of
Wisconsin, or its successors in interest.
PMI Insurer Premium: For any Distribution Date and any Certificate
Group, the aggregate of the premiums payable, if any, during the immediately
preceding Collection Period under the PMI Policy for any PMI Mortgage Loans in
the related Mortgage Loan Group, as set forth in an a statement delivered to the
Trustee by the PMI Insurer with respect to such Distribution Date.
PMI Mortgage Loans: The list of Mortgage Loans insured by the PMI
Insurer attached hereto as Exhibit P.
PMI Policy: The Primary Mortgage Insurance Policy (No. 4-690-4-3129)
with respect to the PMI Mortgage Loans and all endorsements thereto dated the
Closing Date, issued by the PMI Insurer.
Policy Payments Account: The segregated account, which shall be an
Eligible Account, established and maintained pursuant to Section 3.18(a) and
entitled "Bankers Trust Company of California, N.A., as Trustee for Aames
Mortgage Trust 2000-1 Mortgage Pass-Through Certificates, Series 2000-1, Policy
Payments Account".
Pool Balance: As to any Distribution Date, the sum of the Fixed Rate
Group Balance, the Adjustable Rate Group I Balance and the Adjustable Rate Group
II Balance.
Preference Amount: Any avoided payment required to be paid pursuant to
Section 3 of Endorsement No. 1 to the Certificate Insurance Policy.
Prefunding Account: Not applicable.
Prefunding Account Deposit: $0.
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Prefunding Distribution Date: Not applicable.
Prepayment Assumption: Means the prepayment assumptions described in
the Prospectus Supplement as having been used to generate the prepayment
scenarios therein described.
Prepayment Charge: As to a Mortgage Loan, any charge paid by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan so held by the Trust being
identified in a prepayment charge schedule (other than any Servicer Prepayment
Charge Payment Amount).
Prepayment Charge Period: As to any Mortgage Loan, the period of time,
if any, during which a Prepayment Charge may be imposed.
Prepayment Charge Schedule: As of any date, the list of Prepayment
Charges on the Mortgage Loans included in the Trust on such date, attached
hereto as Exhibit R (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 term of the Prepayment Charge;
(iii) the state of origination of the related Mortgage Loan;
(iv) the date on which the first Monthly Mortgage Payment was due
on the related Mortgage Loan;
(v) the term of the related Mortgage Loan;
(vi) the Principal Balance of the related Mortgage Loan as of the
Cut-off Date;
(vii) a code indicating whether a Mortgage Loan has a prepayment
penalty;
(viii) a code indicating the type of prepayment penalty;
(ix) a code indicating the amount, if any, of a prepayment by a
Mortgagor that would not be subject to the prepayment penalty
that would otherwise apply; and
(x) the period from the date of origination of the Mortgage Loan
during which the prepayment penalty applies.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan Group, the amount, if any, by which the amount described in clause
(b) of the first sentence of
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the definition of Compensating Interest for such Distribution Date exceeds the
Monthly Servicing Fee (calculated with a Servicing Fee Rate of 0.50% per annum)
for such Mortgage Loan Group and the related Collection Period.
Principal Balance: As to any Mortgage Loan and any day, the actual
outstanding principal amount thereof as of the close of business on the last day
of the preceding calendar month (or, if prior to the last day of the calendar
month in which the Cut-off Date occurs, as of the related Cut-off Date, without
duplication), less the following amounts, if any, received through the last day
of the preceding calendar month (i) any Principal Payments received in respect
of such Mortgage Loan, (ii) Net Liquidation Proceeds and Trust Insurance
Proceeds allocable to principal recovered or collected in respect of such
Mortgage Loan, (iii) the portion of the Purchase Price allocable to principal to
be remitted by the Seller or the Servicer to the Trustee on the next succeeding
Deposit Date in connection with a purchase or repurchase of such Mortgage Loan
pursuant to Section 2.03, 2.05, 3.01, 3.06 or 10.01, to the extent such amount
is actually received by the Trustee on such Deposit Date, (iv) the amount to be
remitted by the Seller to the Trustee on the next succeeding Deposit Date in
connection with a substitution of a Qualified Replacement Mortgage Loan for such
Mortgage Loan pursuant to Section 2.03 or 2.05, to the extent such amount is
actually received by the Trustee on such Deposit Date and (v) the amount to be
remitted by the Certificate Insurer to the Trustee on the next succeeding
Deposit Date in connection with a purchase of such Mortgage Loan pursuant to
Section 10.01.
Principal Distribution Amount: As to any Distribution Date and any
Certificate Group, the lesser of (a) the aggregate Certificate Principal
Balances of the related Certificate Group immediately preceding such
Distribution Date and (b) the Basic Principal Amount of the related Certificate
Group minus the related Overcollateralization Release Amount.
Principal Payment: As to any Mortgage Loan and Collection Period, all
amounts received or, in the case of the principal portion of any Payment Ahead,
deemed to have been received by the Servicer from or on behalf of the related
Mortgagor during such Collection Period (including Principal Prepayments) that,
at the time of receipt or, in the case of any Payment Ahead, at the time such
Payment Ahead is deemed to have been received, were applied or were required to
be applied by the Servicer in reduction of the Principal Balance of such
Mortgage Loan.
Principal Prepayment: As to any Mortgage Loan and Collection Period,
any payment by a Mortgagor or other recovery in respect of principal on a
Mortgage Loan (including Net Liquidation Proceeds) that, in the case of a
payment by a Mortgagor, is received in advance of its scheduled due date and is
not a Payment Ahead.
Property Protection Expenses: Expenses (exclusive of overhead expenses)
reasonably paid or incurred by or for the account of the Servicer in connection
with the preservation or protection of a Mortgaged Property or the security of a
Mortgaged Property, including (a) hazard insurance policy premiums, (b) real
estate taxes and property repair, replacement, protection and preservation
expenses, (c) amounts expended to cure or prevent any default with respect to
any mortgage loan senior to the related Mortgage Loan and (d) similar expenses
reasonably paid or
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incurred to preserve or protect the value of such Mortgaged Property or security
(including but not limited to reasonable legal fees and expenses).
Prospectus: That certain Prospectus dated as of September 8, 2000
relating to the asset-backed bonds and certificates to be sold by the Company.
Prospectus Supplement: That certain Prospectus Supplement dated as of
September 8, 2000 relating to $456,233,200 principal amount of Mortgage
Pass-Through Certificates, Series 2000-1.
Purchase Price: With respect to (a) any Defective Mortgage Loan or (b)
any Mortgage Loan to be purchased by the Servicer pursuant to Section 3.01 or
Section 3.06, an amount equal to (i) the sum of (A) the outstanding principal
balance of such Mortgage Loan or Defective Mortgage Loan, as the case may be, as
of the beginning of the Collection Period next preceding the Deposit Date on
which such repurchase or purchase is required to occur, (B) interest computed at
the applicable Mortgage Loan Rate on such outstanding principal balance from the
date to which interest was last paid by the Mortgagor to the last day of the
Collection Period immediately preceding the Deposit Date on which such
repurchase or purchase occurs and (C) any previously unreimbursed Servicing
Advances made on or in respect of such Defective Mortgage Loan or Mortgage Loan,
as the case may be, less (ii) any payments of principal and interest in respect
of such Defective Mortgage Loan or Mortgage Loan, as the case may be, made by or
on behalf of the related Mortgagor during such Collection Period; provided that
the Purchase Price with respect to any Restricted Mortgage Loan to be purchased
by the Servicer pursuant to Section 3.06 will be the fair market value of the
related Mortgaged Property as described in such Section 3.06.
Qualified Replacement Mortgage Loan: A Mortgage Loan that is
substituted for a Deleted Mortgage Loan pursuant to Section 2.03 or Section 2.05
that must, at the end of the Collection Period preceding the date of such
substitution, (i) have an outstanding principal balance (when taken together
with any other Qualified Replacement Mortgage Loan being substituted for such
Deleted Mortgage Loan), not in excess of and not substantially less than the
unpaid principal balance of the Deleted Mortgage Loan at the end of the
Collection Period preceding the date of substitution, (ii) if the Deleted
Mortgage Loan is an Adjustable Rate Mortgage Loan, have the Mortgage Loan Rate
computed on the same basis as the Mortgage Loan Rate on the related Mortgage
Loan, utilizing the same Index and having a Gross Margin or Minimum Rate not
less than (and not more than one percentage point in excess of) the Gross Margin
and Minimum Rate applicable to the Deleted Mortgage Loan and if the Deleted
Mortgage Loan is a Fixed Rate Mortgage Loan, have a Mortgage Loan Rate not less
than (and not more than one percentage point in excess of) the Mortgage Loan
Rate of the Deleted Mortgage Loan, (iii) have a remaining term to maturity not
greater than (and not more than one year less than) that of the Deleted Mortgage
Loan, (iv) have a Combined Loan-to-Value Ratio equal to or lower than the
Combined Loan-to-Value Ratio of the Deleted Mortgage Loan, (v) satisfy the
criteria set forth from time to time in the definition "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 warranty
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set forth in Section 2.05, (viii) have the same or better property type as the
Deleted Mortgage Loan and (ix) have the same or better occupancy status. In the
event that one or more mortgage loans are proposed to be substituted for one or
more Deleted Mortgage Loans, the foregoing tests may be met on a weighted
average basis or other aggregate basis (which, in the case of the Adjustable
Rate Mortgage Loans, must be acceptable to the Certificate Insurer), except that
the requirements of clauses (iv) through (viii) hereof must be satisfied as to
each Qualified Replacement Mortgage Loan.
Rating Agencies: Standard & Poor's, Fitch and Xxxxx'x (each, a "Rating
Agency"). If either such agency or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical credit rating
agency, or other comparable Person, designated by the Servicer, notice of which
designation shall be given to the Trustee and that shall be acceptable to the
Certificate Insurer.
Realized Loss: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the Principal Balance of such Mortgage Loan and accrued
and unpaid interest thereon (determined as of the Determination Date immediately
prior to such Mortgage Loan becoming a Liquidated Mortgage Loan) exceeds the Net
Liquidation Proceeds, if any, in respect of such Mortgage Loan, which amount
shall in no event exceed the Principal Balance of such Mortgage Loan (determined
as of the Determination Date immediately prior to such Mortgage Loan becoming a
Liquidated Mortgage Loan).
Record Date: As to any Distribution Date, (a) for the Fixed Rate Group
Certificates the close of business on the last Business Day of the calendar
month immediately preceding such Distribution Date and (b) for the Adjustable
Rate Group I Certificates and Adjustable Rate Group II Certificates, the
Business Day immediately preceding such Distribution Date so long as such
Certificates remain in book-entry form and, otherwise, the last Business Day of
the calendar month immediately preceding such Distribution Date.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Shortfall: As to any Distribution Date and any Mortgage Loan
Group, the amount of any reduction of interest collectible on any Mortgage Loan
in such Mortgage Loan Group for the related Collection Period due to the
application of the Relief Act.
REMIC: A "real estate mortgage investment conduit" as defined in Code
Section 860D, and in particular, either of REMIC I or REMIC II as indicated by
context.
REMIC Pool: With respect to REMIC I, the assets of the Trust other than
the Prefunding Account, Capitalized Interest Account, Supplemental Interest
Reserve Fund, Closing Date Deposit and REMIC I Regular Interests, and with
respect to REMIC II, the REMIC I Regular Interests, other than the Class P
Certificates.
REMIC I Interests: As defined in Section 9.16(b) and described in
Section 9.16.
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REMIC I Regular Interests: As defined in Section 9.16(b) and described
in Section 9.16.
REMIC Provisions: Provisions of the federal income tax law relating to
REMICs that appear at Sections 860A through 860G of Part IV of Subchapter M of
Chapter 1 of Subtitle A of the Code, and related provisions, and U.S. Department
of the Treasury proposed, temporary or final regulations and rulings promulgated
thereunder, as the foregoing may be in effect from time to time.
REO Property: As defined in Section 5.02(a).
Responsible Officer: When used with respect to the Trustee, any Vice
President or Assistant Vice President, any Assistant Secretary, any Assistant
Treasurer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and 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. When used
with respect to the Seller or Servicer, the President or any Vice President,
Assistant Vice President or any Secretary or Assistant Secretary.
Restricted Mortgage Loan: A Mortgage Loan that as of the Closing Date
was 90 or more days contractually delinquent. As of the date hereof, there are
no Restricted Mortgage Loans in any Mortgage Loan Group.
Restricted Mortgaged Property: With respect to any Restricted Mortgage
Loan, the Mortgaged Property securing such Restricted Mortgage Loan.
Retained Certificates: The Class C Certificates, the Class P
Certificates and the Class R Certificates.
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)
preceding calendar months.
Securities Act: The Securities Act of 1933, as amended.
Seller: The Company.
Senior Lien: With respect to any Junior Mortgage Loan, any liens on the
related Mortgaged Property of higher priority.
Servicer Prepayment Charge Payment Amount: The amounts payable by the
Servicer in respect of any waived Prepayment Charges pursuant to Section 3.22.
Servicer: Countrywide Home Loans, Inc., a New York corporation, or any
successor servicer appointed as provided pursuant to this Agreement.
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Servicer Cumulative Loss Event: The Servicer Cumulative Loss Event will
have occurred with respect to a Distribution Date as follows: (i) for the 1st
through the 12th Distribution Dates, if the Loss Percentage for such
Distribution Date is more than 1.25%; (ii) for the 13th through the 24th
Distribution Dates, if the Loss Percentage for such Distribution Date is more
than 1.75%; (iii) for the 25th through the 36th Distribution Dates, if the Loss
Percentage for such Distribution Date is more than 2.75%; (iv) for the 37th
through the 48th Distribution Dates, if the Loss Percentage for such
Distribution Date is more than 3.50%; and (v) for the 49th Distribution Date and
any Distribution Date thereafter, if the Loss Percentage for such Distribution
Date is more than 4.50%.
Servicer Rolling Delinquency Event: The Servicer Rolling Delinquency
Event will have occurred with respect to a Distribution Date if the Rolling
Delinquency Percentage for such Distribution Date is more than 15%.
Servicer Rolling Loss Event: The Servicer Rolling Loss Event will have
occurred with respect to a Distribution Date, if the Annual Loss Percentage is
equal to or more than 1.50%
Servicer Remittance Report: The monthly report prepared by the Servicer
and delivered to the Trustee pursuant to Section 4.01.
Servicing Advances: All reasonable and customary "out-of-pocket" costs
and expenses incurred in the performance by the Servicer of its servicing
obligation, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, including without
limitation advances in respect of real estate taxes and assessments and
insurance premiums on fire, hazard and, if applicable, flood insurance policies,
(ii) any enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property, (iv) compliance with the
obligations under Section 3.04 and (v) expenditures relating to the correction
of a default on any Senior Lien pursuant to Section 3.06 in connection with the
liquidation of a Mortgage Loan.
Servicing Fee Rate: With respect to any Mortgage Loan Group and each
Collection Period, 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers annexed to an
Officer's Certificate furnished to the Trustee by the Servicer, as such list may
from time to time be amended.
Spread Squeeze Condition: The Spread Squeeze Condition will be applied
with respect to Adjustable Rate Group I and Adjustable Rate Group II on an
aggregate basis, for Distribution Dates on or after October 2001, and will be
met with respect to a Distribution Date if the Spread Squeeze Percentage is less
than 2.00% for 13th through 24th Distribution Dates, 2.50% for the 25th through
36th Distribution Dates and 3.00% on and after the 37th Distribution Date. There
is no Spread Squeeze Condition with respect to the Fixed Rate Group.
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Spread Squeeze Overcollateralization Increase Amount: For any
Distribution Date, an amount determined as follows:
(a) if the Spread Squeeze Condition is met for such
Distribution Date, the Spread Squeeze Overcollateralization Increase
Amount for such Distribution Date shall be equal to the product
obtained by multiplying (i) three, (ii) the excess, if any, of the
percentage applicable to such Distribution Date set forth in the
definition of "Spread Squeeze Condition" over the Spread Squeeze
Percentage for such Distribution Date and (iii) the aggregate Principal
Balance of the related Mortgage Loan Group as of the related
Distribution Date; or
(b) if the Spread Squeeze Condition is not met but has
occurred in the prior six months for such Distribution Date, the Spread
Squeeze Overcollateralization Increase Amount for such Distribution
Date shall be equal to (A) the Spread Squeeze Overcollateralization
Increase Amount for the most recent Distribution Date for which the
Spread Squeeze Condition was met minus (B) the product obtained by
multiplying (i) one sixth of the amount determined under clause (A)
above and (ii) the number of consecutive Distribution Dates through and
including the current Distribution Date for which the Spread Squeeze
Condition was not met.
Spread Squeeze Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the product of 12
and the Monthly Excess Cashflow Amount for the related Mortgage Loan Group for
such Distribution Date, and the denominator of which is the aggregate Principal
Balance of the related Mortgage Loan Group and REO Properties as of such
Distribution Date.
Standard & Poor's: Standard & Poor's Rating Service, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors in interest.
Startup Day: As defined in Section 9.16(f).
Statement to Certificateholders: As defined in Section 5.03.
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 42nd Distribution Dates, if the Loss Percentage for such Distribution Date
is 1.75% or less; (ii) for the 43rd through the 54th Distribution Dates, if the
Loss Percentage for such Distribution Date is 2.50% or less; (iii) for the 55th
through the 66th Distribution Dates, if the Loss Percentage for such
Distribution Date is 3.15% or less; and (iv) for any Distribution Date after the
66th Distribution Date, if the Loss Percentage for such Distribution Date is
3.50% 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 10.50% or less.
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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 1.00%.
Step Down Trigger: For any Distribution Date after the 30th
Distribution Date, the Step Down Trigger will have occurred if each of the Step
Down Cumulative Loss Test, the Step 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 on or before the 30th Distribution Date.
Stepped Down Required Overcollateralized Percentage: (a) With respect
to the Fixed Rate Group and any Distribution Date for which the Step Down
Trigger has occurred, a percentage equal to (i) the percentage equivalent of a
fraction, the numerator of which is 3.00% of the aggregate Principal Balance of
the Mortgage Loans in the Fixed Rate Group as of the Cut-off Date, and the
denominator of which is the aggregate Principal Balance of the Mortgage Loans
and REO Properties in the Fixed Rate Group as of such Distribution Date, minus
(ii) the percentage equivalent of a fraction, the numerator of which is the
product of (A) the percentage calculated under clause (i) above minus 6.00%,
multiplied by (B) the number of consecutive Distribution Dates through and
including the Distribution Date for which the Stepped Down Required
Overcollateralized Percentage is being calculated, up to a maximum of six, for
which the Step Down Trigger has occurred, and the denominator of which is six.
(b) With respect to Adjustable Rate Group I and Adjustable Rate
Group II and any Distribution Date for which the Step Down Trigger has occurred,
a percentage equal to (i) the percentage equivalent of a fraction, the numerator
of which is 4.75% of the aggregate Principal Balance of the Mortgage Loans in
the related Adjustable Rate Group as of the Cut-off Date, and the denominator of
which is the aggregate Principal Balance of the Mortgage Loans and REO
Properties in the related Adjustable Rate Group as of such Distribution Date,
minus (ii) the percentage equivalent of a fraction, the numerator of which is
the product of (A) the percentage calculated under clause (i) above minus 9.50%,
multiplied by (B) the number of consecutive Distribution Dates through and
including the Distribution Date for which the Stepped Down Required
Overcollateralized Percentage is being calculated, up to a maximum of six, for
which the Step Down Trigger has occurred, and the denominator of which is six.
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 Loss Percentage for such Distribution Date is
more than 1.25%; (ii) for the 13th through the 24th Distribution Dates, if the
Loss Percentage for such Distribution Date is more than 1.50%; (iii) for the
25th through the 36th Distribution Dates, if the Loss Percentage for such
Distribution Date is more than 2.50%; (iv) for the 37th through the 48th
Distribution Dates, if the Loss Percentage for such Distribution Date is more
than 3.25%; and (v) for the 49th Distribution Date and any Distribution Date
thereafter, if the Loss Percentage for such Distribution Date is more than
4.00%.
Step Up Rolling Delinquency Test: The Step Up Rolling Delinquency Test
will be met with respect to a Distribution Date if the Rolling Delinquency
Percentage for such Distribution Date is more than 12.25%.
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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 1.25%.
Step Up Spread Squeeze Test: The Step Up Spread Squeeze Test will be
met with respect to a Distribution Date if the Spread Squeeze Condition is met
for such Distribution Date or was met for any of the five preceding Distribution
Dates.
Step Up Trigger: For any Distribution Date, the Step Up Trigger will
have occurred if any one of the Step Up Cumulative Loss Test, the Step Up
Rolling Delinquency Test or the Step Up Rolling Loss Test is met, or the Trustee
is notified by the Certificate Insurer, upon which notification the Trustee may
conclusively rely, that PMI Downgrade or Claims Denial Test is met.
Sub-Servicer: Any Person, including an Affiliate of the Servicer, with
whom the Servicer has entered into a Sub-Servicing Agreement and who satisfies
the requirements set forth in Section 3.15 hereof in respect of the
qualification of a Sub-Servicer. The Sub-Servicers with respect to any of the
Mortgage Loans as of the related Cut-off Date are listed on Schedule I attached
to this Agreement.
Sub-Servicing Account: Any segregated account, which shall at all times
be an Eligible Account, established and maintained pursuant to Section 3.02(b)
and entitled "Bankers Trust Company of California, N.A., in trust for the
benefit of Holders of Aames Mortgage Trust 2000-1 Mortgage Pass-Through
Certificates, Series 2000-1, Collection Account". References herein to the
Collection Account shall include any Sub-Servicing Account as the context
requires.
Sub-Servicing Agreement: A written contract between the Servicer and
any Sub-Servicer relating to the servicing and/or administration of certain
Mortgage Loans.
Subsequent Cut-off Date: None.
Subsequent Cut-off Date Principal Balance: None.
Subsequent Mortgage Loan: None.
Subsequent Mortgage Loan Schedule: None.
Subsequent Purchase Price: None.
Subsequent Transfer Agreement: None.
Subsequent Transfer Date: None.
Supplemental Interest Amount: (A) With respect to the Class A-V1
Certificates on any Distribution Date, the sum of (i) the positive excess, if
any, of the amount of interest that would
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have accrued thereon during the related Interest Period calculated at the lesser
of (x) the Class A-V1 Formula Pass-Through Rate and (y) 14%, over the amount of
interest that did accrue thereon at the Class A-V1 Pass-Through Rate and (ii)
any related Supplemental Interest Amount remaining unpaid from a prior
Distribution Date (and in the case of any related Supplemental Interest Amount
remaining unpaid from a prior Distribution Date, interest thereon calculated at
the lesser of (x) the Class A-V1 Formula Pass-Through Rate and (y) 14%, to the
extent lawful) and (B) with respect to the Class A-V2 Certificates on any
Distribution Date, the sum of (i) the positive excess, if any, of the amount of
interest that would have accrued thereon during the related Interest Period
calculated at the lesser of (x) the related Class A-V2 Formula Pass-Through Rate
and (y) 14%, over the amount of interest that did accrue thereon at the Class
A-V2 Pass-Through Rate and (ii) any related Supplemental Interest Amount
remaining unpaid from a prior Distribution Date (and, in the case of any related
Supplemental Interest Amount remaining unpaid from a prior Distribution Date,
interest thereon calculated at the lesser of (x) the related Class A-V2 Formula
Pass-Through Rate and (y) 14%, to the extent lawful). The Certificate Insurance
Policy will not cover any Supplemental Interest Amount.
Supplemental Interest Reserve Fund: The Supplemental Interest Reserve
Fund established and maintained as described in Section 3.21 and entitled
"Bankers Trust Company of California, N.A., as Trustee for Aames Mortgage Trust
2000-1, Mortgage Pass-Through Certificates, Series 2000-1," Supplemental
Interest Reserve Fund."
Target Deficiency: With respect to any Distribution Date and each
Certificate Group, the amount, if any, by which the related Targeted
Overcollateralization Amount exceeds the related Overcollateralization Amount on
such Distribution Date calculated, for this purpose only, after giving effect to
distributions in respect of the related Basic Principal Distribution Amount on
such Distribution Date but prior to any distributions in respect of the related
Extra Principal Distribution Amount on such Distribution Date.
Targeted Overcollateralization Amount: (a) With respect to the Fixed
Rate Group and any Distribution Date, an amount equal to 3.00% of the aggregate
Principal Balance of the Mortgage Loans in the Fixed Rate Group as of the
Cut-off Date, subject to the following: (i) if the Step Up Trigger has occurred,
the Targeted Overcollateralization Amount for the Fixed Rate Group for such
Distribution Date will be an amount equal to 7.50% of the aggregate Principal
Balance of the Mortgage Loans in the Fixed Rate Group as of the Cut-Off Date
plus 50% of the Principal Balance of the Mortgage Loans in the Fixed Rate Group
that are (A) more than 90 days delinquent as of the close of business of the
last Business Day of the calendar month preceding such Distribution Date or (B)
REO Properties and Mortgage Loans subject to foreclosure proceeding; or (ii) if
the Step Up Trigger has not occurred but the Step Down Trigger has occurred, the
Targeted Overcollateralization Amount for the Fixed Rate Group for such
Distribution Date will be an amount equal to the greater of (a) .50% of the
aggregate of the Principal Balances of the Mortgage Loans in the Fixed Rate
Group as of the Cut-Off Date and (b) the lesser of (x) 6.00% of the aggregate
Principal Balance of the Mortgage Loans in the Fixed Rate Group as of the
related Distribution Date and (y) the Stepped Down Required Overcollateralized
Percentage of the aggregate Principal Balance of the Mortgage Loans in the Fixed
Rate Group as of such Distribution Date.
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(b) With respect to either Adjustable Rate Group I and
Adjustable Rate Group II and any Distribution Date, an amount equal to 4.75% of
the aggregate Principal Balance of the Mortgage Loans in the related Adjustable
Rate Group as of the Cut-off Date, subject to the following: (i) if the Step Up
Trigger has occurred, the Targeted Overcollateralization Amount for such
Adjustable Rate Group for such Distribution Date will be an amount equal to
11.875% of the aggregate Principal Balance of the Mortgage Loans in the related
Adjustable Rate Group as of the Cut-Off Date plus 50% of the Principal Balance
of the Mortgage Loans in the related Adjustable Rate Group that are (A) more
than 90 days delinquent as of the close of business of the last Business Day of
the calendar month preceding such Distribution Date or (B) REO Properties and
Mortgage Loans subject to foreclosure proceeding; (ii) if the Step Up Spread
Squeeze Test is met or has occurred in the prior six months, the Targeted
Overcollateralization Amount for such Distribution Date with respect to
Adjustable Rate Group I and Adjustable Rate Group II for such Distribution Date
will be an amount equal to the sum of (A) the related Targeted
Overcollateralization Amount for such Distribution Date determined as though the
related Step Up Spread Squeeze Test were not met plus (B) the related Spread
Squeeze Overcollateralization Increase Amount or (iii) if neither the Step Up
Trigger nor the Step Up Spread Squeeze Test has occurred but the Step Down
Trigger has occurred, the Targeted Overcollateralization Amount for such
Adjustable Rate Group for such Distribution Date will be an amount equal to the
greater of (a) .50% of the aggregate of the Principal Balances of the Mortgage
Loans in such Adjustable Rate Group as of the Cut-Off Date and (b) the lesser of
(x) 9.50% of the aggregate Principal Balance of the Mortgage Loans in such
Adjustable Rate Group as of the related Distribution Date and (y) the Stepped
Down Required Overcollateralized Percentage of the aggregate Principal Balance
of the Mortgage Loans in such Adjustable Rate Group as of such Distribution
Date.
The Certificate Insurer may, in its sole discretion, at the request of
the Seller, modify the Targeted Overcollateralization Amount above for the
purpose of reducing or eliminating, in whole or in part, the application of any
Step Up Trigger, and the Trustee and the Rating Agencies shall be notified in
writing of such modification prior to the related Distribution Date and such
modification shall not result in a downgrading of the then-current ratings of
the Certificates.
Transfer Affidavit: The affidavit to be delivered by any transferee of
an interest in a Class R Certificate pursuant to Section 6.02(b), to be
substantially in the form attached hereto as Exhibit G.
Transferor Affidavit: The affidavit to be delivered by any transferor
of an interest in a Class R Certificate pursuant to Section 6.02(b), to be
substantially in the form attached hereto as Exhibit K.
Transition Cost: Any documented expenses reasonably incurred by Trustee
in connection with a transfer of servicing from the Servicer to a successor
servicer as successor servicer pursuant to Section 8.02, but not to exceed
$5,000 with respect to any single succession.
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Trust: The trust created by this Agreement and the corpus thereof,
which consists of, to the extent described herein, the Mortgage Loans, such
assets as shall from time to time be identified or shall be required by this
Agreement to be deposited in the Collection Account, the Certificate Account,
the Policy Payments Account, the Prefunding Account or the Capitalized Interest
Account or invested in Permitted Investments in accordance with this Agreement,
all rights under any insurance policy covering a Mortgage Loan or the related
Mortgaged Property, including the PMI Policy, and property and any proceeds
thereof that secured a Mortgage Loan and that has been acquired by foreclosure,
deed in lieu of foreclosure or by a comparable conversion, and the Certificate
Insurance Policy.
Trust Insurance Proceeds: Insurance Proceeds that (a) are applied by
the Servicer to reduce the Principal Balance of the related Mortgage Loan or pay
interest due on the related Mortgage Loan and (b) not applied to the restoration
or repair of the related Mortgaged Property or released to the related Mortgagor
in accordance with the Servicer's normal servicing procedures or the terms of
the related Mortgage Loan.
Trust Parties: As defined in Section 5.04.
Trustee: Bankers Trust Company of California, N.A., a national banking
association, and its successors in interest or any successor trustee appointed
as provided pursuant to this Agreement.
Trustee Fee: With respect to any Distribution Date and each Mortgage
Loan Group, 1/12 of the product of 0.0075% and the aggregate Principal Balance
of the Mortgage Loans in such Mortgage Loan Group as of the beginning of the
related Collection Period (or, in the case of the first Distribution Date, the
aggregate Principal Balance of the related Mortgage Loans as of the Cut-off
Date).
Vice President: Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
Voting Interest: The portion of the voting interests of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Interests shall be allocated to the Class C
Certificates (such Voting Rights to be allocated among the Holders of
Certificates of such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Interests shall be allocated to the Class P
Certificates, (c) 1% of all Voting Interests shall be allocated to the Class R
Certificates in the aggregate, or if separate Class R-1 and Class R-2
Certificates are issued, 0.50% to each such Class (such Voting Interests to be
allocated among the Holders of Certificates of each such Class in accordance
with their respective Percentage Interests), and (d) the remaining Voting
Interests shall be allocated among Holders of the Classes of Offered
Certificates in proportion to the Certificate Principal Balances of their
respective Offered Certificates on such date. Each Certificateholder of a Class
will have a Voting Interest equal to the product of the Voting Interest to which
such Class is collectively entitled and the Percentage Interest in such Class
represented by such Holder's Certificates. With respect to any provision hereof
providing for action, consent or approval of each Class of Certificates or
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specified Classes of Certificates, each Certificateholder of a Class will have a
Voting Interest in such Class equal to such Holder's Percentage Interest in such
Class.
Weighted Average Coupon Cap: With respect to any Distribution Date and
the Class A-V1 Certificates, the per annum rate equal to the lesser of (A) the
weighted average of the Pass-Through Rates of the Class LT-AV1 and Class LT-MV1
REMIC I Regular Interests, where, after the 12th Distribution Date, the
Pass-Through Rate of the Class LT-MV1 REMIC I Regular Interest is first reduced
by 0.50%, and (B) 14% and, with respect to any Distribution Date and the Class
A-V2 Certificates, the per annum rate equal to the lesser of (A) the weighted
average of the Pass-Through Rates of the Class LT-AV2 and Class LT-MV2 REMIC I
Regular Interests, where, after the 12th Distribution Date the Pass-Through Rate
of the Class LT-MV2 REMIC I Regular Interest is first reduced by 0.50%, and (B)
14%.
Section 1.02 Interest Calculations. All calculations of interest at the
Mortgage Loan Rate that are made in respect of the Principal Balance of a
Mortgage Loan, shall be made on a daily basis using a 360-day year of twelve
30-day months.
All calculations of interest on the Fixed Rate Group Certificates will
be computed on the basis of a 360-day year of twelve 30-day months and all
calculations of interest on the Class A-V1 and Class A-V2 Certificates will be
made on the basis of the actual number of days elapsed in the related Interest
Period and a year of 360 days.
Section 1.03 Determination of Material Adverse Effect. Whenever a
determination is to be made under this Agreement as to whether a given action,
course of conduct, event or set of facts or circumstances could or would have a
material adverse effect on the Trust or the Certificateholder (or any similar or
analogous determination), such determination shall be made without giving effect
to the insurance provided by the Certificate Insurance Policy.
ARTICLE II
CONVEYANCE OF THE TRUST
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of the Trust. The Seller, concurrently with the
execution and delivery of this Agreement, does hereby irrevocably sell,
transfer, assign, set over and otherwise convey to the Trustee, in trust for the
benefit of the Certificateholders, without recourse (except as otherwise
explicitly provided for herein), all of its right, title and interest in and to
the Trust, including specifically, without limitation, the Mortgage Loans, the
Mortgages, the Mortgage Files and the Mortgage Notes, including all interest and
principal (whether in the form of payments by Mortgagors or other proceeds)
received or deemed to be received by the Seller on or with respect to the
Mortgage Loans on or after the related Cut-off Date net of amounts in respect of
interest accrued on the Mortgage Loans in periods prior to the related Cut-off
Date, (whether in the nature of amounts held by the Seller for application on
behalf of the related Mortgagor as a Monthly Mortgage Payment that is due on any
date on or after the related Cut-off Date or otherwise), and the Class P Deposit
together with all of its right, title and interest in and to the proceeds
received on or after the related Cut-off Date of any related insurance policies.
In
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addition, on or prior to the Closing Date the Seller shall (i) cause the
Certificate Insurance Policy and the PMI Policy to be delivered to the Trustee
and (ii) deposit the Closing Date Deposit in the Collection Account.
In the event that, notwithstanding the intent of the parties hereto to
effect a sale and assignment of the Trust by the Seller to the Trustee, such
sale and assignment is deemed to constitute a pledge of security for a loan, it
is the intent of this Agreement that the Seller shall be deemed to have granted
to the Trustee for the benefit of the Certificateholders a first priority
perfected security interest in all of the Seller's right, title and interest in
and to the Mortgage Loans, the Mortgages, the Mortgage Files and the Mortgage
Notes, all payments of principal or interest on the Mortgage Loans received on
or after the related Cut-off Date net of amounts in respect of interest accrued
on the Mortgage Loans in periods prior to the related Cut-off Date, all other
payments (exclusive of assumption fees, late payment charges, charges for checks
returned for insufficient funds, if any, and extension and other administrative
charges other than Prepayment Charges) made in respect of such Mortgage Loans on
or after the related Cut-off Date and all proceeds of any thereof, including all
amounts on deposit in the Certificate Account, the Collection Account, the
Policy Payments Account, the Prefunding Account and the Capitalized Interest
Account and amounts invested in Permitted Investments (but excluding all
investment income with respect to the Prefunding Account and Capitalized
Interest Account), and that this Agreement shall constitute a security agreement
under applicable law. The Seller shall file financing statements and
continuation statements as necessary to maintain the perfection of such security
interest.
The Company confirms to the Trustee that it has caused its computer
records relating to the Initial Mortgage Loans to indicate by a code that the
Initial Mortgage Loans have been sold to the Trustee on behalf of the Trust and
constitute part of the Trust in accordance with the terms of this Agreement. The
Company further confirms to the Trustee that it will cause its computer records
relating to each Subsequent Mortgage Loan to indicate by a code that such
Subsequent Mortgage Loan has been sold to the Trustee on behalf of the Trust and
that it constitutes part of the Trust in accordance with the terms of this
Agreement. The Company confirms that it will treat the conveyance transactions
contemplated hereby and in each Subsequent Transfer Agreement as sales in
accordance with generally accepted accounting principles and will reflect such
transactions as sales on its primary accounting records.
In connection with each such sale and assignment, the Company, in its
capacity as Seller hereunder, does hereby deliver to, and deposit with, the
Trustee the originals of the following documents or instruments with respect to
each Mortgage Loan so assigned:
(a) The original Mortgage Note, with all intervening
endorsements sufficient to show a complete chain of endorsement to the
Seller, endorsed (which endorsement may be by manual or facsimile
signature) by the Seller without recourse to the order of the Trustee
in the following form: "Pay to the order of Bankers Trust Company of
California, N.A., in trust for the benefit of holders of Aames Mortgage
Trust 2000-1 Mortgage Pass-Through Certificates, Series 2000-1, without
recourse";
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(b) The original Mortgage with evidence of recording indicated
thereon;
(c) The original assignment of the Mortgage executed by the
Seller in recordable form;
(d) Originals of all assumption, modification and substitution
agreements in those instances where the terms or provisions of a
Mortgage or Mortgage Note have been modified or such Mortgage or
Mortgage Note has been assumed;
(e) Originals of all intervening mortgage assignments with
evidence of recording indicated thereon sufficient to show a complete
chain of assignment from the originator of the Mortgage Loan to the
Seller; and
(f) Original lender's title insurance policy issued on the
date of the origination of such Mortgage Loan or a true copy thereof
or, if such original lender's title insurance policy has been lost, a
copy thereof certified by the appropriate title insurer to be true and
complete or, if such lender's title insurance policy has not been
issued as of the Closing Date, a marked up commitment (binder) to issue
such policy.
As promptly as practicable subsequent to the Closing Date, and in any
event, within 30 days thereafter, the Company, in its capacity as initial
Sub-Servicer shall (i) affix the Trustee's name to each assignment of Mortgage,
as the assignee thereof in the following form: "Bankers Trust Company of
California, N.A., in trust for the benefit of holders of Aames Mortgage Trust
2000-1 Mortgage Pass-Through Certificates, Series 2000-1, without recourse",
(ii) cause such assignment to be in proper form for recording in the appropriate
public office for real property records, and (iii) cause to be delivered for
recording in the appropriate public office for real property records the
assignments of the Mortgages to the Trustee, except that, with respect to any
assignments of Mortgage as to which the Servicer has not received the
information required to prepare such assignment in recordable form, the Servicer
shall be obligated to prepare and to deliver such assignment for such recording
as soon as practicable after receipt of such information and in any event within
30 days after receipt thereof (and in no event more than one year after the
Closing Date) and that the Servicer need not cause to be recorded any assignment
that relates to a Mortgage Loan in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered to the Trustee at Seller's expense
to the effect that the recordation of such assignment is not necessary to
protect the Trustee's and the Certificateholders' interest in the related
Mortgage Loan; provided, however, notwithstanding the delivery of any legal
opinions, each assignment of mortgage shall be recorded if the Certificate
Insurer reasonably determines based upon a change of any law (including case
law) or fact, including any fact referenced or assumed in any such Opinion of
Counsel, that it no longer is satisfied with the conclusion drawn in such
Opinion of Counsel, and delivers notice to such effect to the Seller and the
Seller does not promptly deliver to the Certificate Insurer a new Opinion of
Counsel reasonably satisfactory to the Certificate Insurer reaffirming each of
the opinions contained in the original Opinion of Counsel delivered at the
Closing Date in lieu of such recordation. All recording of assignments of
mortgages shall be at the expense of the Seller without any right of
reimbursement from the Trust. Notwithstanding anything herein to the contrary,
in the event that
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the Certificate Insurer, in its reasonable discretion, determines that the laws
of a particular jurisdiction require recordation of assignments of Mortgage
Loans in order to protect the interests of the Trust, the Certificateholders and
the Certificate Insurer in the Mortgage Loans, then the Seller shall be required
to record assignments of Mortgage Loans in such jurisdiction.
In addition, in connection with such sales and assignments, the
Company, in its capacity as Seller hereunder, does hereby deliver to, and
deposit with, the Trustee the Certificate Insurance Policy for the benefit of
the Certificateholders.
If the Company cannot deliver the original Mortgage or any intervening
mortgage assignment with evidence of recording thereon concurrently with the
execution and delivery of this Agreement solely because of a delay caused by the
public recording office where such original Mortgage or mortgage assignment has
been delivered for recordation, the Company shall deliver to the Trustee an
Officer's Certificate, with a photocopy of such Mortgage or mortgage assignment,
as the case may be, attached thereto, stating that such original Mortgage or
mortgage assignment has been delivered to the appropriate public recording
official for recordation. The Company shall promptly deliver to the Trustee such
original Mortgage or intervening mortgage assignment with evidence of recording
indicated thereon upon receipt thereof from the public recording official. If
the Company within six months from the Closing Date shall not have received such
original Mortgage or intervening mortgage assignment from the public recording
official, it shall obtain, and deliver to the Trustee within eight months from
the Closing Date, a copy of such original Mortgage or mortgage assignment
certified by such public recording official to be a true and complete copy of
such original Mortgage or mortgage assignment as recorded by such public
recording office.
The costs relating to the delivery of the documents specified in this
Section shall be borne by the Seller.
Section 2.02 Conveyance of the Subsequent Mortgage Loans; Fixed Price
Contract. Subject to the conditions set forth in the paragraphs below, in
consideration of the Trustee's delivery on the Closing Date or related
Subsequent Transfer Dates to or upon the order of the Seller of the Subsequent
Purchase Price of the related Subsequent Mortgage Loans from amounts on deposit
in the Prefunding Account (or other amounts payable to the Seller if such
purchases of all Subsequent Mortgage Loans occur on the Closing Date) with
respect to the related Mortgage Loan Group, the Seller shall, from time to time,
on the Closing Date or any Subsequent Transfer Date, sell, transfer, assign, set
over and otherwise convey without recourse, to the Trustee, all right, title and
interest of the Seller in and to each Subsequent Mortgage Loan identified on the
Subsequent Mortgage Loan Schedule attached to the related Subsequent Transfer
Agreement delivered by the Seller on the Closing Date or such Subsequent
Transfer Date, including all of its right, title and interest in and to
principal and interest (whether in the form of payments by Mortgagors or other
proceeds) received or deemed to be received by the Seller on each such
Subsequent Mortgage Loan on and after the related Subsequent Cut-off Date, net
of amounts in respect of interest accrued on such Subsequent Mortgage Loans in
periods prior to the related Subsequent Cut-off Date (whether in the nature of
amounts held by the Seller for application on behalf of the related Mortgagor as
a Monthly Mortgage Payment that is due on any date on or
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after the related Subsequent Cut-off Date or otherwise) plus all items with
respect to such Subsequent Mortgage Loan to be delivered pursuant to Section
2.01 and other items in the related Mortgage File; provided, however, that the
Seller reserves and retains all of its right, title and interest in and to
principal (including prepayments) and interest collected on each such Subsequent
Mortgage Loan prior to the related Subsequent Cut-off Date (except for amounts
held by the Seller for application on or after the related Subsequent Cut-off
Date). The transfer by the Seller of the Subsequent Mortgage Loans set forth on
the Subsequent Mortgage Loan Schedule to the Trustee shall be absolute and shall
be intended by the parties hereto to be treated as a sale by the Seller. On or
before the last day of the Funding Period, the Seller shall convey to the
Trustee pursuant to this Section 2.02 the lesser of: (i) all Mortgage Loans then
in its possession that satisfy the requirements of this Section 2.02 or (ii) the
maximum principal balance of Mortgage Loans as determined by Seller that satisfy
the requirements of this Section 2.02 whose aggregate Subsequent Purchase Price
does not exceed the Prefunding Account Deposit. Subsequent Mortgage Loans to be
conveyed on a given Subsequent Transfer Date must have an aggregate Subsequent
Cut-off Date Principal Balance of not less than $500,000; provided, however,
that the Subsequent Mortgage Loans to be conveyed on the final Subsequent
Transfer Date may have an aggregate Subsequent Cut-off Date Principal Balance of
less than $500,000.
In the event that, notwithstanding the intent of the parties hereto to
effect a sale and assignment of the Subsequent Mortgage Loans on the related
Subsequent Transfer Date by the Seller to the Trustee, such sale and assignment
will be deemed to constitute a pledge of security for a loan, it is the intent
of this Agreement that the Seller shall be deemed to have granted to the Trustee
for the benefit of the Certificateholders a first priority perfected security
interest in all of the Seller's right, title and interest in and to the
Subsequent Mortgage Loans, the Mortgages, the Mortgage Files and the Mortgage
Notes, all payments of principal and interest on the Subsequent Mortgage Loans
received on or after their respective Subsequent Cut-off Dates, net of amounts
in respect of interest accrued on such Subsequent Mortgage Loans in periods
prior to the related Subsequent Cut-off Date, all other payments (provided that
the parties to this Agreement acknowledge that the Servicer is entitled to
receive all assumption fees, late payment charges, charges for checks returned
for insufficient funds, if any, and extension and other administrative charges
other than Prepayment Charges) made in respect of such Subsequent Mortgage Loans
on or after the related Subsequent Cut-off Date, and that this Agreement and the
related Subsequent Transfer Agreement shall each constitute a security agreement
with respect to the related Subsequent Mortgage Loans under applicable law. The
Seller shall file financing statements and continuation statements as necessary
to maintain the perfection of such security interest.
The amount released to the Seller from the Prefunding Account on any
Subsequent Transfer Date (or from other amounts payable to the Seller on the
Closing Date) in connection with any conveyance of Subsequent Mortgage Loans to
be included in the Fixed Rate Group, Adjustable Rate Group I or Adjustable Rate
Group II shall be equal to the aggregate of the related Subsequent Purchase
Prices for such related Subsequent Mortgage Loans to be included in such related
Mortgage Loan Group, which related amounts, in the aggregate, shall not exceed
the allocated Prefunding Account Deposit for such related Mortgage Loan Group.
The amount so released to the Seller in connection with any conveyance of
Subsequent Mortgage Loans shall,
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for federal income tax purposes, be considered cash contributed to REMIC I by
the Seller and used by the Trustee to acquire the related Subsequent Mortgage
Loans pursuant to a fixed price contract established pursuant to this Section
2.02.
On the Closing Date or other related Subsequent Transfer Date, the
Seller shall transfer to the Trustee the Subsequent Mortgage Loans and the other
property and rights related thereto described in the first paragraph in this
section only upon the satisfaction of each of the following conditions on or
prior to the related Subsequent Transfer Date:
(a) the Seller shall provide the Trustee and the Certificate
Insurer with an Addition Notice and shall provide any information
reasonably requested by the Trustee or the Certificate Insurer with
respect to the Subsequent Mortgage Loans;
(b) the Seller shall deliver to the Trustee, the Certificate
Insurer and the Rating Agencies a duly executed Subsequent Transfer
Agreement and any other related documentation in the forms of the
exhibits listed thereon;
(c) the Seller shall deposit in the Collection Account all
collections in respect of the Subsequent Mortgage Loans received or
deemed received by the Seller on or after the related Subsequent
Cut-off Date (whether in the nature of amounts held by the Seller for
later application on behalf of the related Mortgagor in respect of a
Monthly Payment due on or after the related Subsequent Cut-off Date or
otherwise) except for amounts in respect of interest accrued on such
Subsequent Mortgage Loans prior to the related Cut-off Date;
(d) the Seller shall certify that, as of the Subsequent
Transfer Date, the Seller was not insolvent, was not made insolvent by
such transfer and is not aware of any pending insolvency;
(e) the Seller shall certify that such addition of Subsequent
Mortgage Loans will not result in a material adverse tax consequence to
the Trust or the Certificateholders; and
(f) the Funding Period shall not have expired.
In addition, the Seller will provide the Certificate Insurer, the
Rating Agencies and the Trustee with data regarding all Subsequent Mortgage
Loans to be transferred to the Trust on any Subsequent Transfer Date at least 10
Business Days prior to the end of the Funding Period or, if such Subsequent
Transfer Date is the Closing Date, on the Closing Date. No later than the end of
the Funding Period, the following conditions shall have been satisfied with
respect to all Subsequent Mortgage Loans to be transferred to the Trust on any
Subsequent Transfer Date:
(A) the Seller shall have delivered to the Certificate
Insurer, the Rating Agencies and the Trustee an Officer's Certificate
confirming the satisfaction of each
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condition precedent specified in this Section 2.02 and in the related
Subsequent Transfer Agreements;
(B) the Seller shall have delivered to the Certificate
Insurer, the Rating Agencies and the Trustee Opinions of Counsel with
respect to the transfer of all of the Subsequent Mortgage Loans to the
Trust on any Subsequent Transfer Date substantially in the form of the
Opinions of Counsel delivered to the Trustee and the Certificate
Insurer on the Closing Date regarding bankruptcy, corporate and tax
matters;
(C) the Trustee shall deliver to the Rating Agencies, the
Certificate Insurer, the Rating Agencies and the Seller an Opinion of
Counsel with respect to the enforceability of each of the Subsequent
Transfer Agreements substantially in the form of the Opinion of Counsel
delivered to the Seller and the Certificate Insurer on the Closing
Date; and
(D) the Certificate Insurer shall deliver to the Seller, the
Trustee and the Rating Agencies a written notice confirming the
Certificate Insurer's consent and approval to the addition of all
Subsequent Mortgage Loans purchased by the Trust on any Subsequent
Transfer Date.
On or prior to the Closing Date, the Seller shall provide to the
Trustee and the Certificate Insurer a schedule of mortgage loans that are
expected to be Subsequent Mortgage Loans, and Subsequent Mortgage Loans
transferred to the Trust shall be taken only from such schedule; provided,
however, if any such identified mortgage loans do not satisfy the requirements
of Subsequent Mortgage Loans as set forth in this Section 2.02 or if any such
mortgage loans are rejected as Subsequent Mortgage Loans by the Certificate
Insurer, mortgage loans acceptable to the Certificate Insurer may be substituted
for such defective or rejected mortgage loans. The Seller shall certify that the
Subsequent Mortgage Loans will be transferred to the Trust in accordance with
the foregoing and that such Subsequent Mortgage Loans satisfy the requirements
of Subsequent Mortgage Loans as set forth in this Section 2.02 as of the Closing
Date.
Subject to Section 3.16, if all of the Subsequent Mortgage Loans are
transferred to the Trust on the Closing Date, then the remaining portion of the
Prefunding Account Deposit will be deposited into the Certificate Account and
held there, without investment thereof, until the first Distribution Date. On
such first Distribution Date, such amounts will be deemed to comprise a portion
of the Principal Distribution Amount and will be distributable to the
Certificateholders.
Section 2.03 Acceptance by the Trustee; Repurchase or Substitution of
Mortgage Loans. The Trustee acknowledges the sale and assignment to the Trust
and receipt by it of the original Mortgage Notes, Assignments and Mortgages
pursuant to this Agreement and the delivery to it of the Certificate Insurance
Policy and the PMI Policy, and subject to (i) the provisions of the penultimate
paragraph of Section 2.01, (ii) the review provided for in this Section of the
documents referred to in clauses (a) through (f) of Section 2.01 and (iii)
delivery of the Officer's Certificates pursuant to Section 2.01, declares that
it will hold the Trust in trust upon the terms herein set forth for the use and
benefit of all present and future Certificateholders. The Trustee agrees, for
the benefit of Certificateholders, to review each Mortgage File within 45
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days after the Closing Date (or, 45 days after the Subsequent Transfer Date,
with respect to the Subsequent Mortgage Loans) to determine whether the
documents described in Section 2.01(a)-(c), (e) and (f) have been executed and
received, and whether such documents relate to the Mortgage Loans identified in
the Mortgage Loan Schedule, or the Subsequent Mortgage Loan Schedule, as
applicable, and in so doing the Trustee may rely on the purported due execution
and genuineness of any such document and on the purported genuineness of any
signature thereon. If within such 45-day period the Trustee finds any document
constituting a part of a Mortgage File not to have been executed or received or
to be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule
or the Subsequent Mortgage Loan Schedule, as applicable, the Trustee shall
promptly notify the Seller of such findings and shall provide a copy of such
notice to the Certificate Insurer. The Seller shall have a period equal to the
lesser of (i) 60 days from the date of such notice and (ii) 90 days from the
Trustee's discovery of the defect to correct or cure any such defect.
Notwithstanding the second paragraph of Section 9.01, the Trustee shall be under
no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
If the Trustee has notified the Seller of a defect in a Mortgage File
that materially and adversely affects the value of the related Mortgage Loan or
the interests of the Certificateholders or the Certificate Insurer in the
related Mortgage Loan, and such defect remains uncured after such 60-day or
90-day period, the Seller shall, (i) in the case of a defect consisting solely
of the failure of the Company to deliver the original Mortgage or any
intervening mortgage assignment with evidence of recording thereon for reasons
set forth in Section 2.01, on the first Deposit Date occurring after the
expiration of eight months from the Closing Date, and (ii) in the case of all
other defects, on the Deposit Date occurring not later than 60 days after
receipt of notice of such defect from the Trustee and 90 days from the Trustee's
discovery of the defect, as the case may be, either (I) repurchase the related
Mortgage Loan (including any property acquired in respect thereof and any
insurance policy or current or future insurance proceeds with respect thereto)
from the Trust at a price equal to the Purchase Price, which shall be
accomplished by deposit of monies by the Seller in the Certificate Account on
such Deposit Date, or (II) substitute one or more Qualified Replacement Mortgage
Loans for the related Mortgage Loan.
Upon receipt by the Trustee of an Officer's Certificate of the Servicer
to the effect that the Purchase Price for a Defective Mortgage Loan (other than
a Defective Mortgage Loan that is a Deleted Mortgage Loan) has been deposited in
the Certificate Account, and upon confirmation by the Trustee that such Purchase
Price has been received by it, the Trustee shall execute and deliver such
instrument of transfer or assignment presented to it by the Seller, in each case
without recourse, as shall be necessary to vest in the Seller legal and
beneficial ownership of such repurchased Defective Mortgage Loan (including any
property acquired in respect thereof or insurance policy or current or future
insurance proceeds with respect thereto).
Payments received with respect to Qualified Replacement Mortgage Loans
in the Collection Period prior to the Deposit Date on which such substitution
occurs will not be part of the Trust and will be retained by the Seller. For the
Distribution Date following the Deposit Date
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on which such substitution occurs, distributions to Certificateholders will
reflect the payments received on such Deleted Mortgage Loan in the related
Collection Period representing amounts due or accrued thereon prior to such
Deposit Date, and the Seller shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. In the case of a
Qualified Replacement Mortgage Loan, the Mortgage File relating thereto shall be
delivered to the Trustee and the amount, if any, by which the Principal Balance
of the related Deleted Mortgage Loan as of the related Deposit Date exceeds the
Principal Balance of the Qualified Replacement Mortgage Loan as of the first day
of the related Collection Period shall be remitted by the Seller to the Trustee
for deposit in the Certificate Account on the Deposit Date on which the
substitution occurs. For purposes of this Agreement, any such amount so
deposited in the Certificate Account shall be deemed a prepayment of the related
Deleted Mortgage Loan received by the Servicer as of the prior Determination
Date. Upon receipt by the Trustee of an Officer's Certificate of the Seller
certifying that the Qualified Replacement Mortgage Loan conforms to the
requirements of this Agreement and (a) written notification of such deposit
signed by a Servicing Officer and (b) the new Mortgage File (containing all of
the documents referred to in clauses (a), (b), (c), (d), (e) and (f) of Section
2.01), the Trustee shall release or cause to be released to the Seller the
Mortgage File related to the Deleted Mortgage Loan or property and shall execute
and deliver or cause to be executed and delivered such instrument of transfer or
assignment presented to it by the Seller, without recourse, as shall be
necessary to vest in the Seller all of the legal and beneficial ownership of
such Deleted Mortgage Loan or property and the Trustee shall have no further
responsibility with respect to said Mortgage File. In addition, the Trustee
shall assign to the Seller any of the Trustee's rights under the PMI Policy in
respect of any such Deleted Mortgage Loan released to the Seller. It is
understood and agreed that the obligation of the Seller to substitute a
Qualified Replacement Mortgage Loan for or repurchase any Defective Mortgage
Loan (or any property acquired in respect thereof or insurance policy or current
or future insurance proceeds with respect thereto) shall constitute the sole
remedy against it respecting such defect available to the Certificateholders,
the Certificate Insurer, the PMI Insurer or the Trustee, and such obligation on
the part of the Seller shall survive any resignation or termination of the
Company as Servicer under this Agreement. Notwithstanding the foregoing, a
substitution by the Seller for a defect in a constituent document will not be
made unless the Trustee and the Certificate Insurer receive an Officer's
Certificate certifying that the Qualified Replacement Mortgage Loan conforms to
the requirements of this Agreement and an Opinion of Counsel that such
substitution will not be a "prohibited transaction" as defined in Section
860F(a)(2) of the Code. Any substitution must be effected not later than two
years after the Closing Date, or within such longer period of time as may be
permitted under the REMIC Provisions for substitution of mortgage loans.
On or prior to the 90th day after the Closing Date (or the 90th day
after the applicable Subsequent Transfer Date with respect to the Subsequent
Mortgage Loans), the Trustee shall certify to the Certificate Insurer, the
Seller and the Servicer that it has received all of the documents referred to in
clauses (a) (b), (c), (e) and (f) of Section 2.01 and that all corrections or
curative actions required to be taken by the Seller within the 60-day or 90-day
period referred to in the first paragraph of this Section have been completed or
effected, or the related Mortgage Loans have been repurchased or substituted, in
accordance with the provisions of this Section or, if any deficiencies in the
Mortgage Files or other omissions of the Seller with respect to the
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Mortgage Files are known to the Trustee at the time of such certification, the
Trustee shall make such certification only with respect to those Mortgage Loans
as to which no such defects or omissions are known, and shall qualify such
certification with respect to the remaining Mortgage Loans, identifying the
related defects or omissions. Thereafter, the Trustee shall provide the
Certificate Insurer, the Seller and the Servicer with monthly exception reports
indicating the status of any exceptions until all such exceptions have been
eliminated. Such monthly exception reports shall be distributed by the Trustee
on the related Distribution Date with the Statement to Certificateholders.
Section 2.04 Representations and Warranties Regarding the Servicer and
the Seller. (a) The Company, as Seller, hereby represents and warrants to the
Trustee, the Servicer, the Certificate Insurer and the Certificateholders that,
as of the Closing Date:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
California. The Company has the power and authority to execute and
deliver this Agreement and to perform its obligations in accordance
herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all
necessary corporate action; this Agreement evidences the valid and
binding obligation of the Company enforceable against the Company in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally or the application of
equitable principles in any proceeding, whether at law or in equity;
and the consummation of the transactions contemplated hereby will not
result in the breach of any terms or provisions of the articles of
incorporation or by-laws of the Company or result in the breach of any
term or provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any material
agreement, indenture or loan or credit agreement or other material
instrument to which the Company or its property is subject, or result
in the violation of any law, rule, regulation, order, judgment or
decree to which the Company or its property is subject.
(ii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency, that are necessary in connection with the execution and
delivery by the Company of this Agreement, have been duly taken, given
or obtained, as the case may be, are in full force and effect, are not
subject to any pending proceedings or appeals (administrative, judicial
or otherwise) and either the time within which any appeal therefrom may
be taken or review thereof may be obtained has expired or no review
thereof may be obtained or appeal therefrom taken, and are adequate to
authorize the consummation of the transactions contemplated by this
Agreement on the part of the Company and the performance by the Company
of its obligations under this Agreement;
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(iii) There is no action, suit, proceeding or investigation
pending or, to the best of the Company's knowledge, threatened against
the Company that, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on
its business substantially as now conducted, or in any material
liability on the part of the Company or that would draw into question
the validity of this Agreement or the Mortgage Loans or of any action
taken or to be taken in connection with the obligations of the Company
contemplated herein, or that would be likely to impair the ability of
the Company to perform under the terms of this Agreement;
(iv) The Company is not in default with respect to any order
or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Company or its
properties or might have consequences that would adversely affect its
performance hereunder;
(v) The transfer, assignment and conveyance of the Mortgage
Loans by the Company, as Seller, pursuant to this Agreement are not
subject to the bulk transfer laws or any similar statutory provisions
in effect in any applicable jurisdiction and are not being transferred
with the intent to hinder, delay or defraud any creditors; and
(vi) The collection practices used by the Company are in all
material respects legal, proper, prudent and customary in the home
equity mortgage loan servicing business.
(b) The Servicer hereby represents and warrants to the Trustee, the Seller, the
Certificate Insurer and the Certificateholders that, as of the Closing Date:
(i) The Servicer is a corporation licensed as a mortgage
banker duly organized, validly existing and in good standing under the
laws of the state of its incorporation and has, and had at all relevant
times, full corporate power to service the Mortgage Loans, to own its
property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement. The Servicer has
all necessary licenses and is qualified to transact business in and is
in good standing under the laws of each state where a Mortgaged
Property is located or is otherwise exempt under applicable law from
such qualification or is otherwise not required under applicable law to
effect such qualification and no demand for such qualification has been
made upon the Servicer by any state having jurisdiction;
(ii) The execution and delivery of this Agreement by the
Servicer and the performance by it of and compliance with the terms of
this Agreement will not violate the Servicer's articles 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 Servicer is a
party or which may be applicable to the Servicer or any of its assets;
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(iii) The Servicer has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement to
be consummated by it, 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 other parties hereto, constitutes a valid, legal and
binding obligation of the Servicer, 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);
(iv) The Servicer is not in violation of, and the execution
and delivery of this Agreement by the Servicer and the performance by
it 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 governmental
agency having jurisdiction, which violation would materially and
adversely affect the condition (financial or otherwise) or operations
of the Servicer or any of its properties or materially and adversely
affect the performance of any of its duties hereunder;
(v) There are no actions or proceedings against, or
investigations of, the Servicer pending or, to the knowledge of the
Servicer, threatened, before any court, administrative agency or other
tribunal (A) that, if determined adversely, would prohibit its entering
into this Agreement, (B) seeking to prevent 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 Servicer of any of its obligations under, or the
validity or enforceability of, this Agreement;
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Servicer of, or compliance by the Servicer with,
this Agreement, 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;
(vii) No Officer's Certificate, statement, report or other
document prepared by the Servicer 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;
(viii) The Servicer believes that the Servicing Fee Rate
provides a reasonable level of base compensation to the Servicer for
servicing the Mortgage Loans on the terms set forth herein; and
(ix) The transactions contemplated by this Agreement are in
the ordinary course of business of the Servicer.
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(x) Each Sub-Servicer engaged by the Servicer has obtained all
licenses and approvals required under state or federal law to service
the Mortgage Loans specified in the Sub-Servicing Agreement to which
the Sub-Servicer is a party.
(c) The representations and warranties set forth in this Section shall
survive the sale and assignment of the Mortgage Loans to the Trust and the
issuance, sale and delivery of the Certificates. Upon discovery of a breach of
any of the foregoing representations and warranties that materially and
adversely affects the value of such Mortgage Loans or the interests of the
Certificateholders or the Certificate Insurer in such Mortgage Loans, the party
discovering such breach shall give prompt written notice to the other parties
and the Certificate Insurer. Within 60 days of its discovery or its receipt of
notice of breach, the Company or the Servicer, as the case may be, shall cure
such breach in all material respects.
Section 2.05 Representations and Warranties of the Seller Regarding the
Mortgage Loans. The Seller represents and warrants to the Trustee, the Servicer,
the Certificate Insurer and the Certificateholders as of the Closing Date and,
with respect to any Subsequent Mortgage Loan, as of the Subsequent Transfer Date
(in either case except as otherwise expressly stated) that, as to each Mortgage
Loan conveyed to the Trust by it:
(i) The information with respect to each Mortgage Loan set
forth in the Mortgage Loan Schedule or Subsequent Mortgage Loan
Schedule is true and correct as of the related Cut-off Date or related
Subsequent Transfer Date;
(ii) All of the original or certified documentation set forth
in Section 2.01 (including all material documents related thereto),
with respect to each Mortgage Loan has been or will be delivered to the
Trustee on the Closing Date or as otherwise provided in Section 2.01 or
Section 2.02, as applicable;
(iii) Each related Mortgaged Property is improved by a one- to
four-family residential dwelling owned by the related Mortgagor in fee
simple that is permanently affixed to the land and constitutes real
property under the laws of the state in which the Mortgaged Property is
located but shall not include co-operatives or mobile homes;
(iv) Each Mortgage Loan is a "qualified mortgage" as defined
in Section 860G(a)(3) of the Code and no such Mortgage Loan has a
loan-to-value ratio (calculated in accordance with the REMIC
Provisions) in excess of 125%; none of the Mortgage Loans are either
"consumer credit contracts" or "purchase money loans" as such terms are
defined in 16 C.F.R. ss. 433; with respect to each Mortgage Loan that
is a "mortgage" as such term is defined in 15 U.S.C. 1602(aa), no
obligor has or will have a claim or defense under such Mortgage Loan;
(v) As of the Cut-off Date, no Initial Mortgage Loan included
in the Fixed Rate Group has a Combined Loan-to-Value Ratio in excess of
90% and no Initial Mortgage Loan included in Adjustable Rate Group I or
Adjustable Rate Group II has a Loan-to-Value Ratio in excess of 95%;
except that Mortgage Loans in the Fixed Rate
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Group representing not more than 1.24% of the Original Fixed Rate Group
Balance have Combined Loan-to-Value Ratios between 90% and 100%,
Mortgage Loans in Adjustable Rate Group I representing not more than
0.50% of the Original Adjustable Rate Group I Balance have Combined
Loan-to-Value Ratios between 95% and 100% and Mortgage Loans in
Adjustable Rate Group II representing not more than 0.00% of the
Original Adjustable Rate Group II Balance have Combined Loan-to-Value
Ratios between 95% and 100%;
(vi) Each Mortgage Loan was originated by the Seller, an
Affiliate of the Seller or by an originator not affiliated with the
Seller authorized to originate such Mortgage Loan and is being serviced
by the Seller;
(vii) Each Initial Mortgage Loan included in the Fixed Rate
Group as of the Cut-off Date bears a fixed Mortgage Loan Rate of at
least 6.50% per annum, each Initial Mortgage Loan included in
Adjustable Rate Group I as of the Cut-off Date is an Adjustable Rate
Mortgage Loan that has a Minimum Rate of not less than 7.50% per annum
and a Mortgage Loan Rate as of the Cut-off Date of not less than 7.50%
per annum and each Initial Mortgage Loan included in Adjustable Rate
Group II as of the Cut-off Date is an Adjustable Rate Mortgage Loan
that has a Minimum Rate of not less than 7.49% per annum and a Mortgage
Loan Rate as of the Cut-off Date of not less than 7.49% per annum; the
terms of each Adjustable Rate Mortgage Loan require that adjustments in
the related Mortgage Loan Rate be made employing the related Index
measured as of a date not more than three months prior to the related
adjustment date;
(viii) Each Mortgage Note provides for a schedule of
substantially level and equal Monthly Mortgage Payments (subject, in
the case of an Adjustable Rate Mortgage Loan, to periodic adjustments
relating to changes in the Mortgage Loan Rate) that are sufficient to
amortize fully the principal balance of such Mortgage Note on or before
its maturity date, except that, Mortgage Notes with respect to Initial
Mortgage Loans in the Fixed Rate Group representing not more than 1% of
the initial Fixed Rate Group Balance, provide for level and equal
Monthly Mortgage Payments that are sufficient to amortize fully the
principal balances of such Notes over a period not exceeding 30 years,
with "balloon" payments at stated maturity that are substantially in
excess of the Monthly Mortgage Payments;
(ix) Each Mortgage is a valid and subsisting lien of record on
the Mortgaged Property having the priority indicated on the Mortgage
Loan Schedule, subject, in the case of any Junior Mortgage Loan, only
to any Senior Lien or Senior Liens on such Mortgaged Property and
subject in all cases to the exceptions to title set forth in the title
insurance policy with respect to the related Mortgage Loan, which
exceptions are generally acceptable to home equity mortgage lending
institutions, and such other exceptions to which similar properties are
commonly subject and that do not individually, or in the aggregate,
materially and adversely affect the benefits of the security intended
to be provided by such Mortgage;
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(x) Immediately prior to the sale, transfer and assignment
herein contemplated, the Seller held good and indefeasible title to,
and was the sole owner of, each Mortgage Loan conveyed by the Seller
subject to no liens, charges, mortgages, encumbrances or rights of
others, except with respect to liens that will be released
simultaneously with such transfer and assignment; and immediately upon
the transfer and assignment herein contemplated, the Trustee will hold
good and indefeasible title to, and be the sole owner of, each Mortgage
Loan subject to no liens, charges, mortgages, encumbrances or rights of
others;
(xi) The Mortgage Loan Rate for each Adjustable Rate Mortgage
Loan will be adjustable on each related Adjustment Date and will equal
the sum, rounded upward to the nearest three decimal places, of the
Index plus the related Gross Margin, subject to any related Minimum
Rates, Maximum Rates or any limitations or periodic adjustments, in
each case as specified in the related Mortgage Loan Schedule. No
Mortgage Loans in any Mortgage Loan Group are subject to negative
amortization.
(xii) With respect to any Adjustable Rate Mortgage Loan, no
mortgage document in the Mortgage File contains any provision
permitting or requiring conversion of the Mortgage Loan to a fixed
interest rate nor is the Mortgage Loan Rate conditioned upon Mortgagor
maintaining accounts with Seller;
(xiii) As of the Closing Date or Subsequent Cut-off Date, as
appropriate (a) no Mortgage Loan had two or more Monthly Mortgage
Payments past due and (b) not more than 3.36% of the Initial Mortgage
Loans (by Original Pool Balance) had one or more Monthly Mortgage
Payments past due;
(xiv) As of the related Cut-off Date or Subsequent Cut-off
Date, as appropriate, there is no delinquent tax or assessment lien on
any Mortgaged Property, and, to the best knowledge of the Seller, each
Mortgaged Property is free of damage and is in good repair and is not
affected by hazardous or toxic wastes or substances;
(xv) There is no offset, right of rescission, counterclaim or
defense, including the defense of usury, with respect to any Mortgage
Note or Mortgage, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable in whole
or in part, or subject to any right to rescission, set-off,
counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted
with respect thereto;
(xvi) As of the related Cut-off Date or Subsequent Cut-off
Date, as appropriate, there is no mechanic's lien or claim for work,
labor or material affecting any Mortgaged Property that is or may be a
lien prior to, or equal to or on a parity with, the lien of the related
Mortgage except those that are insured against by any title insurance
policy referred to in paragraph (xvii) below;
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(xvii) To the best of the Seller's knowledge, each Mortgage
Loan at the time it was made complied in all material respects with
applicable local, state and federal laws and regulations, including,
without limitation, the federal Truth-in-Lending Act and other consumer
protection laws, real estate settlement procedure, usury, equal credit
opportunity, disclosure and recording laws;
(xviii) With respect to each Mortgage Loan, a lender's title
insurance policy (issued in standard form by a title insurance company
authorized to transact business in the state where the related
Mortgaged Property is located), in an amount at least equal to the
Original Principal Amount of such Mortgage Loan insuring the
mortgagee's interest under the related Mortgage Loan as the holder of a
valid lien of record on the real property described in the related
Mortgage (subject only to exceptions of the character referred to in
paragraph (viii) above), was effective on the date of the origination
of such Mortgage Loan, and, as of the Closing Date, such policy is in
full force and effect and thereafter such policy shall continue in full
force and effect and shall inure to the benefit of the
Certificateholders upon consummation of the transactions contemplated
by this Agreement;
(xix) As of the related Cut-off Date or Subsequent Cut-off
Date, as appropriate, either (a) the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy
(which may be a blanket policy) with a generally acceptable carrier
that provides for fire and extended coverage representing coverage not
less than the least of (a) the outstanding principal balance of the
related Mortgage Loan (together, in the case of a Junior Mortgage Loan,
with the outstanding principal balance of the Senior Lien), (b) the
minimum amount required to compensate for damage or loss on a
replacement cost basis or (c) the full insurable value of the Mortgaged
Property or (b) in the case of a Junior Mortgage Loan, a policy has
been issued by a generally acceptable carrier that will cover the full
Principal Balance of such Junior Mortgage Loan in the event of a loss
covered by a hazard typically insured against by the type of policy
referred to in clause (xviii)(a);
(xx) If any Mortgaged Property is in an area identified in the
Federal Register by FEMA as having special flood hazards, a flood
insurance policy in a form meeting the requirements of the current
guidelines of the Federal Insurance Administration, if obtainable with
respect to such Mortgaged Property, is in effect with respect to such
Mortgaged Property with a generally acceptable carrier in an amount
representing coverage not less than the least of (A) the outstanding
principal balance of the related Mortgage Loan (together, in the case
of a Junior Mortgage Loan, with the outstanding principal balance of
the Senior Lien), (B) the minimum amount required to compensate for
damage or loss on a replacement cost basis or (C) the maximum amount of
insurance that is available under the Flood Disaster Protection Act of
1973;
(xxi) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization,
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moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law), and
all parties to each Mortgage Loan had full legal capacity to execute
all documents relating to such Mortgage Loan and convey the estate
therein purported to be conveyed; with respect to each Mortgage Loan,
only one original Mortgage Note exists;
(xxii) The Seller has caused and will cause to be performed
any and all acts required to be performed to preserve the rights and
remedies of the Trustee in any insurance policies applicable to each
Mortgage Loan, including any necessary notifications of insurers,
assignments of policies or interests therein, and establishment of
co-insured, joint loss payee and mortgagee rights in favor of the
Trustee;
(xxiii) As of the Cut-off Date, Initial Mortgage Loans
representing no more than 1% of the Original Fixed Rate Group Balance,
Initial Mortgage Loans representing no more than 1% of the Original
Adjustable Rate Group I Balance and Initial Mortgage Loans representing
no more than 1% of the Original Adjustable Rate Group II Balance,
respectively, are secured by Mortgaged Properties located within any
single zip code area;
(xxiv) Each original Mortgage has been recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage (other than the assignment from the Seller to the
Trustee and any assignment to the Seller or an affiliate thereof) have
been recorded in the appropriate jurisdictions as to which no Opinion
of Counsel was delivered pursuant to Section 2.01 or 2.02, as
applicable, or such Mortgages and assignments are in the process of
being recorded);
(xxv) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument that has been recorded, if necessary, to protect the
interest of the Certificateholders and the Certificate Insurer and that
has been delivered to the Trustee. The substance of any such alteration
or modification is reflected on the Mortgage Loan Schedule and has been
approved by the primary mortgage guaranty insurer, if any;
(xxvi) The proceeds of each Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to
make future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor either have been complied
with or are not yet required to be complied with but will be complied
with as and when required. All costs, fees and expenses incurred in
making or closing or recording such Mortgage Loans were paid;
(xxvii) No Mortgage Note is or has been secured by any
collateral, pledged account or other security other than the lien of
the corresponding Mortgage;
(xxviii) No Mortgage Loan was originated under a buydown plan;
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(xxix) No Mortgage Loan has a shared appreciation feature or
other contingent interest feature;
(xxx) Each Mortgaged Property consists of one or more
contiguous parcels of real property with a residential dwelling erected
thereon;
(xxxi) Each Mortgage Loan contains a provision for the
acceleration of the payment of the unpaid principal balance of such
Mortgage Loan in the event the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder;
(xxxii) Any advances made to the Mortgagor after the date of
origination of a Mortgage Loan but prior to the related Cut-off Date or
Subsequent Cut-off Date, as appropriate, have been consolidated with
the outstanding principal amount secured by the related Mortgage, and
the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule.
The consolidated principal amount as of the related Cut-off Date or
Subsequent Cut-off Date, as appropriate, does not exceed the original
principal amount of the related Mortgage Loan and is reflected as the
current principal amount of such Mortgage Loan on the Mortgage Loan
Schedule;
(xxxiii) To the best knowledge of the Seller, there is no
proceeding pending or threatened for the total or partial condemnation
of any Mortgaged Property, nor is such a proceeding currently
occurring;
(xxxiv) To the best knowledge of the Seller, all of the
improvements that were included for the purposes of determining the
Appraised Value of any Mortgaged Property lie wholly within the
boundaries and building restriction lines of such Mortgaged Property,
and no improvements on adjoining properties encroach upon such
Mortgaged Property except those that are identified in the related
title insurance policy and affirmatively insured;
(xxxv) To the best knowledge of the Seller, no improvement
located on or being part of any Mortgaged Property is in violation of
any applicable zoning law or regulation, all inspections, licenses and
certificates required to be made or issued with respect to all occupied
portions of each Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities and such Mortgaged Property
is lawfully occupied under applicable law;
(xxxvi) With respect to each Mortgage that is a deed of trust,
a trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in such
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders or the Trust to any trustee under any deed of trust,
except in connection with a trustee's sale after default by the related
Mortgagor;
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(xxxvii) With respect to each Junior Mortgage Loan, either (A)
no consent for such Mortgage Loan was required by the holder of the
related Senior Lien prior to the making of such Mortgage Loan or (B)
such consent has been obtained and is contained in the related Mortgage
File;
(xxxviii) Each Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including by trustee's sale and by
judicial foreclosure and there is no homestead or other exemption
available to the related Mortgagor that would materially interfere with
the right to sell the related Mortgaged Property at a trustee's sale or
the right to foreclose upon the related Mortgaged Property;
(xxxix) There is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Note and no
event that, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event of acceleration; and the Seller has not waived any
default, breach violation or event of acceleration;
(xl) No instrument of release or waiver has been executed in
connection with any Mortgage Loan, and no Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement
that has been approved by the primary mortgage guaranty insurer, if
any, and the Certificate Insurer, and that has been delivered to the
Trustee;
(xli) The maturity date of each Junior Mortgage Loan is at
least 12 months prior to the maturity date of the related Senior Lien
if such Senior Lien provides for a balloon payment;
(xlii) As of the Cut-off Date, at least 91% of the Initial
Mortgage Loans in the Fixed Rate Group (by Original Fixed Rate Group
Balance), at least 93% of the Initial Mortgage Loans in Adjustable Rate
Group I (by Original Adjustable Rate Group I Balance) and at least 95%
of the Initial Mortgage Loans in Adjustable Rate Group II (by Original
Adjustable Rate Group II Balance) are secured by Mortgaged Properties
that are maintained by the related Mortgagors as primary residences;
(xliii) There are no defaults (other than delinquencies) in
complying with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges,
leasehold payments or ground rents that previously became due and owing
have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item that remains unpaid; the Seller
has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the Mortgage,
other than interest accruing from the date of the Mortgage Note
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or date of disbursement of the Mortgage proceeds, whichever is greater,
to the date that precedes by one month the due date of the first
installment of principal and interest;
(xliv) To the best of the Seller's knowledge, all parties that
have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise during the period in which they held and
disposed of such interest, were and either are now or, in the case of
subclause (1) of this clause, will be within 30 days of the Closing
Date or Subsequent Cut-off Date, as appropriate, (1) in compliance with
any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2) (A) organized under
the laws of such state, or (B) qualified to do business in such state,
or (C) federal savings and loan associations or national banks having
principal offices in such state, or (D) not doing business in such
state so as to require qualification or licensing;
(xlv) No Mortgage Loan was selected by the Seller for
inclusion in the Trust on any basis intended to adversely affect the
Trust;
(xlvi) A full appraisal of each Mortgaged Property was
performed in connection with the origination of the related Mortgage
Loan, and such appraisal is the appraisal referred to in determining
the Appraised Value of such Mortgaged Property;
(xlvii) With respect to each Junior Mortgage Loan, the related
Senior Lien requires equal monthly payments or, if such Senior Lien
bears an adjustable interest rate, the monthly payments for such Senior
Lien may be adjusted no more frequently than monthly;
(xlviii) With respect to any Junior Mortgage Loan with a
related Senior Lien that provides for negative amortization or an
open-end feature that permits additional borrowings, the balance of
such Senior Lien reflected on the Mortgage Loan Schedule and used to
calculate the Combined Loan-to-Value Ratio for such Junior Mortgage
Loan is based on the maximum amount of negative amortization, deferred
interest or maximum amount of borrowings permitted under such Senior
Lien;
(xlix) The Company has not required the Mortgagor to sign a
letter in connection with the origination of any Mortgage Loan in which
such Mortgagor indicates its inability to repay such Mortgage Loan in
accordance with the terms of the related Mortgage Note;
(l) Each Adjustable Rate Mortgage Loan that (i) has a first
Adjustment Date within six months of its origination date was
underwritten or re-underwritten as though such Mortgage Loan would bear
a rate of interest equal to related Index plus the related Gross Margin
and (ii) has a first Adjustment Date more than six months after its
origination date was underwritten or re-underwritten as though such
Mortgage Loan would bear a rate of interest equal to its specified
initial interest rate;
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(li) As of the related Cut-off Date or Subsequent Cut-off
Date, as appropriate, no Mortgage Loan in any Mortgage Loan Group was
secured by more than one Mortgaged Property;
(lii) With respect to each Adjustable Rate Mortgage Loan, all
of the terms of the Mortgage pertaining to interest rate adjustments,
payment adjustments and adjustments of the outstanding principal
balance are enforceable; such adjustments will not affect the priority
of the Mortgage lien and all of the adjustments have been properly
calculated, recorded, reported and applied in accordance with the
Mortgage and applicable law;
(liii) All insurance policies, other than any primary mortgage
insurance policies purchased by the Seller or Servicer or any of its
affiliates, are the valid and binding obligation of the insurer and
contain a standard mortgagee clause naming the originator, its
successors and assigns, as mortgagee. Such insurance policies require
prior notice to the insured of termination or cancellation and no such
notice has been received, each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor;
(liv) None of the Mortgage Loans is subject to a plan of
bankruptcy and no Mortgagor has sought protection or relief under any
state or federal bankruptcy or insolvency law during the term of the
related Mortgage;
(lv) At least 95% of the Initial Mortgage Loans in the Fixed
Rate Group (by Original Fixed Rate Group Balance), at least 97% of the
Initial Mortgage Loans in Adjustable Rate Group I (by Original
Adjustable Rate Group I Balance) and at least 97% of the Initial
Mortgage Loans in Adjustable Rate Group II (by Original Adjustable Rate
Group II Balance) have Monthly Mortgage Payments due during the first
Collection Period commencing after the calendar month during which such
Mortgage Loan is included in the Trust;
(lvi) All Mortgage Loans were underwritten or re-underwritten
in accordance with the underwriting guidelines of the Company;
(lvii) To the knowledge of the Seller, no misrepresentation,
negligence, fraud or similar occurrence with respect to a Mortgage Loan
has taken place on the part of the Mortgagor, any appraiser, any
builder or developer, or any other party having statutory or common law
liabilities with respect to the origination of the Mortgage Loan or in
any related application for insurance in relation to such Mortgage
Loan;
(lviii) To the knowledge of the Seller, certain Mortgage Loans
are secured by Mortgaged Properties upon which are affixed manufactured
housing or modular homes, provided that it is the intent and agreement
of the parties hereto that this representation
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shall be deemed breached if any Mortgage Loan is determined to be
secured by a Mortgaged Property upon which is affixed manufactured
housing or a modular home and such Mortgage Loan is subject to a
foreclosure which results in a Realized Loss;
(lix) There was no fraud involved in the origination of any
Mortgage Loans by the mortgagee or the Mortgagor, any appraiser or any
other party involved in the origination of the Mortgage Loans;
(lx) No Mortgage Loan is 60 days or more contractually
delinquent as of the Cut-off Date and no Subsequent Mortgage Loan will
be 60 days or more contractually delinquent as of its Subsequent
Transfer Date (and accordingly there are no Restricted Mortgage Loans
required to be listed in Schedule III);
(lxi) All requirements for the valid transfer of each PMI
Policy, including any assignments or notices required in each PMI
Policy, have been satisfied;
(lxii) As of the Closing Date with respect to each Mortgage
Loan that is subject to a PMI Policy, the Seller has not taken any
action, or omitted to take any action, and there are no circumstances
that would cause the PMI Insurer to deny a claim with respect to such
Mortgage;
(lxiii) As of the Cut-off Date, not more than 69% of the
Initial Mortgage Loans included in the Fixed Rate Group are "cash-out
refinance" Mortgage Loans (as such term is described under the
Company's underwriting guidelines), not more than 45% of the Initial
Mortgage Loans included in Adjustable Rate Group I are "cash-out
refinance" Mortgage Loans and not more than 52% of the Initial Mortgage
Loans included in Adjustable Rate Group II are "cash-out refinance"
Mortgage Loans;
(lxiv) 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;
(lxv) The Servicer will not waive any Prepayment Charge unless
it is waived in accordance with the standard set forth in Section 3.22;
and
(lxvi) On the Closing Date, as measured by the Cut-off Date
aggregate Principal Balance, 85.02% of the Mortgage Loans having
Loan-to-Value Ratios exceeding 80% are covered by the PMI Policy.
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(lxvii) As of the Cut-off Date, not more than 7.00% of the
Initial Mortgage Loans in the Fixed Rate Group, none of the Initial
Mortgage Loans in Adjustable Rate Group I and not more than 13.00% of
the Initial Mortgage Loans in Adjustable Rate Group II were subject to
the Home Ownership and Equity Protection Act of 1994 ("HOEPA"). The
Seller has procedures in place to ensure compliance with the
requirements of HOEPA and the Initial Mortgage Loans were originated in
compliance with such procedures and requirements.
(lxviii) No proceeds from any Initial Mortgage Loan were used
to finance single-premium credit, life and disability insurance
policies.
(lxix) No Initial Mortgage Loan will impose a prepayment
charge for a term in excess of five years.
It is understood and agreed that the representations and warranties set
forth in this Section shall survive the sale and assignment of the Mortgage
Loans to the Trust and the issuance, sale and delivery of the Certificates. Upon
discovery by the Seller, the Servicer or a Responsible Officer of the Trustee of
a breach of any of the foregoing representations and warranties, without regard
to any limitation set forth in such representation or warranty concerning the
knowledge of the Seller as to the facts stated therein, which breach materially
and adversely affects the value of the related Mortgage Loan or the interests of
the Certificateholders or the Certificate Insurer in the related Mortgage Loan,
the party discovering such breach shall give prompt written notice to the
Trustee which shall inform the other parties hereto, each of the Rating Agencies
and the Certificate Insurer and take such other action as it deems appropriate
pursuant to Section 9.01.
Within 60 days of its discovery or its receipt of notice of such
breach, the Seller shall use all reasonable efforts to cure such breach in all
material respects. Unless, prior to the expiration of such 60-day period, such
breach has been cured in all material respects or otherwise does not exist or
continue to exist, the Seller shall, not later than the Deposit Date in the
month following the related Collection Period in which any such cure period
expired, but in all events within 90 days of the earlier of the discovery of the
breach or the Seller's receipt of notice of breach (or at the election of the
Seller, an earlier Collection Period), either (I) repurchase such Mortgage Loan
(or, in the case of any representation and warranty stated above in terms of
minimum or maximum aggregate percentage amounts, repurchase Mortgage Loans such
that, after giving effect to such repurchase, the related representation and
warranty would be complied with) (including any property acquired in respect
thereof and any insurance policy or insurance proceeds with respect thereto)
from the Trust in the same manner and subject to the same conditions as set
forth in Section 2.03 or (II) remove such Mortgage Loan and substitute in its
place a Qualified Replacement Mortgage Loan (or, in the case of any
representation and warranty stated above in terms of minimum or maximum
aggregate percentage amounts, remove such Mortgage Loans and substitute in their
place Qualified Replacement Mortgage Loans such that, after giving effect to
such substitution, the related representation and warranty would be complied
with) in the same manner and subject to the same conditions as set forth in
Section 2.03. Upon making any such repurchase or substitution, the Seller shall
be entitled to receive an instrument of assignment or transfer from the Trustee,
without recourse to the Trustee, to the
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same extent as set forth in Section 2.03 with respect to the repurchase of or
substitution for Defective Mortgage Loans under that Section. It is understood
and agreed that the obligation of the Seller to repurchase or substitute any
such Defective Mortgage Loan (or property acquired in respect thereof or
insurance policy or current or future insurance proceeds with respect thereto)
shall constitute the sole remedy against it respecting such breach of the
foregoing representations or warranties available to the Certificateholders or
the Trustee, as the case may be, and such obligation shall survive any
resignation or termination of the Company as Servicer under this Agreement.
Notwithstanding the foregoing, a substitution of a Mortgage Loan by the
Seller for a breach will not be made unless the Trustee and the Certificate
Insurer receive an Officer's Certificate of the Seller certifying that the
Qualified Replacement Mortgage Loan conforms to the requirements of this
Agreement and an Opinion of Counsel that such substitution will not be a
"prohibited transaction" as defined in Section 860F(a)(2) of the Code. Any
substitution must be effected not later than two years after the Closing Date,
or within such longer period of time as may be permitted under the REMIC
Provisions for substitution of mortgage loans.
Section 2.06 Execution and Authentication of Certificates. The Trustee
shall on behalf of the Trust, not in its individual capacity but solely as
Trustee, cause to be executed, and delivered on the Closing Date to or upon the
order of the Seller, in exchange for the Mortgage Loans and the other assets
comprising the Trust, simultaneously with the sale, assignment and transfer to
the Trustee of the Mortgage Loans, each Class of Certificates duly executed by
the Trustee, and authenticated by the Trustee, pursuant to Section 6.01, in
authorized denominations, equaling, 100% of the Percentage Interests in each
Class, and collectively evidencing the entire ownership of the Trust.
Section 2.07 Reserved.
Section 2.08 Indemnification of the Trust. The Seller shall indemnify
the Trust for any liability incurred thereby as a result of a breach of the
representation and warranty set forth in clause (xvii) of Section 2.05 (without
regard to any limitation therein relating to the knowledge of the Seller). This
indemnity obligation shall be in addition to any other obligation the Seller may
have in connection with any such breach.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS;
CERTIFICATE ACCOUNT
Section 3.01 The Servicer and the Sub-Servicers. Acting directly or
through one or more Sub-Servicers as provided in Section 3.15, the Servicer, as
servicer, shall administer the Mortgage Loans with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to all
comparable home equity mortgage loans that it services for itself or others. The
duties of the Servicer shall include collecting and posting of all payments,
responding to inquiries of Mortgagors or by federal, state or local government
authorities with respect to the Mortgage Loans, investigating delinquencies,
reporting tax information to
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Mortgagors in accordance with its customary practices and accounting for
collections and furnishing monthly and annual statements to the Trustee with
respect to distributions and making Monthly Advances and Servicing Advances
pursuant to Section 5.02. The Servicer shall follow its customary standards,
policies and procedures in performing its duties as Servicer, to the extent not
in conflict with the provisions of this Agreement. Notwithstanding the
appointment of any Sub-Servicer, the Servicer shall remain liable for the
performance of all of the servicing obligations and responsibilities under this
Agreement. The Servicer shall maintain all licenses and qualifications necessary
to perform its servicing obligations hereunder in the jurisdictions in which it
services Mortgage Loans. If the Servicer commences directly to service a
material number or principal amount of Mortgage Loans with related Mortgaged
Properties located in any other state, the Servicer will use its reasonable
efforts promptly to obtain, and thereafter to maintain, all licenses and
qualifications necessary to perform its servicing obligations hereunder in each
such state. Each Sub-Servicer shall maintain all licenses and qualifications
necessary to perform its servicing obligations in the states where the Mortgaged
Properties to which the applicable Sub-Servicing Agreement relates are located.
The Servicer shall cooperate with the Trustee and furnish to the Trustee such
information in its possession as may be necessary or appropriate to enable the
Trustee to perform its tax reporting duties hereunder. The Trustee shall furnish
the Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder.
Without limiting the generality of the foregoing, the Servicer (i)
shall continue, and is hereby authorized and empowered by the Trustee, to
execute and deliver, on behalf of itself, the Certificateholders and the Trustee
or any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the related Mortgaged
Properties (ii) may consent to any modification of the terms of any Mortgage
Note not expressly prohibited hereby if the effect of any such modification will
not be to materially and adversely affect the security afforded by the related
Mortgaged Property or to decrease or slow (other than as permitted by Section
3.02(a)(ii)) the timing of receipt of any payments required thereunder and (iii)
shall not consent to the placing of a lien senior to or on parity with that of
the Mortgage on the related Mortgaged Property.
The Servicer may but shall not be obligated to xxx to enforce or
collect on any of the Mortgage Loans or any insurance policy covering a Mortgage
Loan, in its own name if possible, or on behalf of the Trust. If the Servicer
commences a legal proceeding to enforce a Mortgage Loan or any such insurance
policy, the Trustee shall thereupon be deemed to have automatically assigned the
Mortgage Loan or the rights under such insurance policy to the Servicer for
purposes of collection only. If, however, in any suit or legal proceeding for
enforcement, it is held that the Servicer may not enforce or collect on a
Mortgage Loan or any insurance policy covering a Mortgage Loan on the ground
that it is not a real party in interest or a holder entitled to enforce such
Mortgage Loan or such insurance policy, as the case may be, then the Trustee
shall, upon the written request of a Servicing Officer, furnish the Servicer
with such powers of attorney and other documents as are necessary or appropriate
to enable the Servicer to enforce such Mortgage Loan or insurance policy, as the
case may be. Amounts expended by the Servicer under this paragraph shall be
considered Servicing Advances.
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The relationship of the Servicer to the Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.
The parties intend that each REMIC Pool shall constitute a REMIC, and
that the affairs of each REMIC Pool shall be conducted so as to qualify it as a
REMIC. In furtherance of such intention, (i) the Servicer covenants and agrees
that it shall act as agent (and the Servicer is hereby appointed to act as
agent) on behalf of each REMIC Pool, and that in such capacity it shall: (a) use
its best efforts to conduct the affairs of such REMIC Pool at all times that any
Certificates are outstanding so as to maintain the status thereof as a REMIC
under the REMIC Provisions; (b) not knowingly or intentionally take any action
or omit to take any action that would cause the termination of the REMIC status
of any REMIC Pool or that would subject such REMIC Pool to tax, including the
modification of a qualified mortgage that would subject such REMIC Pool to tax;
and (c) exercise reasonable care not to allow such REMIC Pool to receive income
from the performance of services or from assets not permitted under the REMIC
Provisions to be held by a REMIC, and (ii) the Holder of the Class R
Certificates covenants and agrees that it shall (a) pay the amount of any
federal income tax, including, without limitation, prohibited transaction taxes,
taxes on net income from foreclosure property, and taxes on certain
contributions to a REMIC after the Startup Day, imposed on any REMIC Pool when
and as the same shall be due and payable (but such obligation shall not prevent
the Holder of the Class R Certificates or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Holder of the Class R Certificates from withholding or depositing payment of
such tax, if permitted by law, pending the outcome of such proceedings); and (b)
pay the amount of any and all taxes imposed on any REMIC Pool pursuant to
Sections 24870, 24874 and 23153 of the California Revenue and Taxation Code. The
Holder of the Class R Certificates shall not be entitled to reimbursement for
any taxes paid pursuant to this Section.
Section 3.02 Collection of Certain Mortgage Loan Payments; Collection
Account and Certificate Account.
(a) The Servicer shall, to the extent such procedures shall be
consistent with this Agreement, follow such collection procedures as it follows
from time to time with respect to home equity mortgage loans in its servicing
portfolio that are comparable to the Mortgage Loans; provided that the Servicer
shall always at least follow collection procedures that are consistent with
standard industry practices. Consistent with the foregoing, and subject to the
limitations in Section 3.05, the Servicer may in its discretion (i) waive any
assumption fees, late payment charges, charges for checks returned for
insufficient funds, if any, excluding Prepayment Charges, or other fees that may
be collected in the ordinary course of servicing the Mortgage Loans, (ii) if a
Mortgagor is in default or about to be in default because of a Mortgagor's
financial condition, arrange with the Mortgagor a schedule for the payment of
delinquent payments due on the related Mortgage Loan, or (iii) modify payments
of monthly principal and interest on any Mortgage Loan becoming subject to the
terms of the Relief Act in accordance with the Servicer's general policies for
comparable home equity mortgage loans subject to such Act; provided , however,
that the Servicer shall give the Certificate Insurer prompt written notice of
any such action.
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(b) The Servicer shall establish and maintain, or cause to be
established and maintained, one or more Eligible Accounts that in the aggregate
are the Collection Account. All amounts held in the Collection Account shall be
invested by the depository institution or trust company then maintaining the
account at the written direction of the Servicer in Permitted Investments that
mature not later than the Deposit Date next succeeding the date of investment.
No Permitted Investment shall be sold or disposed of at a gain prior to maturity
unless the Servicer has obtained an Opinion of Counsel that such sale or
disposition will not cause any REMIC Pool to be subject to the tax on income
from prohibited transactions imposed by Code Section 860F(a)(1), or otherwise
subject any REMIC Pool to tax or cause any REMIC Pool to fail to qualify as a
REMIC and delivered copies thereof to the Trustee and the Certificate Insurer.
The Servicer shall not retain any cash or investment in the Collection Account
for a period in excess of 12 months and cash therein shall be considered
transferred to Certificate Account on a first-in, first-out basis. All net
income and gain realized from any such investment shall be for the benefit of
the Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time. Any losses realized in connection with
any such investment shall be for the account of the Servicer and the Servicer
shall deposit or cause to be deposited the amount of such loss (to the extent
not offset by income from other investments) in the Collection Account
immediately upon the realization of such loss.
(c) Subject to Section 3.02(d), the Servicer shall deposit in the
Collection Account each of the following payments on and collections in respect
of the Mortgage Loans as soon as practicable, but in no event later than the
close of business on the second Business Day after its receipt thereof:
(i) all payments in respect of or allocable to interest on the
Mortgage Loans (including any net income from REO Properties);
(ii) all Principal Payments;
(iii) all Payments Ahead;
(iv) all Net Liquidation Proceeds;
(v) all Trust Insurance Proceeds (including, for this purpose,
any amounts required to be credited by the Servicer pursuant to the
last sentence of Section 3.04); and
(vi) all Prepayment Charges.
The Servicer shall replace such amounts previously withdrawn from the
Collection Account and applied by the Servicer towards the payment of a Monthly
Advance pursuant to Section 5.02(a) or towards the payment of a Servicing
Advance pursuant to Section 5.02(b) by depositing into the Collection Account on
or prior to the Deposit Date immediately following such withdrawal an amount
equal to the total of all such amounts applied to the payment of a
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Servicing Advance and those amounts applied to the payment of a Monthly Advance
required to be deposited pursuant to Section 5.01(b).
The foregoing requirements respecting deposits to the Collection
Account are exclusive, it being understood that, without limiting the generality
of the foregoing, the Servicer need not deposit in the Collection Account
amounts representing fees, late payment charges, charges for checks returned for
insufficient funds, if any, or extension or other administrative charges
(excluding Prepayment Charges) paid by Mortgagors or amounts received by the
Servicer for the account of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items. The amounts deposited
in the Collection Account are subject to withdrawal, from time to time, to make
deposits into the Certificate Account pursuant to Section 3.02(e), to pay itself
the Monthly Servicing Fee pursuant to Section 3.08 and to make Servicing
Advances or to reimburse itself for Servicing Advances, as applicable, in either
case in accordance with Section 5.02(b), to make Monthly Advances or to
reimburse itself for payments of Monthly Advances, as applicable, in either case
in accordance with Section 5.02(a). In addition, if the Servicer deposits in the
Collection Account any amount not required to be so deposited or any amount in
respect of payments by Mortgagors made by checks subsequently returned for
insufficient funds or other reason for non-payment, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(d) Upon such terms as the Certificate Insurer and the Rating Agencies
may approve, the Servicer may make the deposits to the Collection Account
referred to in Section 3.02(c) on a later day than the second Business Day after
receipt of the amounts required to be so deposited, which terms and later day
shall be specified by the Certificate Insurer and the Rating Agencies and
confirmed to the Trustee and the Servicer in writing.
(e) The Trustee shall establish and maintain the Certificate Account.
The Certificate Account shall be an Eligible Account segregated on the books of
the Trustee and held by the Trustee in trust, and the Certificate Account and
the amounts deposited therein shall not be subject to any claim, liens or
encumbrances of any creditors or depositors of the Trustee or the Company
(whether made directly or indirectly through a liquidator, receiver or trustee
in bankruptcy of the Trustee or the Company). At or before 2:00 p.m. Los Angeles
time on each Deposit Date, the Servicer shall withdraw from the Collection
Account all amounts on deposit therein that constitute any portion of Available
Funds for a Mortgage Loan Group and the related Distribution Date (including any
amounts therein that are being held for distribution on a subsequent
Distribution Date which are being applied toward the Monthly Advance for the
related Distribution Date pursuant to Section 5.02(a)) and all Prepayment
Charges collected during the related Collection Period and remit such amounts to
the Trustee for deposit in the Certificate Account. In addition, any
Compensating Interest and Monthly Advances required to be made by the Servicer
for the related Mortgage Loan Group in respect of the related Distribution Date
and any amounts required to be deposited into the Certificate Account in
connection with a purchase or repurchase of any Mortgage Loans in such Mortgage
Loan Group or any shortage on such Mortgage Loans by the Seller or the Servicer
pursuant to Section 2.03, 2.05, 3.01, 3.06 or 10.01 or a substitution of a
Qualified Replacement Mortgage Loan pursuant to Section 2.03 or 2.05, or in
connection with a purchase of Mortgage Loans by the Servicer
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pursuant to Section 10.01 or in connection with the Servicer's failure to adjust
the Mortgage Loan Rate on an Adjustable Rate Mortgage Loan, shall be remitted to
the Trustee for deposit in the Certificate Account on the applicable Deposit
Date. On the Closing Date, the Class P Deposit shall be deposited in to the
Certificate Account. Any amounts held in the Certificate Account (other than the
Class P Deposit) may be invested at the written direction of the Servicer in
Permitted Investments upon the same terms and conditions as those specified in
clause (b) above with respect to the Collection Account except that such
investments shall mature not later than the Business Day preceding the
Distribution Date next succeeding the date of investment, and in the absence of
such direction the Trustee shall invest in Permitted Investments described in
clause (e) of the definition of Permitted Investments. All net income and gain
realized from any such investment shall be for the benefit of the Servicer as
additional servicing fee; except that the net income and gain realized from such
investments in respect of the Business Day immediately preceding any
Distribution Date shall be for the benefit of the Trustee as additional trustee
fee, and shall be subject to its withdrawal or order from time to time. Any
losses realized in connection with any such investment shall be for the account
of the Servicer and the Servicer shall deposit or cause to be deposited the
amount of such loss (to the extent not offset by income from other investments)
in the Certificate Account immediately upon the realization of such loss.
Section 3.03 Additional Servicing Responsibilities for the Adjustable
Rate Mortgage Loans. The Servicer shall enforce each Adjustable Rate Mortgage
Loan and shall timely calculate, record, report and apply all Mortgage Loan Rate
adjustments in accordance with the related Mortgage Note. The Servicer's records
shall, at all times, reflect then-current Mortgage Loan Rate and Monthly
Mortgage Payment and the Servicer shall timely notify the Mortgagor of any
changes to the Mortgage Loan Rate and the Monthly Mortgage Payment. If the
Servicer fails to adjust the Mortgage Loan Rate or the Monthly Mortgage Payment
in accordance with the terms of the Mortgage Note for the related Adjustable
Rate Mortgage Loan, or if the Servicer fails to notify the related Mortgagor of
any such adjustment as required under the terms of such Mortgage Note, or if any
liability, claim or defense arises with respect to any Adjustable Rate Mortgage
Loan solely as a result of any such failure, the Servicer shall pay, from its
own funds and without right of reimbursement therefor, any shortage in amounts
collected or collectible on the related Adjustable Rate Mortgage Loan that
results. The Servicer shall deposit any amounts in respect of such shortage in
the Certificate Account on the Deposit Date with respect to the related
Collection Period.
Section 3.04 Hazard Insurance Policies. The Servicer shall cause to be
maintained for each Mortgage Loan (including Mortgage Loans as to which the
related Mortgaged Property has been acquired by the Trust upon foreclosure, by
deed in lieu of foreclosure or comparable conversion), hazard insurance
(including flood insurance coverage, if obtainable, to the extent such property
is located in a federally designated flood area in such amount as is required
under applicable FEMA guidelines) with extended coverage in an amount that is
not less than the least of (i) the maximum insurable value from time to time of
the improvements that are a part of such property, or (ii) the combined
principal balance of such Mortgage Loan and the principal balance of each
mortgage loan senior to such Mortgage Loan at the time of such foreclosure plus
accrued interest and the good-faith estimate of the Servicer of related
Liquidation Expenses to be incurred in connection therewith; provided, further
that such hazard insurance shall be in an amount not
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less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. Each such
hazard insurance policy shall contain a standard mortgagee clause naming the
originator, its successors and assigns, as mortgagee and shall require prior
notice to the insured of termination or cancellation. The Servicer shall be
under no obligation to require that any Mortgagor maintain earthquake or other
additional insurance and shall be under no obligation itself to maintain any
such additional insurance on property acquired in respect of a Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. Amounts collected by
the Servicer under any such policies shall be deposited in the Collection
Account or Certificate Account, as the case may be, in accordance with Section
3.02 to the extent that they constitute Net Liquidation Proceeds or Trust
Insurance Proceeds. If the Servicer shall obtain and maintain a blanket policy,
issued by an insurer acceptable to each Rating Agency and the Certificate
Insurer, insuring against such hazard losses, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first sentence of this
Section, it being understood and agreed that such policy may contain a
deductible clause that is in form and substance consistent with standard
industry practice, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section, and there shall have been a
loss that would have been covered by such policy, deposit in the Collection
Account in accordance with Section 3.02 the amount not otherwise payable under
the blanket policy because of such deductible clause.
Section 3.05 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements. In any case in which property subject to a Mortgage is
voluntarily conveyed by the Mortgagor, the Servicer shall enforce any
due-on-sale clause contained in the related Mortgage Note or Mortgage, to the
extent permitted by such Mortgage Note or Mortgage, applicable law and
governmental regulations, but only to the extent that such enforcement will not
adversely affect or jeopardize coverage under any related insurance policy or
result in legal action by the Mortgagor. Subject to the foregoing, the Servicer
may take or enter into an assumption and modification agreement from or with the
Person to whom such Mortgaged Property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the related Mortgage Note and
the Mortgagor remains liable thereon or, if the Person to whom such Mortgaged
Property has been or is about to be conveyed satisfies the Servicer's
then-current underwriting standards for home equity mortgage loans similar to
the Mortgage Loans, and the Servicer in its reasonable judgment finds it
appropriate, is released from liability thereon. The Servicer shall give the
Certificate Insurer prompt written notice of the entering into of any such
assumption and modification agreement. If the Trustee is holding the Mortgage
Files, the Servicer shall notify the Trustee that any assumption and
modification agreement has been completed by delivering to the Trustee an
Officer's Certificate certifying that such agreement is in compliance with this
Section and the Servicer shall forward to the Trustee the original of such
assumption and modification agreement. Such assumption and modification
agreement shall, for all purposes, be considered a part of the related Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. In connection with any such agreement, the Mortgage Loan Rate
shall not be reduced (but may be increased), the Principal Balance of such
Mortgage Loan shall not be changed and the term of such Mortgage Loan will not
be extended beyond the existing term of such Mortgage Loan. Any fee collected by
the Servicer for
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entering into any such agreement shall be retained by the Servicer as additional
servicing compensation.
Notwithstanding the foregoing paragraph of this Section 3.05 or any
other provision of this Agreement, the Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reasons
of any assumption of a Mortgage Loan, or transfer of any Mortgaged Property
without the assumption thereof, by operation of law or any assumption or
transfer that the Servicer reasonably believes it may be restricted by law from
preventing, for any reason whatsoever.
Section 3.06 Realization upon Liquidated Mortgage Loans. Subject to the
limitations set forth in this Section 3.06 with respect to Restricted Mortgage
Loans, the Servicer, on behalf of the Trust, shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.02(a); provided that if the Servicer has actual knowledge
or reasonably believes that any Mortgaged Property is affected by hazardous or
toxic wastes or substances, then the Servicer shall not cause the Trust to
acquire title to such Mortgaged Property in a foreclosure or similar proceeding,
unless otherwise directed in writing by the Certificate Insurer. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices (including, in the case of any default on a related Senior Lien, the
advancing of funds to correct such default) and procedures as it shall deem
necessary or advisable and as shall be normal and usual in its general first,
second and third lien one- to four-family mortgage loan servicing activities
(including the procurement of a drive-by appraisal of the related Mortgaged
Property prior to foreclosure or other conversion). The foregoing is subject to
the proviso that neither the Servicer nor the Trustee shall be required to
expend its own funds in connection with any foreclosure or towards the
correction of any default on a related Senior Lien or restoration of any
Mortgaged Property unless, in the reasonable judgment of the Servicer, such
foreclosure, correction or restoration will increase Net Liquidation Proceeds
(taking into account any unreimbursed Monthly Advances made or expected to be
made with respect to such Mortgage Loan). Amounts expended by the Servicer under
this paragraph shall be considered Servicing Advances.
To the extent the Net Liquidation Proceeds derived from any such
foreclosure or conversion exceed the unpaid Principal Balance of the related
Mortgage Loan and accrued interest thereon at the applicable Mortgage Loan Rate
to the related due date during the Collection Period in which such foreclosure
or conversion occurs (net of any related Monthly Advances or Servicing Advances
that were unreimbursed prior to the receipt of such Net Liquidation Proceeds),
such excess shall be paid to the Holder of the Class R-I Certificate.
Neither the Trust nor the Trustee on behalf of the Trust shall complete
foreclosure proceedings with respect to any Restricted Mortgage Loan. In lieu of
foreclosure, any Restricted Mortgage Loan shall be repurchased or substituted in
accordance with and subject to the limitations contained in Section 2.05.
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Notwithstanding the foregoing, the Servicer, at its sole option, may
purchase from the Trust on any Deposit Date any Mortgage Loan as to which the
related Mortgagor has failed to make full Monthly Mortgage Payments as required
under the related Mortgage Note for three consecutive months at any time
following the Cut-off Date and prior to such Deposit Date at a price equal to
the Purchase Price by depositing such amount in the Certificate Account on such
Deposit Date pursuant to Section 3.02; provided, however, that the aggregate
Principal Balances of the Mortgage Loans purchased by the Servicer pursuant to
the exercise of the option granted in this sentence shall not exceed 3% of the
sum of the Original Pool Balance plus the amount of the Prefunding Account
Deposit and such Mortgage Loans may purchased only in the order of the most
delinquent to the least delinquent, unless otherwise approved by the Certificate
Insurer.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee, on behalf of the
Certificateholders, and the Servicer shall manage, conserve, protect and operate
each such Mortgaged Property for the Certificateholders solely for the purpose
of its prompt disposition and sale. The Servicer shall use its best efforts to
dispose of each such Mortgaged Property as expeditiously as possible consistent
with the goal of maximizing Net Liquidation Proceeds (taking into account any
unreimbursed Monthly Advances made or expected to be made with respect to such
Mortgage Loan). Neither the Trustee nor the Servicer, acting on behalf of the
Trust, shall provide financing from the Trust to any purchaser of any such
Mortgaged Property.
In the event that the Trust acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, such Mortgaged Property shall be disposed of by the Servicer on
behalf of the Trust before the last day of the third calendar year following the
year in which the foreclosure occurred (the "grace period") unless (i) the
Servicer on behalf of the REMIC Pools has applied for and received an extension
of such grace period pursuant to Code Sections 856(e)(3) and 860G(a)(8)(A), in
which case the Servicer shall sell such Mortgaged Property within the applicable
extension period or (ii) the Trustee and the Certificate Insurer shall have
received an Opinion of Counsel to the effect that the holding by the Trust of
such Mortgaged Property subsequent to the expiration of the grace period will
not result in a tax on prohibited transactions imposed by Code Section
860F(a)(1), or otherwise subject any REMIC Pool to tax or cause any REMIC Pool
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
The Servicer shall further ensure that the Mortgaged Property is administered so
that it constitutes "foreclosure property" within the meaning of Code Section
860G(a)(8) at all times, that the sale of such property does not result in the
receipt by any REMIC Pool of any income from non-permitted assets as described
in Code Section 860F(a)(2)(B), and that no REMIC Pool derives any "net income
from foreclosure property" within the meaning of Code Section 860G(c)(2) with
respect to such property.
Section 3.07 Trustee to Cooperate; Release of Mortgage Files. Upon the
payment in full of the principal balance of any Mortgage Loan, if the Trustee is
holding the Mortgage Files, the Servicer shall notify the Trustee by a
certification in the form of Exhibit H hereto (which certification shall include
a statement to the effect that all amounts received in connection with such
payment which are required to be deposited to the Collection Account pursuant to
Section
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3.02 have been so deposited) of a Servicing Officer. Such notification shall be
made each month at the time that the Servicer delivers its Servicer Remittance
Report to the Trustee pursuant to Section 4.01. Upon any such payment in full,
the Servicer is authorized to procure from such trustee under the Mortgage that
secured the related Mortgage Note a deed of full reconveyance covering the
related Mortgaged Property encumbered by such Mortgage, which deed, except as
otherwise provided in Section 2941(c) of the California Civil Code or other
applicable law, shall be recorded by such trustee in the office of the County
Recorder in which the Mortgage is recorded, or, as the case may be, to procure
from such trustee an instrument of satisfaction or, if the related Mortgagor so
requests, an assignment without recourse, in each case prepared by the Servicer
at its expense and executed by the Trustee, which deed of reconveyance,
instrument of satisfaction or assignment shall be delivered by the Servicer to
the Person entitled thereto, it being understood and agreed that no expenses
incurred in connection with such deed of reconveyance, assignment or instrument
of satisfaction shall be reimbursed from amounts at the time on deposit in the
Collection or Certificate Account. From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, the Trustee shall, upon written
request of the Servicer and delivery to the Trustee of a trust receipt signed by
a Servicing Officer, release the related Mortgage File to the Servicer and shall
execute such documents prepared by the Servicer as shall be necessary to the
prosecution of any such proceedings. Such trust receipt shall state that the
Servicer is holding the Mortgage File in trust for the Trustee and shall
obligate the Servicer to return the Mortgage File to the Trustee when the need
therefor by the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that herein above specified, the trust receipt shall be released by
the Trustee to the Servicer.
Section 3.08 Servicing Compensation; Payment of Certain Expenses by the
Servicer. On each Deposit Date, the Servicer shall be entitled to receive, by
withdrawal by the Servicer from the Collection Account, out of collections of
interest on the Mortgage Loans for the related Collection Period, as servicing
compensation for such Collection Period, the Monthly Servicing Fee. Additional
servicing compensation shall be assumption fees, late payment charges, charges
for checks returned for insufficient funds, or extension and other
administrative charges received by the Servicer (excluding Prepayment Charges)
and any earnings on investments by the Servicer of amounts held in escrow
accounts established thereby on behalf of Mortgagors (any such investments to be
made in compliance with applicable law). The Servicer is obligated to pay
Compensating Interest out of the related Monthly Servicing Fee on each Deposit
Date, to the extent of the amount of the Monthly Servicing Fee, and shall not be
entitled to reimbursement therefor. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder (including
payment of the fees and expenses relating to the Annual Independent Public
Accountant's Servicing Report described in Section 3.10, and all other fees and
expenses not otherwise expressly stated hereunder for the account of the
Certificateholders) and shall not be entitled to reimbursement therefor except
as specifically provided herein.
Section 3.09 Annual Statement as to Compliance.
(a) The Servicer will deliver to the Trustee, the Seller the
Certificate Insurer and each Rating Agency, on or before September 30 of each
year, beginning with September 30, 2001, an
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Officer's Certificate of the Servicer substantially in the form set forth in
Exhibit F hereto stating that (a) a review of the activities of the Servicer
during the preceding calendar year (or since the Closing Date in the case of the
first such statement) and of its performance under this Agreement has been made
under such officer's supervision and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its material
obligations under this Agreement throughout such year (or since the Closing Date
in the case of the first such statement), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee, with a copy to the
Certificate Insurer, the Seller, and each Rating Agency, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice by means of an Officer's Certificate of any event
that with the giving of notice or the lapse of time, or both, would become an
Event of Default.
Section 3.10 Annual Independent Public Accountants' Servicing Report.
On or before May 31 of each year, beginning with May 31, 2001, the Servicer at
its expense shall cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer) to furnish a
report to the Trustee, the Seller, the Certificate Insurer and each Rating
Agency to the effect that such firm has examined certain documents and records
(including the Servicer Remittance Reports delivered by the Servicer during the
period covered by such reports) relating to the servicing activities of the
Servicer (which would include servicing of Mortgage Loans under this Agreement)
for the period covered by such report, and that such examination (which will
have been conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers to the extent that the procedures in
such audit guide are applicable to the servicing obligations set forth in this
Agreement), has disclosed no exceptions or errors in records relating to the
servicing activities of the Servicer, including servicing of Mortgage Loans
subject to this Agreement, that, in the opinion of such firm, are material,
except for such exceptions as shall be set forth in such report.
Section 3.11 Access to Certain Documentation and Information Regarding
the Mortgage Loans.
(a) The Servicer shall provide to Certificateholders that are federally
insured savings associations and the FDIC and its supervisory agents and
examiners access to the documentation regarding the Mortgage Loans required by
applicable regulations of the Office of Thrift Supervision, and to the Trustee
and the Certificate Insurer all documentation relating to the Mortgage Loans
that is in the possession of the Servicer, such access being afforded without
charge but only upon reasonable request and during normal business hours at the
offices of the Servicer. The Servicer shall accurately and fully provide
information regarding payment performance of the Mortgagors to the nationally
recognized credit repositories, to the extent such reporting remains customary
and prudent in the servicing of mortgage loans similar to the Mortgage Loans.
Nothing in this Section shall derogate from the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and
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the failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
(b) The Servicer shall supply information to the Trustee in such form
as the Trustee shall reasonably request, by the start of the third Business Day
preceding each Distribution Date, as is required in the Trustee's reasonable
judgment to enable the Trustee to make required distributions and to furnish the
certificates, statements and reports to Certificateholders required pursuant to
this Agreement.
Section 3.12 Maintenance of Fidelity Bond and Errors and Omissions
Policy. The Servicer shall during the term of its service as Servicer maintain
in force a (a) policy or policies of insurance covering errors and omissions in
the performance of its obligations as Servicer hereunder and (b) fidelity bond
in respect of its officers, employees and agents, in each case having coverage
amounts that satisfy FNMA or FHLMC requirements for mortgage loan originators
and servicers.
Section 3.13 Notices to the Rating Agencies, the Trustee and the
Certificate Insurer. In addition to the other notices required to be given to
the Rating Agencies, the Trustee and the Certificate Insurer by the provisions
of this Agreement, the Servicer shall give notice to each Rating Agency, the
Trustee, the Seller and the Certificate Insurer of (a) any amendment to this
Agreement, (b) the final distribution on the Offered Certificates, (c) the
occurrence of an Event of Default and (d) the repurchase, purchase or
substitution, as applicable, of any Mortgage Loan pursuant to Section 2.03,
2.05, 3.01 or 3.06 by the Seller or Servicer, as the case may be.
Section 3.14 Reports of Foreclosures and Abandonment of Mortgaged
Properties. Each calendar year beginning in 2001 the Servicer shall make the
reports of foreclosures and abandonments of any Mortgaged Property required by
Code Section 6050J. In order to facilitate this reporting process, the Servicer,
on or before February 28th of each year, shall provide to the Internal Revenue
Service and the Trustee reports relating to each instance occurring during the
previous calendar year in which the Servicer (i) on behalf of the Trustee
acquired an interest in a Mortgaged Property through foreclosure or other
comparable conversion in full or partial satisfaction of a Mortgage Loan, or
(ii) knows or has reason to know that a Mortgaged Property has been abandoned.
The reports from the Servicer shall be in form and substance sufficient to meet
the reporting requirements imposed by such Section 6050J.
Section 3.15 Sub-Servicers and Sub-Servicing Agreements.
(a) The Servicer may enter into Sub-Servicing Agreements for any
servicing and administration of Mortgage Loans with any institution that is
acceptable to the Certificate Insurer and that is in compliance with the laws of
each state necessary to enable it to perform its obligations under such
Sub-Servicing Agreement. The Servicer shall give notice to the Certificate
Insurer, the Seller, the Rating Agencies and the PMI Insurer of the appointment
of any Sub-Servicer. The Servicer shall not enter into any Sub-Servicing
Agreement that does not provide for the servicing of the Mortgage Loans
specified therein on a basis consistent with the terms of this Agreement or that
otherwise violates the provisions of this Agreement. The
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Servicer may enter into, and make amendments to, any Sub-Servicing Agreement or
enter into different forms of Sub-Servicing Agreements; provided, however, that
any such amendments or forms shall be consistent with and not violate the
provisions of this Agreement.
(b) For purposes of this Agreement the Servicer shall be deemed to have
received payments on Mortgage Loans when any Sub-Servicer has received such
payments. With respect to the Servicer's obligations under Section 3.01 to make
deposits in the Collection Account, the Servicer shall be deemed to have made
such deposits when any Sub-Servicer has made such deposits into a Sub-Servicing
Account if permitted by the related Sub-Servicing Agreement.
(c) Any Sub-Servicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Sub-Servicer shall be deemed to be
between the Sub-Servicer and the Servicer alone and the Certificate Insurer and
the Trustee shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to any Sub-Servicer,
except that the Trustee and the Certificate Insurer shall have such claims or
rights that arise as a result of any funds held by a Sub-Servicer in trust for
or on behalf of the Trust. Notwithstanding the execution of any Sub-Servicing
Agreement, the Servicer shall not be relieved of any liability hereunder and
shall remain obligated and liable for the servicing and administration of the
Mortgage Loans.
(d) The Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement but only with the prior consent of the Certificate
Insurer. In the event of termination of any Sub-Servicer, all servicing
obligations of such Sub-Servicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Sub-Servicer or the Servicer, and
the Servicer either shall service directly the related Mortgage Loans or shall
enter into a Sub-Servicing Agreement with a successor Sub-Servicer. The
Sub-Servicer shall give written notice to the Trustee, the Seller and the
Certificate Insurer of the termination of any Sub-Servicer.
(e) Any Sub-Servicing Agreement shall include the provision that (i)
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Servicer
shall, for any reason, no longer be the Servicer (including termination due to
an Event of Default) or (ii) clearly and unambiguously states that any
termination fee is the sole responsibility of the Servicer and none of the
Trust, the Trustee, the Seller, the Certificateholders or the Certificate
Insurer has any liability therefor, regardless of the circumstances surrounding
such termination.
Section 3.16 Prefunding Account.
(a) If a Prefunding Account is specified in Article I, the Trustee will
establish and maintain the Prefunding Account. No later than the Closing Date,
the Trustee will deposit in the Prefunding Account the Prefunding Account
Deposit from the proceeds of the sale of the Offered Certificates. Subject to
this Section, upon the conveyance of Subsequent Mortgage Loans to the Trust on
any Subsequent Transfer Date, the Seller shall instruct the Trustee to withdraw
from the
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Prefunding Account (i) an amount equal to the Subsequent Purchase Price for the
Subsequent Mortgage Loans to be included in each Mortgage Loan Group and make a
corresponding reduction in the amount on deposit in the Prefunding Account
allocated to such Mortgage Loan Group, and to pay such amount to or upon the
order of the Seller upon satisfaction of the conditions set forth in Section
2.02 of this Agreement with respect to such transfer.
(b) The Prefunding Account will be part of the Trust but not part of
any REMIC Pool. Amounts held in the Prefunding Account shall be invested in
Permitted Investments of the type specified in clause (f) of the definition of
Permitted Investments. The Trustee shall not be liable for any losses on amounts
invested in accordance with the provisions hereof. Any losses realized in
connection with any such investment shall be for the account of the Seller and
the Seller shall deposit the amount of such loss (to the extent not offset by
income from other investments) in the Prefunding Account immediately upon the
realization of such loss. All interest and any other investment earnings on
amounts held in the Prefunding Account shall be taxed to the Seller and for
federal and state income tax purposes the Seller shall be deemed to be the owner
of the Prefunding Account. All interest and any other investment earnings on
amounts held in the Prefunding Account shall be paid by the Trustee to the
Seller on the Distribution Date next following the end of the Funding Period.
(c) On the Distribution Date next following the end of the Funding
Period, any amounts remaining in the Prefunding Account (net of reinvestment
earnings payable to the Seller) shall be deposited at such time into the
Certificate Account for distribution in the related allocated amounts as part of
the Principal Distribution Amount for the related Certificate Group on such
Distribution Date.
Section 3.17 Capitalized Interest Account.
(a) Unless all Subsequent Mortgage Loans are purchased by the Trust on
the Closing Date, or unless a Capitalized Interest Account is not specified in
Article I, the Trustee shall establish and maintain the Capitalized Interest
Account. On the Closing Date, the Trustee will deposit the Capitalized Interest
Account Deposit in the Capitalized Interest Account or, if all Subsequent
Mortgage Loans are purchased on the Closing Date, in the Certificate Account.
The Trustee shall hold the Capitalized Interest Account Deposit for the benefit
of the Offered Certificateholders.
(b) The Capitalized Interest Account will be part of the Trust but not
part of any REMIC Pool. Amounts held in the Capitalized Interest Account prior
to the first Deposit Date shall be invested in Permitted Investments of the type
specified in clause (e) of the definition of Permitted Investments, which
Permitted Investments shall mature no later than the Deposit Date immediately
following the end of the Funding Period. The Trustee shall not be liable for any
losses on amounts invested in accordance with the provisions hereof. All
interest and other investment earnings on amounts held in the Capitalized
Interest Account (and any other amounts remaining on deposit therein in excess
of the amounts to be so withdrawn and deposited into the Certificate Account)
shall be paid or released by the Trustee to the Seller on the Distribution Date
immediately following the end of the Funding Period and taxed to the Seller. For
federal
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and state income tax purposes the Seller shall be deemed to be the owner of the
Capitalized Interest Account. Any losses realized in connection with any such
investment shall be for the account of the Seller and the Seller shall deposit
the amount of such loss (to the extent not offset by income from other
investments) in the Capitalized Interest Account immediately upon the
realization of such loss. All amounts earned on deposit in the Capitalized
Interest Account shall be taxed to the Seller.
(c) On each Prefunding Distribution Date, the Trustee shall transfer
from the Capitalized Interest Account to the Certificate Account the Capitalized
Interest Requirement, if any, for such Distribution Date; provided, however,
that on the final Subsequent Transfer Date the Trustee shall (i) transfer the
Capitalized Interest Requirement, if any, for the following Distribution Date
from the Capitalized Interest Account to the Certificate Account, (ii) remit the
balance of the funds on deposit in the Capitalized Interest Account to the
Seller and (iii) close the Capitalized Interest Account.
Section 3.18 Payments on the Certificate Insurance Policy.
(a) The Trustee will establish and maintain the Policy Payments
Account, a separate special purpose trust account for the benefit of the Offered
Certificateholders and the Certificate Insurer. The Trustee shall deposit or
cause to be deposited any Insured Payments paid under the Certificate Insurance
Policy and received by the Trustee in the Policy Payments Account and distribute
such amounts only for the purpose of payment to the related Offered
Certificateholders of the related Insured Payments and such amounts may not be
used to satisfy any costs, expenses or liabilities of the Servicer, the Trustee
or the Trust. Insured Payments deposited in the Policy Payments Account shall
not be invested in Permitted Investments or otherwise, and shall be transferred
to the Certificate Account on the related Distribution Date and disbursed by the
Trustee to the related Offered Certificateholders in accordance with Section
5.01.
As soon as possible, and in no event later than 9:00 a.m. (Los Angeles
time) on the fourth Business Day immediately preceding the related Distribution
Date, the Trustee shall determine whether a Deficiency Amount is required to be
paid under the Certificate Insurance Policy with respect to such Distribution
Date and, if so, shall immediately notify the Servicer by telephone, which
notice shall be confirmed in writing by facsimile transmission, of the Trustee's
intention so to file the applicable Notice of Claim. If by the close of business
in Los Angeles on such date a Deficiency Amount is still required to be paid
under the Certificate Insurance Policy with respect to such Distribution Date,
the Trustee shall furnish the Certificate Insurer (or an agent of the
Certificate Insurer designated to the Trustee in writing) with a completed
Notice of Claim in respect of such Deficiency Amount by 12:00 noon New York City
time on the next succeeding Business Day and shall provide a copy thereof to the
Servicer at or prior to the time such Notice of Claim is received by the
Certificate Insurer. The Notice of Claim shall constitute a claim therefor
pursuant to the Certificate Insurance Policy. In the event any funds are
received by the Trustee from the Servicer prior to the close of business in Los
Angeles on the Business Day following the transmission of a Notice of Claim to
the Certificate Insurer (or an agent of the Certificate Insurer designated to
the Trustee in writing), and such funds reduce the amount of the Deficiency
Amount to which such
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Notice of Claim relates, the Deficiency Amount to which such Notice of Claim
relates shall be reduced by a corresponding amount, and the Notice of Claim
shall be deemed to have been rescinded to the extent of the reduction of the
Deficiency Amount. Notification of any such reduction in the Insured Payment
shall be given to the Certificate Insurer (or an agent of the Certificate
Insurer designated to the Trustee in writing) by the Trustee by no later than
9:00 A.M., New York time, on the related Distribution Date. The Certificate
Insurer shall pay amounts due pursuant to the Certificate Insurance Policy in
accordance with the terms of the Certificate Insurance Policy.
(b) The Trustee shall, as necessary, make a claim on the Certificate
Insurance Policy in respect of Preference Amounts in accordance with the terms
of the Certificate Insurance Policy.
(c) The Trustee shall receive, as attorney-in-fact for each Offered
Certificateholder, any Insured Payment allocable to such Offered Certificates,
from the Certificate Insurer and disburse the same in accordance with the
provisions of Section 5.01. Any portion of the distributions made by the Trustee
in respect of any Insured Payment, from proceeds of the Certificate Insurance
Policy shall not be considered payment by the Trust, nor shall such payments
discharge the obligation of the Trust with respect to such Offered
Certificateholders, and the Certificate Insurer shall become the owner of such
unpaid amounts in respect of such Offered Certificates. The Trustee hereby
agrees on behalf of each Offered Certificateholder for the benefit of the
Certificate Insurer that it recognizes that: to the extent the Certificate
Insurer pays any Insured Payments in respect of the Offered Certificates, either
directly or indirectly (as by paying through the Trustee), to the Offered
Certificateholders, the Certificate Insurer will be subrogated to the rights of
such Offered Certificateholders with respect to such Insured Payments paid in
respect of such Offered Certificateholders, shall be deemed to the extent of the
Insured Payments so paid in respect of such Certificateholders, to be a
registered Holder of such Offered Certificates and shall be entitled to receive
all future distributions on such Offered Certificates until all such Insured
Payments (together with interest thereon at the related Late Payment Rate from
the date paid until the date of reimbursement thereof) have been fully
reimbursed, in each case subject to the following paragraph. To evidence such
subrogation, the Trustee shall note the Certificate Insurer's rights as subrogee
on the registration books maintained by the Trustee. Except as otherwise
described herein, the Certificate Insurer shall not acquire any voting rights
hereunder as a result of such subrogation. The effect of the foregoing
provisions is that, to the extent of any Insured Payments made by it on each
Distribution Date, the Certificate Insurer shall be paid before any other
distributions are made to the Offered Certificateholders.
(d) The Trustee shall be entitled to enforce on behalf of the Offered
Certificateholders the obligations of the Certificate Insurer under the
Certificate Insurance Policy. The Offered Certificateholders are not entitled to
institute proceedings directly against the Certificate Insurer. Each Offered
Certificateholder, by its purchase of Offered Certificates, the Servicer and the
Trustee hereby agree that the Certificate Insurer 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, the direction
of any appeal of any order relating to such preference claim and the posting of
any surety, supersedeas or performance bond pending any such appeal. In addition
and without limitation of the foregoing, the Certificate Insurer shall be
subrogated to
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the rights of the Servicer, the Trustee and each Offered Certificateholder in
the conduct of any such preference claim, including, without limitation, all
rights of any party to an adversary proceeding action with respect to any court
order issued in connection with any such preference claim.
(e) The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Offered Certificate from monies
received under the Certificate Insurance Policy. The Certificate Insurer shall
have the right to inspect such records at reasonable times during normal
business hours upon one Business Day's notice to the Trustee.
Section 3.19 Rights of the Certificate Insurer to Exercise Rights of
Offered Certificateholders. By accepting its Certificate, each Offered
Certificateholder agrees that unless a Certificate Insurer Default exists, the
Certificate Insurer shall have the right to exercise all rights of the Offered
Certificateholders under this Agreement without any further consent of the
Offered Certificateholders, including, without limitation:
(i) the right to direct foreclosures upon Mortgage Loans upon
failure of the Servicer to do so;
(ii) the right to require the Seller to repurchase or
substitute for, or to require the Servicer to purchase, Mortgage Loans
pursuant to Sections 2.05 and 2.09; and
(iii) the right to direct the actions of the Trustee during
the continuance of an Event of Default.
In addition, each Offered Certificateholder agrees that, unless a
Certificate Insurer Default exists, the rights specifically set forth above may
be exercised by the Offered Certificateholders only with the prior written
consent of the Certificate Insurer.
Section 3.20 Trust and Accounts Held for Benefit of the Certificate
Insurer. Provided there does not exist a Certificate Insurer Default, the
Trustee shall hold the Trust and the Mortgage Files for the benefit of the
Certificateholders and the Certificate Insurer and all references in this
Agreement (including, without limitation, in Sections 2.01, 2.02 and 2.03) and
in the Certificates to the benefit of Holders of the Certificates shall be
deemed to include the Certificate Insurer.
Provided there does not exist a Certificate Insurer Default, the
Servicer hereby acknowledges and agrees that it shall service and administer the
Mortgage Loans and any REO Properties, and shall maintain the Collection Account
for the benefit of the Certificateholders and for the benefit of the Certificate
Insurer, and all references in this Agreement to the benefit of or actions on
behalf of the Certificateholders shall be deemed to include 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
shall also be sent to the Certificate Insurer.
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Section 3.21 Supplemental Interest Reserve Fund. The Trustee will
establish the Supplemental Interest Reserve Fund on the Closing Date. On the
Closing Date, the Class C Certificateholders will deposit, or cause to be
deposited, into the Supplemental Interest Reserve Fund $10,000. On each
Distribution Date as to which there is a Supplemental Interest Amount, the
Trustee has been directed by the Class C Certificateholders to, and therefor
will, deposit into the Supplemental Interest Reserve Fund the amounts described
in Section 5.01(b)(8), rather than distributing such amounts to the Class C
Certificateholders. On each such Distribution Date, the Trustee shall (i) hold
all such amounts in respect of Adjustable Rate Group I for the benefit of the
Adjustable Rate Group I Certificateholders, and will distribute such amounts to
the Class A-V1 Certificateholders pursuant to Section 5.01(b)(8) as part of the
Accrued Certificate Interest on the Class A-V1 Certificates (ii) hold all such
amounts in respect of Adjustable Rate Group II for the benefit of the Adjustable
Rate Group II Certificateholders, and will distribute such amounts to the Class
A-V2 Certificateholders pursuant to Section 5.01(b)(8) as part of the Accrued
Certificate Interest on the Class A-V2 Certificates . If no Supplemental
Interest Amounts are payable on a Distribution Date, the Trustee shall deposit
into the Supplemental Interest Reserve Fund on behalf of the Class C
Certificateholders an amount such that when added to other amounts already on
deposit in the fund, the aggregate amount on deposit therein is equal to
$10,000. For federal and state income tax purposes, the Class C
Certificateholders will be deemed to be the owners of the Supplemental Interest
Reserve Fund and all amounts deposited into the Supplemental Interest Reserve
Fund (other than the initial $10,000 deposit) shall be treated as amounts
distributed by REMIC II with respect to the Class C Distribution Amount and
Class C Carryforward Amount. Related amounts held in the Supplemental Interest
Reserve Fund and not distributable to the Class A-V1 and Class A-V2
Certificateholders, respectively, on any Distribution Date will be invested by
the Trustee in investments designated by the Class C Certificateholders having
maturities on or prior to the next succeeding Distribution Date on which such
related amounts will be distributable to the Class A-V1 and Class A-V2
Certificateholders, respectively. Upon the termination of the Trust, or the
payment in full of the Class A-V1 and Class A-V2 Certificates, all amounts
remaining on deposit in the Supplemental Interest Reserve Fund will be released
from the lien of the Trust and distributed to the Class C Certificateholders or
their designees. The Supplemental Interest Reserve Fund will be part of the
Trust but not part of any REMIC Pool and any payments to the Class A-V1 and
Class A-V2 Certificates of related Supplemental Interest Amounts will not be
payments with respect to a "regular interest" in a REMIC within the meaning of
Code Section 860G(a)(1).
Section 3.22 Covenants and Representations Regarding Prepayment
Charges. (a) The Servicer will not waive any Prepayment Charge or part of a
Prepayment Charge unless in connection with a Mortgage Loan that is in default
or for which a default is reasonably foreseeable.
(b) 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 at the date or dates respecting which 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)
under applicable state law.
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(c) Upon discovery by the Seller, the Servicer or a Responsible Officer
of the Trustee of a breach of the foregoing, which materially and adversely
affects the right of the Holders of the Class P Certificates to any Prepayment
Charge, the party discovering such breach shall give prompt written notice to
the other parties. Within 60 days of the earlier of discovery by the Servicer or
the Seller, as the case may be, or receipt of notice by the Servicer or the
Seller, as the case may be, of a breach of clause (a) or (b) above, then in the
case of clause (a) above the Servicer shall cure such breach in all material
respects and in the case of clause (b) above the Seller shall cure such breach
in all material respects. If the covenant in clause (a) above is breached, the
Servicer must pay into the Collection Account the amount of the waived
Prepayment Charge. If the representation in clause (b) above is breached, in
addition to any rights the Trustee and the Certificate Insurer may have
hereunder, the Seller must pay into the Collection Account the amount of the
scheduled Prepayment Charge, less any amount previously collected and paid by
the Servicer into the Collection Account.
Section 3.23. Claims Upon the PMI Policy. The Servicer shall, on behalf
of the Trust, prepare and file in a timely basis with the PMI Insurer, with a
copy to the Trustee and the Certificate Insurer, all claims that may be made
under the PMI Policy with respect to PMI Mortgage Loans. Consistent with its
rights and obligations hereunder, the Servicer shall take all actions required
under the PMI Policy as a condition to the payment of any such claim. Any amount
received from the PMI Insurer with respect to any PMI Mortgage Loan shall be
deposited by the Servicer, not later than the Business Day following receipt
thereof, into the Certificate Account for distribution on the related
Distribution Date as part of Liquidation Proceeds for the related Mortgage Loan
Group.
ARTICLE IV
REMITTANCE REPORT
Section 4.01 Servicer Remittance Report. With respect to each
Distribution Date, not later than the fifth Business Day prior to the related
Deposit Date the Servicer shall deliver to the Trustee, the Seller and the
Certificate Insurer a computer-readable magnetic tape or disk containing the
Servicer Remittance Report detailing the payments and collections received in
respect of the Mortgage Loans in each Mortgage Loan Group during the immediately
preceding Collection Period. The computer-readable magnetic tape or disk shall
include loan-by-loan information that specifies account number, borrower name,
outstanding principal balance and activity since the last Distribution Date.
Such tape shall be in the form and have the specifications as may be agreed to
among the Servicer, the Trustee, the Seller and the Certificate Insurer from
time to time and shall include information concerning original loan-to-value
ratios, the lien positions of and number of days contractually delinquent of the
Mortgage Loans and information necessary to calculate Delinquency Rate Events,
Cumulative Loss Rate Events, Rolling Loss Rate Events and Targeted
Overcollateralization Amounts.
In addition to the foregoing, the Servicer shall provide the Trustee,
the Seller and the Certificate Insurer at the time the tape is delivered to the
Trustee a Liquidation Report with
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respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the
related Collection Period substantially in the form of Exhibit I hereto.
Section 4.02 Trustee Distribution Date Statement. The Trustee shall,
not later than the Business Day prior to each Deposit Date, furnish by telecopy
to the Servicer, the Seller and the Certificate Insurer a statement derived from
information on the Servicer Remittance Report that sets forth the following
information for the Offered Certificates relating to the next succeeding
Distribution Date:
(a) the total amount of payments in respect of or allocable to
interest on the Mortgage Loans received or deemed to have been received
from the related Mortgagors by the Servicer during such Collection
Period (including any net income from REO Properties received during
the related Collection Period);
(b) the aggregate amount of all Principal Prepayments received
from the related Mortgagors by the Servicer during such Collection
Period;
(c) the aggregate amount of all Principal Payments received or
deemed to have been received from the related Mortgagors by the
Servicer during such Collection Period;
(d) the total amount of Payments Ahead received during the
related Collection Period;
(e) the aggregate of any Trust Insurance Proceeds received by
the Servicer during such Collection Period;
(f) the aggregate of any Net Liquidation Proceeds received by
the Servicer during such Collection Period;
(g) the total amount of Compensating Interest payments to be
paid by the Servicer pursuant to Section 3.08;
(h) the aggregate Purchase Prices for (i) any Defective
Mortgage Loans that the Seller is required to repurchase on the related
Deposit Date pursuant to Section 2.03 or 2.05 and (ii) any Mortgage
Loan that the Servicer is required to purchase on the related Deposit
Date pursuant to Section 3.01 or 3.06;
(i) any amounts required to be deposited by the Seller on the
related Deposit Date in connection with the substitution of a Qualified
Replacement Mortgage Loan pursuant to Section 2.03 or 2.05;
(j) the amount of Monthly Advances to be made by the Servicer
pursuant to Section 5.02(a);
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(k) the related Monthly Servicing Fee attributable to the
Mortgage Loans in the related Mortgage Loan Group;
(l) the amount of Monthly Advances reimbursable to the
Servicer in such Collection Period pursuant to Section 5.02(a) and not
previously reimbursed;
(m) the amount of any Servicing Advance made by the Servicer
pursuant to Section 5.02(b) and not previously reimbursed;
(n) the amount of any Interest Shortfall for the related
Distribution Date;
(o) the number and Principal Balance of Mortgage Loans in each
Mortgage Loan Group that, as of the end of the preceding calendar month
were (i) 30 or more days contractually delinquent, (ii) 60 or more days
contractually delinquent, (iii) 90 or more days contractually
delinquent, (iv) in foreclosure, (v) as to which the Mortgagor is in
bankruptcy to the knowledge of the Servicer, or (vi) as to which the
related Mortgaged Property was an REO Property;
(p) the dollar amount of (i) claims paid by the PMI Insurer
under the PMI Policy as of the related Distribution Date as reported by
the Servicer and (ii) the claims denied by the PMI Insurer under the
PMI Policy as of the related Distribution Date as reported by the
Servicer;
(q) Prepayment Charges collected for the related Distribution
Date; and
(r) the Pass-Through Rates for each Class of Offered
Certificates.
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS
Section 5.01 Distributions. (a) On each Distribution Date, the Trustee
shall distribute to each Certificateholder of record on the related Record Date
(other than as provided in Section 10.01 respecting the final distribution to
Certificateholders if the termination of the Trust is in connection with a
purchase of the assets of the Trust by the Servicer pursuant to Section 10.01)
by check or money order mailed to such Certificateholder at the address
appearing in the Certificate Register, or upon written request by a Holder of a
Certificate, by wire transfer (in the event such Certificateholder owns of
record one or more Certificates that have principal denominations aggregating at
least $5,000,000 and has given the Trustee, at least five Business Days prior to
the related Record Date, written instruction for making such wire transfer to a
bank account maintained in the United States), or by such other means of payment
as such Certificateholder and the Trustee shall agree, such Certificateholder's
Percentage Interest of the amounts (to the extent applicable to the Class of
such Holder's Certificate) and in the following orders of priority with respect
to each Mortgage Loan Group. Notwithstanding such priorities, the aggregate of
amounts distributed on all Distribution Dates in reduction of the Certificate
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Principal Balance of any Class shall not exceed the Certificate Principal
Balance of such Class as of the Closing Date.
(b) On each Distribution Date, the Trustee shall withdraw the
Available Funds for each Mortgage Loan Group from the Certificate
Account and apply such amounts in the following order of priority, in
each case, to the extent of the funds remaining therefor:
1. Concurrently, to the Trustee, the Trustee Fee, to
the Servicer, the Monthly Servicing Fee and the applicable PMI
Insurer Premium, if any, paid by the Servicer (to the extent
not otherwise reimbursed from the Collection Account) to the
PMI Insurer, the PMI Insurer Premium, if any (to the extent
not paid by the Servicer) and to the Certificate Insurer, the
Certificate Insurer Premium, in each case for such Mortgage
Loan Group and Distribution Date.
2. Concurrently, to the Class of Offered Certificates
in the related Certificate Group, the related Accrued
Certificate Interest and Interest Carry Forward Amount for
such Class of Certificates for such Distribution Date.
3. To the Class of Offered Certificates in the
related Certificate Group, an amount up to the related
Principal Distribution Amount as follows:
A. Fixed Rate Group in the following order
of priority:
(i) to the Class A-6F Certificates,
the Class A-6F Lockout Distribution Amount,
until the Certificate Principal Balance
thereof has been reduced to zero; and
(ii) sequentially, to the Class
X-0X, Xxxxx X-0X, Xxxxx X-0X, Class A-4F,
Class A-5F and Class A-6F Certificates, in
that order, until the respective Class
Certificate Principal Balances thereof have
been reduced to zero;
Notwithstanding the priorities set forth in this
clause A, if a Certificate Insurer Default has occurred and is
continuing, the Fixed Rate Group Principal Distribution Amount
will be distributed concurrently to each Class of Fixed Rate
Group Certificates on a pro rata basis in accordance with
their respective Class Certificate Principal Balances.
B. Adjustable Rate Group I:
The Adjustable Rate Group I
Principal Distribution Amount to the Class
A-V1 Certificates, until the Certificate
Principal Balance thereof has been reduced
to zero.
C. Adjustable Rate Group II:
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The Adjustable Rate Group II
Principal Distribution Amount to the Class
A-V2 Certificates, until the Certificate
Principal Balance thereof has been reduced
to zero.
4. To the Certificate Insurer, any amounts owing
under the Insurance Agreement.
5. To the Holders of Certificates in either or both
of the other Certificate Groups, the amount of any applicable
Available Funds Shortfall for such other Certificate Group or
Groups, allocated pursuant to subsection (c) below.
6. To the Class of Offered Certificates in the
related Certificate Group, an amount up to the Extra Principal
Distribution Amount for such Certificate Group and
Distribution Date until the related Targeted
Overcollateralization Amount is reached, allocated in the same
order of priority as provided in clause 3 above.
7. To the Class of Offered Certificates in either or
both of the other Certificate Groups, any applicable Target
Deficiency for such Certificate Group or Groups remaining
after the distributions pursuant to clause 6 above, allocated
pursuant to subsection (c) below.
8. To fund a distribution to Class C
Certificateholders of the Class C Distribution Amount plus any
Class C Carryforward Amount; provided that, pursuant to
Section 3.21 hereof, on any Distribution Date as to which
there is any unpaid Supplemental Interest Amount, the Trustee
will deposit from amounts that would otherwise be
distributable to the Class C Certificateholders funds into the
Supplemental Interest Reserve Fund for immediate application
pursuant to this clause of the distribution of the related
Supplemental Interest Amount to the Class A-V1 or Class A-V2
Certificates, in proportion to their respective Supplemental
Interest Amounts , and such deposit will constitute payment in
full of and satisfaction of all obligations hereunder to
distribute amounts equal to the related Supplemental Interest
Amounts to the Class C Certificateholders, including for
purposes of Section 9.16, and the Trustee, the Servicer and
the Class C Certificateholders agree hereby appropriately to
report any deposit of Supplemental Interest Amounts as if
corresponding distributions had been made to the Class C
Certificateholders for federal income tax and accounting
purposes with respect to the Class C Distribution Amount and
Class C Carryforward Amount. (All distributions or deemed
distributions with respect to the Class C Distribution Amount
and Class C Carryforward Amount shall be applied first to the
interest components of such amounts and second to reduce the
Class C Certificate Principal Balance).
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9. To the Class R Certificates, the remainder.
(c) If the Available Funds for one or more Mortgage Loan
Groups is available to be allocated against an Available Funds
Shortfall or a Target Deficiency for one or both of the other Mortgage
Loan Groups pursuant to clauses (b) 5. and 7. above, the Trustee shall
allocate such amounts as follows:
(i) if an Available Funds Shortfall or a Target
Deficiency exists for only one Mortgage Loan Group
and excess Available Funds exist for only one
Mortgage Loan Group, the Trustee shall allocate such
excess Available Funds to the Mortgage Loan Group
with the Available Funds Shortfall or Target
Deficiency up to the amount of such Available Funds
shortfall or Target Deficiency;
(ii) if an Available Funds Shortfall or a Target
Deficiency exists for only one Mortgage Loan Group
and excess Available Funds exists for both other
Mortgage Loan Groups, the Trustee shall allocate the
excess Available Funds from such other Mortgage Loan
Groups sequentially, FIRST if the Fixed Rate Group
has such excess Available Funds from the Fixed Rate
Group up to the amount of such Available Fund
shortfall or Target Deficiency, until its excess
Available Funds have been reduced to zero, SECOND if
the Adjustable Rate Group I has such excess Available
Funds, from Adjustable Rate Group I up to the amount
of such Available Fund shortfall or Target
Deficiency, until its excess Available Funds have
been reduced to zero and THIRD if the Adjustable Rate
Group II has such excess Available Funds, from
Adjustable Rate Group II up to the amount of such
Available Fund shortfall or Target Deficiency, until
its excess Available Funds have been reduced to zero,
as applicable;
(iii) if an Available Funds Shortfall or a Target
Deficiency exists for two Mortgage Loan Groups and
excess Available Funds for the other Mortgage Loan
Group is insufficient to cover the Available Funds
Shortfall or Target Deficiency for the two Mortgage
Loan Groups, the Trustee shall allocate the excess
Available Funds up to the amount of such Available
Fund shortfall or Target Deficiency, pro rata, based
upon the amounts of such Available Funds Shortfall or
Target Deficiency Amount;
with respect to amounts allocated pursuant to this subsection (c),
excess Available Funds shall be allocated first to amounts in respect
of interest, and then to amounts in respect of principal.
(d) With respect to any Distribution Date, in the event of an
Insured Payment, the Trustee shall make such payments from the amount
drawn under the Certificate Insurance Policy for such Distribution Date
pursuant to Section 5.01. Any Insured Payment not required to make
distributions pursuant to Section 5.01 shall be returned to the
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Certificate Insurer. The Trustee shall allocate any Insured Payment
first to any Accrued Certificate Interest remaining unpaid after giving
effect to all distributions pursuant to Section 5.01(b) and second to
the payment of each Class' applicable Coverage Deficit.
(e) By accepting a Class C Certificate, each Class C
Certificateholder hereby agrees to direct the Trustee, and the Trustee
hereby is directed, to deposit into the Supplemental Interest Reserve
Fund the amounts described in Section 3.21 on each Distribution Date as
to which there is any Supplemental Interest Amount rather than
distributing such amounts to the Class C Certificateholders. By
accepting a Class C Certificate, each Class C Certificateholder further
agrees that such direction is given for good and valuable
consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.
(f) On each Distribution Date, the Trustee shall make
distributions to the Holders of the Class P Certificates of all
Prepayment Charges on deposit in the Certificate Account with respect
to the Mortgage Loans in each Mortgage Loan Group during the related
Collection Period. Such Prepayment Charges will not be available for
distributions to the Holders of the other Classes of Certificates and
shall not reduce the Class P Certificate Principal Balance. If at any
time the Pool Balance is $15,000 or less, the Trustee shall withdraw a
portion of the Class P Deposit from the Certificate Account and apply
such amount to the Class P Certificate Principal Balance such that the
remaining Class P Deposit is always less than 0.66% of the sum of the
Pool Balance and the remaining Class P Deposit. After all of the
Certificates (other than the Class P Certificates) have been paid in
full, the Trustee shall withdraw the remaining Class P Deposit from the
Certificate Account and apply such amount to reduce the Class P
Certificate Principal Balance to zero.
Notwithstanding any of the foregoing, the aggregate of amounts
distributed on all Distribution Dates in reduction of the Certificate
Principal Balance of any Class of Certificates shall not exceed the
Certificate Principal Balance of such Class as of the Closing Date.
Amounts to be paid to the Certificate Insurer by the Trustee
under this Agreement will be paid by wire transfer of same day funds.
Section 5.02 Monthly Advances; Servicing Advances.
(a) On or before each Deposit Date, the Servicer will deposit in the
Certificate Account in respect of each Mortgage Loan Group, in same day funds,
an amount, if any (a "Monthly Advance"), equal to the sum of (i) with respect to
all Mortgage Loans that are delinquent as of the close of business on the
related Determination Date, the aggregate of the interest portions of each
Monthly Mortgage Payment in respect of the related Mortgage Loan Group due
during the related Collection Period (net of the aggregate of the Monthly
Servicing Fees for each Mortgage Loan Group attributable to such Mortgage
Loans), inclusive of those amounts representing the interest portions of Monthly
Mortgage Payments due during the first Collection Period, plus (ii) with respect
to each Mortgaged Property that was acquired in
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foreclosure or similar action (each, an "REO Property") during or prior to the
related Collection Period and as to which a final sale did not occur during the
related Collection Period, an amount equal to the excess, if any, of interest on
the Principal Balance of such REO Property at the related Mortgage Loan Rate
(net of the Monthly Servicing Fee attributable to such REO Property) over the
net income from such REO Property transferred to the Collection Account or the
Certificate Account, as the case may be, for such Distribution Date; provided,
however, that in no case will the Servicer be required to make advances with
respect to any period or portion of any Collection Period following (i) the
final due date with respect to any Mortgage Loan and (ii) to the extent that the
Servicer reasonably believes that the amount of such advance will not be
recoverable from subsequent collections on the related Mortgage Loan or from
Liquidation Proceeds from the related Mortgage Loan in the event such Mortgage
Loan is liquidated.
The Servicer shall be permitted to fund all or a portion of any Monthly
Advance required to be made on a Deposit Date on any Business Day and to
reimburse itself for any Monthly Advance paid from the Servicer's own funds out
of amounts on deposit in the Collection Account in respect of collections on any
Mortgage Loan in the related Mortgage Loan Group that are not required to be
deposited on such Deposit Date in the Certificate Account as any portion of
Available Funds for such Mortgage Loan Group and the related Distribution Date;
provided, however, that the Servicer shall be required to replace any such
amounts by deposit to the Collection Account on or before the next Deposit Date
and the amount of such deposit shall thereafter be considered a Monthly Advance
for purposes of reimbursement under this Agreement. The Servicer may recover
Monthly Advances made from its own funds (i) from the Mortgagor on whose behalf
such Monthly Advance was made and from collections on the related Mortgage Loan,
including Liquidation Proceeds, Insurance Proceeds and such other amounts as may
be collected by the Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan and (ii) in the case of a Monthly Advance that the Servicer
reasonably believes will not be recoverable from the related Mortgage Loan, from
collections or recoveries on any Mortgage Loan in the related Mortgage Loan
Group, in each case prior to the payment of such amounts to the Collection
Account or to any other party to this Agreement.
(b) The Servicer shall from time to time during the term of this
Agreement make such Servicing Advances as the Servicer shall deem appropriate or
advisable under the circumstances and are required pursuant to the terms of this
Agreement. Servicing Advances may be paid by the Servicer out of amounts on
deposit in the Collection Account in respect of the related Mortgage Loan Group
from time to time; provided, however, that the Servicer shall be required to
replace any such amounts by deposit to the Collection Account in respect of the
related Mortgage Loan Group on or before the first Deposit Date occurring after
the payment of a Servicing Advance with such amounts, and the amount of such
deposit shall thereafter be considered a Servicing Advance for purposes of
reimbursement under this Agreement. All Servicing Advances made by the Servicer
shall be reimbursable from collections or recoveries relating to the Mortgage
Loans in respect of which such Servicing Advances have been made prior to the
payment of such amounts to the Collection Account or to any other party to this
Agreement. Notwithstanding anything herein to the contrary, no Servicing
Advances need by made hereunder if such Servicing Advance would, if made,
constitute a Nonrecoverable Advance.
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Section 5.03 Statements to Certificateholders. Concurrently with each
distribution charged to the Certificate Account on a Distribution Date the
Trustee shall forward to the Certificate Insurer and each Rating Agency and
shall mail to each Holder of a Certificate, a written statement setting forth
the following information with respect to the applicable subclass of Offered
Certificates to which such statement (a "Statement to Certificateholders")
relates:
(a) the amount of the distribution with respect to each Class
of Certificates (based on a Certificate in the Original Principal
Amount of $1,000);
(b) the amount of such distribution allocable to principal on
the related Mortgage Loans in each Mortgage Loan Group, separately
identifying the aggregate amount of any Prepayments or other recoveries
of principal included therein;
(c) the amount of such distribution allocable to interest on
the related Mortgage Loans in each Mortgage Loan Group separately
identifying the aggregate amount of any prepayment or other recoveries
of principal included therein;
(d) the Accrued Certificate Interest and Interest Carry
Forward Amount for each Class of Certificates;
(e) the outstanding Certificate Principal Balance of each
Class of Offered Certificates (based on a Certificate in the Original
Principal Amount of $1,000) that will be outstanding after giving
effect to any payment of principal on such Distribution Date;
(f) the aggregate of the Principal Balances of all Mortgage
Loans after giving effect to any payments of principal on such
Distribution Date by Mortgage Loan Group and for the entire Trust, and
each Group Factor;
(g) based upon information furnished by the Servicer, such
information as may be required by Section 6049(d)(7)(C) of the Code and
the regulations promulgated thereunder to assist the Certificateholders
in computing their market discount;
(h) the total of all amounts paid by the Seller and the
Servicer during the related Collection Period in connection with
purchases or repurchases from the Trust of Mortgage Loans and
substitutions for Mortgage Loans of Qualified Replacement Mortgage
Loans with respect to each Mortgage Loan Group and by reason for such
purchase;
(i) the weighted average Mortgage Loan Rate of the Mortgage
Loans in each Mortgage Loan Group;
(j) whether a Delinquency Rate Event, a Cumulative Loss Rate
Event or a Rolling Loss Rate Event has occurred and, if so, what event;
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(k) the amount of any Extra Principal Distribution Amount
included in such distribution;
(l) the related Overcollateralization Amount and Targeted
Overcollateralization Amount, Realized Losses, the Loss Percentage, the
Annual Loss Percentage and the Delinquency Percentage for each Mortgage
Loan Group;
(m) the amount, if any, of Insured Payments distributable to
each Class of Certificates on such Distribution Date, the Certificate
Insurer Premium paid on such Distribution Date, and the aggregate
amount of Insured Payments, interest thereon and previously unpaid
Certificate Insurer Premiums paid on such Distribution Date and
remaining to be paid on such Distribution Date or any future
Distribution Date;
(n) the amount of any Supplemental Interest Amounts paid and
remaining unpaid as of such Distribution Date;
(o) the Capitalized Interest Requirement and amounts remaining
in the Prefunding Account each as of such Distribution Date;
(p) the amount of any draw to be made on the PMI Policy on the
related Distribution Date, and the amounts to be paid to the PMI
Insurer, if any, as of such Distribution Date in respect of the PMI
Insurer Premium with respect to each Mortgage Loan Group;
(q) with respect to each Mortgage Loan Group, the number of
Mortgage Loans in each Mortgage Loan Group and the aggregate of their
Principal Balances as a percentage of the Fixed Rate Group Balance,
Adjustable Rate Group I Balance or Adjustable Rate Group II Balance, as
appropriate, that as of the end of the immediately preceding calendar
month are (i) 30 to 59 days delinquent, (ii) 60 to 89 days delinquent,
(iii) 90 or more days delinquent, (iv) the subject of bankruptcy
proceedings (to the actual knowledge of the Servicer), (v) in
foreclosure and (vi) as to which the related Mortgaged Property is REO
Property;
(r) the Certificate Principal Balance of each Class of
Certificates then outstanding after giving effect to all payments or
principal on such Distribution Date; and
(s) such other information as the Certificate Insurer may
reasonably request to the extent such information is available to the
Trustee from the Servicer and is produced by the Servicer in the
ordinary course of the Servicer's business.
In the case of information furnished pursuant to subclauses (a), (b),
(c) and (d) above, the amounts shall be expressed as a dollar amount per
Certificate with a $1,000 principal denomination.
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Within 90 days after the end of each calendar year, the Trustee shall
mail such report to Greenwich Capital Markets, Inc., 000 Xxxxxxxxx Xxxx,
Xxxxxxxxx Xxxxxxxxxxx 00000, Attention: Mortgage Finance (which report shall
include, in addition to the information contained in reports to others
hereunder, the total amount of interest on the Mortgage Loans for the period
covered by such report), and to each Person who at any time during the calendar
year was an Offered Certificateholder, a statement for each Certificateholder
containing the information set forth in subclauses (a) through (c) above,
aggregated for such calendar year or, in the case of each Person who was an
Offered Certificateholder for a portion of such calendar year, setting forth
such information for each month thereof for the portion of the year during which
such Person was a Certificateholder. The Servicer shall provide any other
information necessary in order to report income in respect of the
Certificateholders for federal income tax purposes.
Section 5.04 The Certificate Insurer; Use of Information. The Company
and the Trustee on behalf of Certificateholders and the Trust (the "Trust
Parties") hereby authorize the Certificate Insurer to include the information
contained in reports provided to the Certificate Insurer hereunder (the
"Information") on Bloomberg, or in other electronic or print information
services. The Trust Parties agree not to commence any actions or proceedings, or
otherwise assert any claims, against the Certificate Insurer or its Affiliates
or any of the Certificate Insurer or the Certificate Insurer Parties, arising
out of, or related to or in connection with the dissemination and/or use of any
information by the Certificate Insurer as contemplated in this Section 5.04,
including, but not limited to, claims based on allegations of inaccurate,
incomplete or erroneous transfer of information by the Certificate Insurer to
Bloomberg or otherwise (other than in connection with the Certificate Insurer's
gross negligence or willful misconduct). The Trust Parties waive their rights to
assert any such claims against the Certificate Insurer Parties and fully and
finally release the Certificate Insurer Parties from any and all such claims,
demands, obligations, actions and liabilities (other than in connection with the
Certificate Insurer's gross negligence or willful misconduct). The Certificate
Insurer makes no representations or warranties, expressed or implied, of any
kind whatsoever with respect to the accuracy, adequacy, timeliness,
completeness, merchantability or fitness for any particular purpose of any
Information in any form or manner. The Certificate Insurer reserves the right at
any time to withdraw or suspend the dissemination of the Information by the
Certificate Insurer. The authorizations, covenants and obligations of the Trust
Parties under this section shall be irrevocable and shall survive the
termination of this Agreement.
ARTICLE VI
THE CERTIFICATES
Section 6.01 The Certificates.
(a) The Certificates shall be substantially in the forms set forth in
Exhibits X-0, X-0, X-0, X-0, X-0 and B-3 hereto, and shall, on original issue,
be executed and delivered by the Trustee on behalf of the Trust, not
individually but solely as Trustee to or upon the order of the Seller
concurrently with the sale and assignment to the Trustee of the Trust.
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(b) The Book-Entry Certificates will be evidenced by one or more
certificates, beneficial ownership of which will be held in minimum dollar
denominations of $1,000 and integral multiples of $1 in excess thereof. The
Class P Certificates, the Class R-I Certificate and the Class R-II Certificate
shall be issuable solely as single certificates evidencing the entire Percentage
Interests of the Class P Certificates, the Class R-I Certificates and the Class
R-II Certificates, respectively, and the Class C Certificates shall be initially
issued as two certificates evidencing a Percentage Interest thereof of 98.72%
and 1.28%, respectively.
(c) The Certificates shall be executed by manual or facsimile signature
by the Trustee on behalf of the Trust (not in its individual capacity but solely
as Trustee) by an authorized officer of the Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trust, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersigning and delivery of such Certificates
or did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless such Certificate shall have been manually authenticated by the
Trustee substantially in the form provided for herein, and such signature upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. The textual
supplement entitled "Statement of Insurance" supplied to the Sponsor by the
Certificate Insurer shall be attached to each Offered Certificate.
Section 6.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee maintained for such purpose pursuant to the
foregoing paragraph and upon satisfaction of the conditions set forth in Section
6.02(b) and (c), the Trustee shall execute, authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class and of a like aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of the same Class and of a
like aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates that the Certificateholder making the exchange is entitled to
receive.
Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Company or the Trustee) be duly endorsed by, or be
accompanied by a written instrument of
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transfer in form satisfactory to the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made to a Certificateholder for any transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of certificates.
All Certificates surrendered for transfer or exchange shall be canceled
by the Trustee in accordance with its standard procedures.
(b) No transfer of a Class R Certificate shall be made unless, as
evidenced by an Opinion of Counsel and Transfer Affidavit delivered to the
Trustee, each in form and substance satisfactory to the Trustee, such transfer
is not subject to registration under the Securities Act or any applicable state
securities laws. Any such Opinion of Counsel and Transfer Affidavit shall not be
obtained at the expense of the Trustee, the Trust, the Seller or the Servicer.
The Holder of a Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Certificate Insurer, the Seller
and the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with the Securities Act and such state laws.
Neither the Seller, the Servicer nor the Trustee or the Trust is under an
obligation to register the Class R Certificates under the Securities Act or any
state securities law.
The Class R Certificates, this Agreement and related documents may be
amended or supplemented from time to time to modify restrictions on and
procedures for resale and other transfer of such Class R Certificate to reflect
any change in applicable law or regulation (or the interpretation thereof) or
practices relating to the resale or transfers of restricted securities
generally.
No legal or beneficial interest in all or any of the Class R
Certificates may be transferred directly or indirectly to: (i) a Disqualified
Organization or an agent of a Disqualified Organization (including a broker,
nominee or middleman), (ii) to an entity that holds REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (a
"Book-Entry Nominee"), (iii) an individual, corporation, partnership or other
Person unless such transferee (A) is not a Foreign Person or (B) is a Foreign
Person that will hold such Class R Certificate in connection with the conduct of
a trade or business within the United States and has furnished the transferor
and the Trustee with, and agrees to periodically furnish in accordance with
Treasury regulations, an effective Internal Revenue Service Form 4224 (or any
applicable successor form) or (C) is a Foreign Person that has delivered (at the
expense of the transferee) to both the transferor and the Trustee an opinion of
a nationally recognized tax counsel to the effect that the transfer of the Class
R Certificate to it is in accordance with the requirements of the Code and the
regulations promulgated thereunder and that such transfer of the Class R
Certificate will not be disregarded for federal income tax purposes (any such
Person who is not covered by clause (A), (B) or (C) above being referred to
herein as a "Non-permitted Foreign Holder") or (iv) to an ERISA Plan or an
entity, including an insurance company separate account or general account,
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whose underlying assets include ERISA Plan assets by reason of an ERISA Plan's
investment in the entity or a Person investing the assets of an ERISA Plan or
such an entity, whether as nominee, trustee, agent or otherwise (such plan,
entity or Person, an "ERISA Prohibited Holder"), and any such purported transfer
shall be void and have no effect.
The Trustee shall not execute, and shall not authenticate and deliver,
a new Class R Certificate in connection with any registration of transfer to a
Person known to a Responsible Officer of the Trustee to be a Disqualified
Organization or agent thereof (including a broker, nominee or middleman), to a
Book-Entry Nominee, a Non-permitted Foreign Holder or an ERISA Prohibited
Holder, and the Trustee shall not accept a surrender for the registration of
transfer or register the transfer of, any Class R Certificate, unless the
transferor shall have provided to the Trustee a Transfer Affidavit substantially
in the form attached as Exhibit G hereto, signed by the transferee, to the
effect that the transferee is not a Disqualified Organization and is not a
nominee for a beneficial owner of the Class R Certificate from which the
transferee has not received a substantially similar affidavit, a Book-Entry
Nominee, a Non-permitted Foreign Holder or an ERISA Prohibited Holder. Such
Transfer Affidavit shall contain (i) the consent of the transferee to any such
amendments of this Agreement as may be required to further effectuate the
foregoing restrictions on transfer of the Class R Certificates to Disqualified
Organizations, Book-Entry Nominees, Non-permitted Foreign Holders or ERISA
Prohibited Holders and (ii) a representation from the transferee that such
transferee does not have the intent or purpose to impede the assessment or
collection of any federal, state or local income taxes legally required to be
paid with respect to the Class R Certificates. Such Transfer Affidavit, if not
executed in connection with the initial issuance of the Class R Certificates,
also shall be accompanied by a Transferor Affidavit, substantially in the form
attached hereto as Exhibit K, signed by the transferor to the effect that as of
the time of the transfer, the transferor has no actual knowledge that such
affidavit is false and that the transferor does not have the intent or purpose
to impede the assessment or collection of any federal, state or local income
taxes legally required to be paid with respect to the Class R Certificate.
Each Class R Certificate shall bear a legend referring to the foregoing
restrictions. Any Person acquiring the Class R Certificate, or beneficial
ownership thereof, agrees to give the Servicer written notice that it is a
"pass-through interest holder" within the meaning of Treasury Regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring the Class R Certificate, or
beneficial ownership thereof, if it is, or is acquiring the Class R Certificate
on behalf of, a "pass-through interest holder."
Upon notice to the Servicer that any legal or beneficial interest in
any Class R Certificate has been transferred, directly or indirectly, to a
Disqualified Organization in contravention of the foregoing restrictions or to a
pass-through entity as defined in the REMIC Provisions an interest of which is
held by a Disqualified Organization, the Servicer agrees to furnish to the
Internal Revenue Service and to any transferor of the Class R Certificate or
such agent or such pass-through entity such information as may be required to be
delivered thereto by the Code as necessary to the application of Code Section
860E(e) and described in Treasury regulations ss.1.860D-1(b)(5)(ii), or any
successor provision, including, but not limited to, the present value of the
total anticipated excess inclusions with respect to the Class R Certificate (or
portion thereof)
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for periods after such transfer. Such information shall be provided in the
manner described in Treasury regulations ss.1.860E-2(a)(5), or any successor
provision. At the election of the Servicer, the cost to the Servicer of
computing and furnishing such information may be charged to the transferor or
such agent referred to above; provided, however, that the Servicer shall in no
event be excused from furnishing such information.
The Class R Certificates, this Agreement and related documents may be
amended or supplemented from time to time to modify restrictions on and
procedures for resale and other transfer of the Class R Certificates to reflect
any change in applicable law or regulation (or the interpretation thereof) or
practices relating to the resale or transfer of restricted securities generally.
(c) No transfer of a Class C Certificate, Class P Certificate or
beneficial interest therein shall be made unless the Trustee shall have received
(i) a letter from the transferor, substantially in the form attached hereto as
Exhibit M, and (ii) a representation letter from the transferee, substantially
in the form attached hereto as either Exhibit N-1 or Exhibit N-2, as applicable:
Notwithstanding anything else to the contrary herein, any purported
transfer of a Class C Certificate, or a Class P Certificate or a beneficial
interest therein to or on behalf of an employee benefit plan subject to ERISA or
to the Code or a person acting on behalf of an ERISA Plan or using the assets of
an ERISA Plan to effect such transfer other than an insurance company purchasing
with funds from a general account not exempt pursuant to Prohibited Transaction
Class 95-60 shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any Class C Certificate or any Class P
Certificate that is in fact not permitted by Section 6.02(c) or for making any
payments due on such Certificate to the holder thereof or taking any other
action with respect to such holder under the provisions of this Agreement so
long as the transfer was registered by the Trustee in accordance with the
foregoing requirements.
The Class C Certificates, the Class P Certificates, this Agreement and
related documents may be amended or supplemented from time to time to modify
restrictions on and procedures for resale and other transfer of such Class C
Certificates or a Class P Certificate to reflect any change in applicable law or
regulation (or the interpretation thereof) or practices relating to the resale
or transfers of restricted securities generally.
(d) The Book-Entry Certificates shall, subject to Section 6.02(e), at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration thereof may not be transferred by the Trustee except
to another Depository; (ii) the Depository shall maintain book-entry records
with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
the Certificates issued in book-entry form on the books of the Depository shall
be governed by applicable rules established by the Depository and the rights of
Certificate Owners with respect to Book-Entry
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Certificates shall be governed by applicable law and agreements between such
Certificate Owners and the Depository, Depository Participants, and indirect
participating firms; (iv) the Depository may collect its usual and customary
fees, charges and expenses from its Depository Participants; (v) the Trustee
shall deal with the Depository as the authorized representative of the
Certificate Owners of the Book-Entry Certificates for all purposes including the
making of payments due on the Book-Entry Certificates and exercising the rights
of Holders of Book-Entry Certificates under this Agreement; (vi) the Trustee may
rely and shall be fully protected in relying upon information furnished by the
Depository; (vii) Certificate Owners shall not be entitled to certificates for
the Book-Entry Certificates and (viii) the Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
holders of Book-Entry Certificates and give notice to the Depository of such
record date.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
(e) If (x)(i) the Company or the Depository advises the Trustee in
writing that the Depository is no longer willing, qualified or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Company is unable to locate a qualified successor, (y) the Company at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository or (z) after the occurrence of an Event of Default,
Certificate Owners representing not less than 51% of the aggregate Certificate
Principal Balance of the Book-Entry Certificates together advise the Trustee and
the Depository in writing that the continuation of a book-entry system through
the Depository is no longer in the best interests of the Certificate Owners, the
Trustee shall notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of definitive, fully
registered Certificates ("Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of such Certificates by the
Depository, accompanied by registration instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates and the
expense of any such issuance shall be reimbursed by the Trust pursuant to
Section 9.05 and shall notify the Certificate Insurer of such event. Neither the
Company nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed applicable with respect to such Definitive Certificates and the
Certificates as Certificateholders hereunder.
(f) On or prior to the Closing Date, there shall be delivered to the
Trustee (as agent for the Depository) one certificate for each Class of
Book-Entry Certificates registered in the name of the Depository's nominee, Cede
& Co. The face amount of each such Certificate shall be equal to the Principal
Balance thereof. Each Certificate issued in book-entry form shall bear the
following legend:
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"Unless this Certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
Section 6.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Trustee or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee, the Servicer, the Seller
and the Certificate Insurer such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like Class and Percentage Interest. Upon the issuance of any new Certificate
under this Section, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute complete and indefeasible evidence of ownership of the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 6.04 Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Servicer, the Seller, the Trustee,
the Certificate Insurer and any of their respective agents may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.01 and for all
other purposes whatsoever, and neither the Servicer, the Seller, the Trustee,
the Certificate Insurer nor any of their respective agents shall be affected by
notice to the contrary.
Section 6.05 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
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 except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and the Certificate Insurer and, when required, to
the Seller or the Servicer. 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, the Seller, the Servicer and
the Certificate Insurer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner that the
Trustee deems sufficient.
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(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be done,
by the Trustee, the Seller or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE VII
THE SERVICER AND THE SELLER
Section 7.01 Liability of the Seller and the Servicer. The Seller and
the Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Seller and the
Servicer herein.
Section 7.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. Any corporation or other entity (i) into which the
Seller or the Servicer may be merged or consolidated, (ii) that may result from
any merger, conversion or consolidation to which the Seller or the Servicer
shall be a party, or (iii) that may succeed to all or substantially all of the
business of the Seller or the Servicer, which corporation or other entity shall,
in any case where an assumption shall not be effected by operation of law,
execute an agreement of assumption to perform every obligation of the Servicer
under this Agreement, shall be the successor to the Seller or the Servicer, as
the case may be, under this Agreement without the execution or filing of any
document or any further act by any of the parties to this Agreement; except that
if the Servicer is not the surviving entity, then the surviving entity shall
execute and deliver to the Trustee an agreement of assumption to perform every
obligation of the Servicer hereunder.
Section 7.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of its directors, officers, employees or agents
shall be under any liability to the Trustee, the Trust or the Certificateholders
for any action taken or for refraining from the taking of any action by the
Servicer pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer or any such person
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of the duties of the
Servicer or by reason of reckless disregard of the obligations and duties of the
Servicer hereunder. The Servicer and any director, officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement, and that in its
opinion may involve it in any expense or liability.
Section 7.04 Servicer Not to Resign. Subject to the provisions of
Section 7.02 regarding the merger or consolidation of the Servicer into or with
another entity, the Servicer shall not resign from the obligations and duties
hereby imposed on it except upon determination that the performance of its
duties or obligations hereunder is no longer permissible under applicable law or
regulation or are in material conflict by reason of applicable law or regulation
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with any other activities carried on by it at the date of this Agreement. Any
such determination permitting the resignation of the Servicer pursuant to this
Section shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee and the Certificate Insurer. No resignation pursuant to this Section
7.04 (a) shall become effective until the Trustee or a successor servicer shall
have assumed the responsibilities and obligations of the Servicer in accordance
with Section 8.02 or (b) shall relieve the Servicer of responsibility for any
obligations pursuant to this Agreement that specifically survive the resignation
or termination of the Servicer. Each of the Rating Agencies shall be given
written notice of a resignation of the Servicer pursuant to this Section.
If, at the time the Servicer is removed or resigned and the Trustee
does not appoint a different successor servicer, then the Trustee shall become
the successor servicer.
Upon the termination or resignation of the Servicer, the Servicer also
shall promptly (and in any event no later than 10 Business Days subsequent to
such termination or resignation) deliver or cause to be delivered to the Trustee
or successor servicer all the books and records (including, without limitation,
records kept in electronic form) that the Servicer has maintained for the
Mortgage Loans, including all tax bills, assessment notices, insurance premium
notices and all other documents as well as all original documents then in the
Servicer's possession. The Servicer may retain copies of any such books and
records.
Any collections received by the Servicer after termination or
resignation shall be endorsed by it and remitted directly and immediately to the
Trustee or the successor servicer. The Servicer shall be entitled to receive the
Monthly Servicing Fee through the day on which it is terminated as Servicer
(which may be pro rated for a partial month).
To the extent that the Servicer, at the time of its termination or
resignation, has therefore expended any amounts as Monthly Advances or Servicing
Advances with respect to any Mortgage Loan, which Monthly Advances or Servicing
Advances remain unreimbursed as of such date ("Unrecovered Advances") the
Servicer shall thereafter be entitled to receive from the successor servicer,
monthly, such information as may be generated by the successor servicer as may
be reasonably necessary to enable the Servicer to monitor the recovery of, and
collection efforts undertaken with respect to, the Unrecovered Advances, which
information will include details of collection activities, payment records and
trial balances. To the extent that the successor servicer receives any amounts
that relate to reimbursement for Unrecovered Advances made by the prior
Servicer, such amounts shall be remitted to the prior Servicer on the related
Distribution Date. To the extent that the Servicer, based upon the information
supplied by the successor servicer, believes that any discrepancies exist
between actual Unrecovered Advances received by the successor servicer and the
amounts forwarded to the Servicer as recovered Unrecovered Advances, the
Servicer and the successor servicer shall attempt in good faith to reconcile
such discrepancies.
The Servicer agrees to cooperate reasonably with the successor servicer
in effecting the termination of the Servicer's servicing responsibilities and
rights hereunder and shall promptly provide to the successor servicer all
documents and records reasonably requested by it to enable
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it to assume the Servicer's functions hereunder and shall promptly also transfer
to the successor servicer all amounts that then have been or should have been
deposited in the Collection Account, or that are thereafter received with
respect to the Mortgage Loans. The successor servicer shall not be held liable
by reason of any failure to make, or any delay in making, any distribution
hereunder or any portion thereof caused by (i) the failure of the Servicer to
deliver, or any delay in delivering, cash, documents or records to it, or (ii)
restrictions imposed by any regulatory authority having jurisdiction over the
Servicer.
The Servicer which is being terminated or is resigning shall give
notice to the Mortgagors of the transfer of the servicing to the successor
servicer. Said notice shall be a joint notice of servicing transfer in the form
required by applicable law.
Section 7.05 Merger or Consolidation of the Seller. Any corporation or
other entity (i) into which the Seller may be merged or consolidated, (ii) that
may result from any merger, conversion or consolidation to which the Seller
shall be a party, or (iii) that may succeed to all or substantially all of the
business of the Seller, which corporation or other entity shall, in any case
where an assumption shall not be effected by operation of law, execute an
agreement of assumption to perform every obligation of the Seller under this
Agreement, shall be the successor to the Seller hereunder without the execution
or filing of any document or any further act by any of the parties to this
Agreement, except that if the Seller in any of the foregoing cases is not the
surviving entity, then the surviving entity shall execute and deliver to the
Trustee an agreement of assumption to perform every obligation of the Seller
hereunder.
ARTICLE VIII
DEFAULT
Section 8.01 Events of Default. If any one of the following events
(each an "Event of Default") shall occur and be continuing:
(a) Any failure by the Servicer to (i) make a required Monthly
Advance on any Deposit Date or (ii) deposit in the Collection Account
or the Certificate Account any other amount required to be deposited
therein under this Agreement or failure to pay the Trustee Fee, which,
in the case of a failure to make a required deposit to the Collection
Account, continues unremedied for a period of five Business Days after
the date upon which written notice of such failure shall have been
given to the Servicer by the Trustee or the Certificate Insurer or to
the Servicer, the Certificate Insurer and the Trustee by Holders of
Certificates evidencing Voting Interests represented by all
Certificates aggregating not less than 51%;
(b) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of
the Servicer set forth in the Certificates or in this Agreement, which
failure (i) materially and adversely affects the Certificateholders or
the Certificate Insurer and (ii) continues unremedied for a period of
30 days after the date on which written notice of such failure (which
notice shall refer specifically to this Section), requiring the same to
be remedied, shall have been given to
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the Servicer by the Trustee or the Certificate Insurer, or to the
Servicer, the Certificate Insurer and the Trustee by the Holders of
Certificates evidencing Voting Interests represented by all
Certificates aggregating not less than 51%;
(c) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days;
(d) The consent by the Servicer to the appointment of a
trustee, conservator or receiver or liquidator in any bankruptcy,
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings of or relating to the Servicer or of or relating
to substantially all of its property; or the Servicer shall admit in
writing its inability to pay its debts generally as they become due,
file a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations;
(e) The payment by the Certificate Insurer of any Insured
Payment;
(f) For so long as the Company is the Servicer, failure on the
part of the Seller duly to observe or perform in any material respect
any covenants or agreements of the Seller set forth in the Certificates
or in this Agreement, which failure (i) materially and adversely
affects the Certificateholders or the Certificate Insurer and (ii)
continues unremedied for a period of 30 days after the date on which
written notice of such failure (which notice shall refer specifically
to this Section), requiring the same to be remedied, shall have been
given to the Servicer by the Trustee or the Certificate Insurer, or to
the Servicer, the Certificate Insurer and the Trustee by the Holders of
Certificates evidencing Voting Interests represented by all
Certificates aggregating not less than 51%;
(g) The occurrence of a material default of the Servicer under
this Agreement or the occurrence of a Servicer Rolling Delinquency
Event, a Servicer Cumulative Loss Event or a Servicer Rolling Loss
Event; or
(h) The occurrence of any merger or consolidation of the
Servicer described in Section 7.02 following which the Servicer does
not have a net worth of at least $10,000,000 determined in accordance
with generally accepted accounting principles, unless the Certificate
Insurer consents in writing thereto.
then, and in each and every such case, so long as such Event of Default shall
not have been remedied by the Servicer, either (1) the Certificate Insurer or
(2) with the prior written consent of the Certificate Insurer, either the
Trustee or the Holders of Certificates evidencing Voting Interests represented
by all Certificates aggregating not less than 51%, by notice then given in
writing to the Servicer with a copy to the Certificate Insurer, the Seller and
to the Trustee, may
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terminate all of the rights, responsibilities and obligations of the Servicer as
Servicer under this Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Certificates or the Mortgage Loans or otherwise,
shall pass to and be vested in the successor servicer pursuant to and under this
Section and Section 7.04 and, without limitation, the successor servicer is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Mortgage Loans and related
documents, or otherwise. The Servicer agrees to cooperate with the successor
servicer in effecting the termination of its responsibilities and rights as
Servicer hereunder, including, without limitation, the transfer to the successor
servicer for the administration by it of all cash amounts that shall at the time
be held by the Servicer that have been deposited by the Servicer in the
Collection Account or the Certificate Account or thereafter received by the
Servicer with respect to the Mortgage Loans.
All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Mortgage Files to the successor servicer,
amending this Agreement to reflect the appointment of a successor as Servicer
pursuant to this Section 8.01 and Section 7.04 or otherwise in connection with
the assumption by the successor servicer of the duties of the predecessor
servicer hereunder shall be paid by the predecessor servicer upon presentation
of reasonable documentation of such costs and expenses.
Section 8.01A Retention and Termination of Servicer. The Servicer
hereby covenants and agrees to act as such under this Agreement for an initial
term, commencing on the Closing Date and ending on December 31, 2000, which term
shall be extendible by the Certificate Insurer in its sole discretion (provided
that no Certificate Insurer Default has occurred and is continuing) for
successive terms of three calendar months each (or, pursuant to revocable
written standing instructions from time to time to the Servicer and the Trustee
for any specific number of terms greater than three), until the Certificates are
paid in full. Each such notice (including each notice pursuant to standing
instructions, which shall be deemed delivered at the end of successive quarterly
terms for so long as such instructions are in effect) (a "Servicing Extension
Notice") shall be delivered by the Certificate Insurer to the Trustee and the
Servicer. The Servicer hereby agrees that, as of the date hereof and upon its
receipt of any such Servicer Extension Notice, the Servicer shall become bound,
for the initial term beginning on the Closing Date and for the duration of the
term covered by such Servicer Extension Notice, to continue as the Servicer
subject to and in accordance with the other provisions of this Agreement. Until
such time as a Certificate Insurer Default shall have occurred and be
continuing, the Trustee agrees that if as of the fifteenth day prior to the last
day of any term of the Servicer the Trustee shall not have received any Servicer
Extension Notice from the Certificate Insurer, the Trustee will, within five
days after, give written notice of such non-receipt to the Certificate Insurer
and Servicer and the Servicer's term shall not be extended unless a Servicer
Extension Notice is received on or before the last day of such term.
Notwithstanding the foregoing, in the event a Certificate Insurer Default has
occurred and is continuing, the Servicer Extension Notice shall be deemed to
have been delivered as of last day of the current term of the Servicer and
extended until the next quarterly period.
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With respect to the initial term, the Seller shall act as Sub-Servicer
on behalf of the Servicer under this Agreement for a period commencing on the
Closing Date and ending on the date that the servicing is transferred by the
Seller to the Servicer. Any failure to effect such transfer of servicing on or
prior to December 1, 2000 shall constitute an "Event of Default" under this
Agreement.
Section 8.02. Trustee to Act; Appointment of Successor. (a) On and
after the time the Servicer receives a notice of termination pursuant to Section
8.01 or if a Servicer Extension Notice has not been delivered, the Trustee,
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof,
including without limitation, the obligation to make Monthly Advances and to pay
Compensating Interest. As compensation therefor, the Trustee shall be entitled
to such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination had been given. Notwithstanding the foregoing, unless
the Certificate Insurer previously shall have appointed a successor servicer, if
the Trustee shall be unwilling so to act, or the Trustee is legally unable so to
act, the Trustee with the consent of the Certificate Insurer and the Rating
Agencies may promptly appoint, or petition a court of competent jurisdiction to
appoint any established housing and home finance institution or any institution
that regularly services home equity loans that is then servicing a home equity
loan portfolio and having all licenses, permits and approvals required by
applicable law, and having a net worth of not less than $10,000,000 as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder; provided that
any such successor servicer shall be acceptable to the Certificate Insurer and
the Rating Agencies, which acceptance shall not be unreasonably withheld; and
provided further that the appointment of any such successor servicer will not
result in the qualification, reduction or withdrawal of the rating assigned to
any subclass of Offered Certificates by any Rating Agency. Pending appointment
of a successor to the Servicer hereunder, unless the Trustee is prohibited by
law from so acting, the Trustee shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided, however, that no
such compensation shall be in excess of that permitted the Servicer hereunder.
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The
appointment of a successor servicer shall not affect any liability of the
predecessor Servicer that may have arisen under this Agreement prior to its
termination as Servicer (including without limitation, any amount for a
deductible amount pursuant to the last sentence of Section 3.04), nor shall any
successor servicer be liable for any acts or omissions of the predecessor
Servicer or for any breach by such Servicer or the Seller of any of its
representations or warranties contained herein or in any related document or
agreement. Each of the Rating Agencies shall be given written notice of the
appointment of a successor servicer pursuant to this Section.
(b) The Trustee, shall be reimbursed for Transition Costs, if any,
incurred in connection with the assumption of responsibilities of the successor
servicer, upon receipt of
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documentation of such costs and expenses. The Trustee shall have no claim
against the Servicer, the Trustee, the Certificate Insurer, any
Certificateholder, the Trust or any other party to this Agreement for any costs
and expenses incurred in effecting such succession in excess of the amount
specified in the definition of "Transition Costs."
Section 8.03 Notifications to Certificateholders. Upon any termination
or appointment of a successor to the Servicer pursuant to this Article Eight,
the Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses appearing in the Certificate Register, the
Certificate Insurer, the PMI Insurer and to each Rating Agency.
Within 60 days of obtaining actual knowledge of the occurrence of any
Event of Default that remains uncured, the Trustee shall transmit by mail to all
Certificateholders notice of such Event of Default.
Section 8.04 Assumption or Termination of Sub-Servicing Agreements by
the Trustee or any Successor Servicer. Upon the termination of the Servicer as
servicer under this Agreement, the Trustee as successor to the Servicer
hereunder or any other successor to the Servicer hereunder may, subject to the
terms of any Sub-Servicing Agreement, in its sole and absolute discretion elect
to assume or terminate any Sub-Servicing Agreement then in force and effect
between the Servicer and the Sub-Servicer. Notwithstanding the foregoing, any
termination fee due to a Sub-Servicer because of its termination by the Trustee
hereunder shall be the responsibility of the terminated Servicer and not the
Trustee. Upon the assumption of any Sub-Servicing Agreement, the Servicer agrees
to deliver to the assuming party any and all documents and records relating to
the applicable Sub-Servicing Agreement and an accounting of amounts collected
and held by it and otherwise use its best reasonable efforts to effectuate the
orderly transfer of the Sub-Servicing Agreement.
Section 8.05 Reserved.
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of the Trustee. The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If an Event of Default of which
a Responsible Officer of the Trustee shall have actual knowledge shall have
occurred (which has not been cured) and subject to the provisions of Section
9.13, the Trustee shall exercise such of the rights and powers vested in it by
this Agreement, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; except that:
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(a) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates,
filings or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(b) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(c) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Holders of Certificates
evidencing Voting Interests represented by all Certificates (or all
affected Certificates, as appropriate) aggregating not less than 51%
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement provided that such
action has been approved by the Certificate Insurer; and
(d) the Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in clauses (a) and (b) of Section 8.01 unless a Responsible
Officer obtains actual knowledge of such failure or the Trustee
receives written notice of such failure from the Servicer, the Holders
of Certificates evidencing Voting Interests represented by all
Certificates aggregating not less than 51% or the Certificate Insurer,
as the case may be; and
(e) the Trustee shall not be required to expend or risk its
own funds or otherwise incur financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in
this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of
the Servicer under this Agreement, except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
Section 9.02 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 9.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
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appraisal, bond or other paper or document reasonably believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) The Trustee may consult with counsel selected by it with
due care and any advice obtained from such counsel or Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(c) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of the Certificate Insurer
or any of the Certificateholders, pursuant to the provisions of this
Agreement, unless the Person so requesting, ordering or directing same
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred
therein or thereby; the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed
as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act;
nothing contained herein shall, however, relieve the Trustee of the
obligations, upon the occurrence of an Event of Default known to a
Responsible Officer of the Trustee (which has not been cured), to
exercise such of the rights and powers vested in it by this Agreement,
subject to the provisions of Section 9.13, and to use the same degree
of care and skill in their exercise as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs;
(d) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith in accordance with the
direction of the Certificate Insurer or of Holders of Certificates
evidencing Voting Interests representing all Certificates (or all
affected Certificates, as appropriate) aggregating not less than 51%,
with the consent of the Certificate Insurer;
(e) Prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper
or documents, unless requested in writing to do so by the Certificate
Insurer or by Holders of Certificates evidencing Voting Interests
represented by all Certificates (or all affected Certificates, as
appropriate) aggregating not less than 51%, with the consent of the
Certificate Insurer; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such cost, expense or
liability as a condition to such proceeding; the reasonable expense of
every such examination shall be paid by the Servicer or, if paid by the
Trustee, shall be reimbursed by the Servicer upon demand; and
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nothing in this clause (e) shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors; and
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian. Any appointment of a
Custodian hereunder shall require the prior written consent of the
Certificate Insurer. The Trustee shall not be liable or responsible for
the misconduct of the custodian of the Mortgage Files appointed with
due care by the Trustee hereunder with the prior written consent of the
Certificate Insurer.
Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans. The
recitals contained herein and in the Certificates (other than the signature and
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Servicer, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates and the
signature of the Trustee on this Agreement) or of any Mortgage, Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the 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
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Collection Account by the Servicer.
Section 9.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not Trustee.
Section 9.05 Payment of the Trustee's Fees and Expenses.
(a) On each Distribution Date, the Trust shall pay to the Trustee an
amount equal to the Trustee Fee described in the definition thereof (including
any fees and expenses of a co-trustee or separate trustee appointed under
Section 9.10) as compensation for all services rendered by the Trustee (and any
such co-trustee or separate trustee) in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee (and any such co-trustee or separate trustee).
(b) The Trust shall pay or reimburse the Trustee the Trustee Fee
pursuant to Section 5.01 and such other reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith or that is otherwise reimbursable to the Trustee by
the Servicer pursuant to Section 9.05(a) above; provided, however, that the
Trustee shall not refuse to perform any of its duties hereunder solely as a
result of the failure of the Trust to pay or reimburse such expenses,
disbursements or advances.
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(c) The Servicer agrees to indemnify the Trustee from, and hold it
harmless against, any and all losses and liabilities, damages, claims or
expenses (including reasonable attorneys' fees) arising in respect of its acts
or omissions in connection with this Agreement or the Certificates except to the
extent the negligence, bad faith or intentional misconduct of the Trustee
contributes to the loss, liability, damage, claim or expense.
(d) This Section 9.05 shall survive the termination of this Agreement
or the resignation or removal of the Trustee as regards rights accrued prior to
such resignation or removal.
Section 9.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a bank or other depository institution doing
business under the laws of the United States or any state thereof, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $100,000,000 and subject to supervision or examination
by federal or state authority and rated at least BBB by Standard & Poor's, and
Baa2 by Moody's and, if rated by Fitch, BBB by Fitch. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.07. Any successor to the Trustee must be reasonably acceptable to the
Certificate Insurer.
Section 9.07 Resignation or Removal of the Trustee. The Trustee may at
any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Servicer, the Certificate Insurer and each Rating
Agency. Upon receiving such notice of resignation, the Servicer shall promptly
appoint a successor trustee satisfying the criteria set forth in Section 9.06
(approved by the Certificate Insurer, which approval shall not be unreasonably
withheld) by written instrument, copies of which shall be delivered to the
resigning Trustee, the successor trustee, the Servicer and the Certificate
Insurer. If no successor trustee shall have been so appointed and having
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 and shall fail to resign after written
request therefor by the Servicer or the Certificate Insurer, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or the Trustee shall fail to perform its obligations under this
Agreement, then the Servicer, the Seller or the Certificate Insurer shall remove
the Trustee and appoint a successor trustee satisfying the criteria set forth in
Section 9.06 (approved by the Certificate Insurer, which approval shall not be
unreasonably withheld) by
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written instrument, in triplicate, one copy of which instrument shall be
delivered to the Trustee so removed, one copy to the successor trustee and one
copy to the Certificate Insurer.
If at any time the Trustee shall fail to duly observe or perform in any
material respect any covenants or agreements of the Trustee set forth in Section
9.01 of this Agreement, which failure (i) materially and adversely affects the
Certificateholders or the Certificate Insurer and (ii) continues unremedied for
a period of 10 days after the date on which written notice of such failure
(which notice shall refer specifically to this Section), requiring the same to
be remedied, shall have been given to the Trustee, the Seller and the Servicer
by the Certificate Insurer, or to the Trustee, the Certificate Insurer, the
Seller and the Servicer by the Holders of Certificates evidencing Voting
Interests represented by all Certificates aggregating not less than 51%, then
the Servicer, the Seller or the Certificate Insurer may remove the Trustee and
appoint a successor trustee satisfying the criteria set forth in Section 9.06
(approved by the Certificate Insurer, which approval shall not be unreasonably
withheld) by written instrument, in triplicate, one copy of which instrument
shall be delivered to Trustee so removed, one copy to the successor trustee and
one copy to the Certificate Insurer.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 9.08. The provisions of Section 9.05 shall survive any such
resignation or removal.
Section 9.08 Successor Trustee. Any successor trustee appointed as
provided in Section 9.07 shall execute, acknowledge and deliver to the Servicer
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Trustee. The Seller, the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance it shall be eligible under the
provisions of Section 9.06.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Servicer shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register, to each Rating Agency and to the Certificate Insurer. If
the Servicer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Servicer.
Section 9.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or
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any corporation succeeding to the business of the Trustee or substantially all
of the Trustee's trust business, shall be the successor of the Trustee
hereunder, provided such corporation shall be eligible under the provisions of
Section 9.06, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 9.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property may at the time be located, the Servicer
and the Trustee acting jointly, with the prior written 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, and to vest in such Person
or Persons, in such capacity and for the benefit of the Certificateholders, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights, indemnities and trusts
as the Servicer and the Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone and with the prior consent of
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 9.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 9.08. Each of the Rating Agencies shall be given
written notice of the appointment of a co-trustee or a separate trustee pursuant
to this Section.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(c) The Servicer and the Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee, except that following the
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occurrence of an Event of Default that has not been cured, the Trustee,
acting alone may accept the resignation of or remove any separate or
co-trustor.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and copies thereof given to each
of the Seller, the Servicer and the Certificate Insurer.
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.
No appointment of any separate trustee or co-trustee shall absolve the
Trustee of its duties and obligations under this Agreement.
Section 9.11 Compliance with REMIC Provisions. The Trustee shall
neither knowingly nor intentionally take any action or omit to take any action
in the performance of its duties hereunder that would cause any REMIC Pool to
fail to qualify as a REMIC or that would cause the imposition of a tax on any
REMIC Pool. The Trustee shall: (a) prepare and file, or cause to be prepared and
filed, such federal, state and local income tax and information returns or
reports using the calendar year as the taxable year for each REMIC Pool when and
as required by the REMIC Provisions and other applicable federal, state and
local income tax laws, which returns or reports shall be signed by the Trustee
or such other person as may be required thereby; (b) make an election, on behalf
of each REMIC Pool, to be treated as a REMIC and make the appropriate
designations, if applicable, in accordance with Section 9.16 on the federal
income tax return of the REMIC Pool for its first taxable year, in accordance
with the REMIC Provisions; (c) prepare and forward, or cause to be prepared and
forwarded, to the Certificateholders all information reports, or furnish or
cause to be furnished by telephone, mail, publication or other appropriate
method such information, as and when required to be provided to them in
accordance with the Code; (d) exercise reasonable care not to allow the creation
of any "interests" in any REMIC Pool within the meaning of Code Section
860D(a)(2) other than the interests represented by the Certificates (other than
the Class R-I and Class P Certificates) in the case of REMIC II and the REMIC I
Interests in the case of REMIC I; and (e) within 30 days of the Startup Day,
furnish or cause to be furnished to the Internal Revenue Service, on Form 8811
or as may otherwise be required by the Code, the name, title, address, and
telephone number of the person that Certificateholders may contact for tax
information relating to their Certificates (and the Trustee
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shall act as the representative of each REMIC Pool for this purpose), together
with such additional information as may be required by such Form, and shall
update such information at the time and in the manner required by the Code. Each
Class R Certificateholder shall designate the Servicer, if permitted by the Code
and applicable law, to act as "tax matters person" for the related REMIC Pool
within the meaning of Treasury regulations Section 1.860F-4(d), and the Servicer
is hereby designated as agent of each Class R Certificateholder for such purpose
(or if the Servicer is not so permitted, the Holder of the related Class R
Certificate shall be the tax matters person in accordance with the REMIC
Provisions).
Section 9.12 Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates (including in respect of the Certificate Insurer's rights of
subrogation) may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceedings relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders (or the Certificate Insurer in
respect of any right or interest as to which the Certificate Insurer is
subrogated) in respect of which such judgment has been recovered in accordance
with the terms of this Agreement.
Section 9.13 Exercise of Trustee Powers by Certificate Insurer and
Certificateholders. The Certificate Insurer, or the Holders of Certificates
evidencing Voting Interests represented by all Certificates aggregating not less
than 51% with the consent of the Certificate Insurer, which consent may not be
unreasonably withheld, 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 with respect to the Certificates or exercising any trust or power
conferred on the Trustee with respect to the Certificates of the Trust provided
that:
(i) such direction shall not be in conflict with any rule of
law or with this Agreement;
(ii) the Trustee shall have been provided with indemnity
satisfactory to it; and
(iii) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction; provided,
however, that the Trustee need not take any action that it reasonably
determines might involve it in liability unless it has been
satisfactorily indemnified and, with respect to actions directed by
Certificateholders and not the Certificate Insurer, may be unjustly
prejudicial to the Holders not so directing.
Section 9.14 Tax Returns. The Trustee shall maintain all information in
its possession as may be required in connection with the preparation of all
federal and, if applicable, state and local income tax and information returns
of each REMIC Pool (including, but not limited to, tax reporting under the REMIC
Provisions for each REMIC Pool) and shall prepare, execute and file as required
all such returns. The Trustee shall include in the first federal income tax
return the
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information required to be included therein under the REMIC Provisions,
including, but not limited to, Treasury regulation ss.1.860D-1(d)(2) and
Treasury regulation ss.1.860F-4(b)(2), or any successor provisions . The
Servicer shall report all required tax information to Mortgagors in accordance
with applicable law. To the extent directly applicable, the Prepayment
Assumption used in pricing the Offered Certificates will be used in preparing
any reports concerning or touching on interest payments made or original issue
discount with respect to the Certificates.
Section 9.15 Taxpayer Identification Number. The Trustee shall prepare
and file with the Internal Revenue Service, on behalf of each REMIC Pool within
the time period prescribed therefor, an application on IRS Form SS-4 for such
REMIC Pool. The Trustee, upon receipt from the Internal Revenue Service of the
Notice of Taxpayer Identification Number assigned to each REMIC Pool, shall
promptly forward a copy of such notice to the Servicer.
Section 9.16 Miscellaneous REMIC Matters.
(a) The Trustee shall elect that REMIC I and REMIC II shall be
treated as REMICs under Section 860D of the Code, as described in
Section 9.11. The REMIC I REMIC Pool and REMIC II REMIC Pool shall
constitute the assets of REMIC I and REMIC II respectively. 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 REMIC elections.
(b) REMIC I will be evidenced by (x) the Class LT-A1F, Class
LT-A2F, Class LT-A3F, Class LT-A4F, Class LT-A5F, Class LT-A6F,
(collectively, the Class LT-AF Certificates), Class LT-MF, Class
LT-AV1, Class LT-MV1, Class LT-AV2, Class LT-MV2 and Class P
Certificates (the "REMIC I Regular Interests"), which (i) (except in
the case of the Class P Certificates) will be uncertificated and
non-transferable and (ii) are hereby designated as the "regular
interests" in REMIC I and (y) the Class R-I Certificate, which is
hereby designated as the single "residual interest" in REMIC I (the
REMIC I Regular Interests, together with the Class R-I Certificate, the
"REMIC I Interests"). The REMIC I Regular Interests (other than the
Class P Certificates) shall be recorded on the records of the REMIC I
as being issued to and held by the Trustee on behalf of REMIC II.
(c) The Fixed Rate Group Certificates, Class A-V1
Certificates, Class A-V2 Certificates, and the Class C Certificates,
consisting of three components (the Class C-F Component, the Class C-V1
Component and the Class C-V2 Component (each as defined in Note 8 of
(e) below)), but exclusive of any right to receive any Supplemental
Interest Amount are hereby designated as "regular interests" with
respect to the REMIC II and the Class R-II Certificate is hereby
designated as the single "residual interest" with respect to REMIC II.
The Class R-II Certificate shall have no pass-through rate and shall
have no principal balance. On each Distribution Date, available funds,
if any, remaining in REMIC II after payments of interest and principal
on the regular interests in REMIC II will be distributed to the Class
R-II Certificates.
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(d) The Basic Principal Amount with respect to the Fixed Rate
Group shall be allocated 99.99% to the Class LT-MF Certificate and
0.01% to the Class LT-AF Certificates until paid in full. The Basic
Principal Amount with respect to Adjustable Rate Group I shall be
allocated 99.99% to the Class LT-MV1 Certificates and 0.01% to the
Class LT-AV1 Certificates until paid in full. The Basic Principal
Amount with respect to Adjustable Rate Group II shall be allocated
99.99% to the Class LT-MV2 Certificates and 0.01% to the Class LT-AV2
Certificates until paid in full. Notwithstanding the foregoing, 100% of
any portion of the Basic Principal Amount that is attributable to an
Overcollateralization Release Amount shall be allocated to the Class
LT-MF Certificates, Class LT-MV1 Certificates and Class LT-MV2
Certificates, until paid in full, to the extent it relates to the Fixed
Rate Group, Adjustable Rate Group I or Adjustable Rate Group II,
respectively.
On any Distribution Date, the Extra Principal Distribution
Amount, if any, for the Fixed Rate Group Certificates (the "Fixed Rate
Turbo Amount") will not be payable to the REMIC I Regular Interests.
Similarly, on any Distribution Date, the Extra Principal Distribution
Amount for the Adjustable Rate Group I Certificates (the "Adjustable
Rate Group I Turbo Amount") or Adjustable Rate Group II Certificates
(the "Adjustable Rate Group II Turbo Amount") will not be payable to
the REMIC I Regular Interests. Instead, a portion of the interest
payable with respect to the Class LT-MF Certificate which equals 0.01%
of the Fixed Rate Turbo Amount will be payable as a reduction of the
principal balances of each of the Class LT-AF Certificates in the same
manner as on which the Fixed Rate Turbo Amount is allocated among the
Fixed Rate Group Certificates with the same designated class number,
respectively (and will be accrued and added to principal on the Class
LT-MF Certificate), a portion of the interest payable with respect to
the Class LT-MV1 Certificate which equals 0.01% of the Adjustable Rate
I Turbo Amount will be payable as a reduction of the principal balance
of the Class LT-AV1 Certificates (and will be accrued and added to
principal on the Class LT-MV1 Certificate), and a portion of the
interest payable with respect to the Class LT-MV2 Certificate which
equals 0.01% of the Adjustable Rate II Turbo Amount will be payable as
a reduction of the principal balance of the Class LT-AV2 Certificates
(and will be accrued and added to principal on the Class LT-MV2
Certificate).
Realized Losses on the Mortgage Loans shall be applied such
that after all distributions have been made on such Distribution Date,
the principal balances of each of the Class LT-AF Certificates,
respectively equals 0.01% of the principal balance of the Fixed Rate
Group Certificates with the same designated number, respectively; the
principal balance of the Class LT-MF Certificates equals the Fixed Rate
Group Balance less an amount equal to the aggregate principal balances
of the Class LT-AF Certificates, the principal balance of the Class
LT-AV1 Certificates equals 0.01% of the principal balance of the Class
A-V1 Certificates, the principal balance of the Class LT-MV1
Certificates equals the Adjustable Rate Group I Balance less an amount
equal to the principal balance of the Class LT-AV1 Certificates, the
principal balance of the Class LT-AV2 Certificates equals 0.01% of the
principal balance of the Class A-V2 Certificates and the principal
balance of the Class LT-MV2 Certificates equals the Adjustable Rate
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Group II Balance less an amount equal to the principal balance of the
Class LT-AV2 Certificates. No Realized Losses shall be applied to the
Class P Certificates.
On each Distribution Date, available funds, if any, (other
than the Class P Deposit) remaining in the REMIC I after payments of
interest and principal with respect to the REMIC I Regular Interests
(other than the Class P Certificates) will be distributed with respect
to the Class R-I Certificate. If, at any time, the Pool Balance is
$15,000 or less, a portion of the Class P Deposit shall be paid as
principal with respect to the Class P Certificates such that the
remaining Class P Deposit is always less than 0.66% of the sum of the
Pool Balance and the remaining Class P Deposit. After all of the REMIC
I Regular Interests (other than the Class P Certificates) have been
paid in full, the remaining available funds in REMIC I shall first be
applied to reduce the principal balance of the Class P Certificates to
zero, and then shall be payable with respect to the Class R-I
Certificates. It is not expected that there will be any distribution on
the Class R-I Certificates. It is not expected that there will be any
distribution on the Class R-I Certificates.
(e) The REMIC I Interests will have the following designations
and pass-through rates, and distributions of interest thereon shall be
allocated to the Certificates in the following manner:
-----------------------------------------------------------------------
REMIC I INTERESTS INITIAL PASS-THROUGH ALLOCATION
BALANCE ($) RATE (%) OF INTEREST
-----------------------------------------------------------------------
LT-A1F 6,266.40 (2) 7(a), 8(a)
-----------------------------------------------------------------------
LT-A2F 3,150.00 (2) 7(a), 8(a)
-----------------------------------------------------------------------
LT-A3F 3,000.00 (2) 7(a), 8(a)
-----------------------------------------------------------------------
LT-A4F 4,250.00 (2) 7(a), 8(a)
-----------------------------------------------------------------------
LT-A5F 2,821.60 (2) 7(a), 8(a)
-----------------------------------------------------------------------
LT-A6F 1,400.00 (2) 7(a), 8(a)
-----------------------------------------------------------------------
LT-MF 208,860,684.38 (1) (6a), (7a)
-----------------------------------------------------------------------
LT-AV1 12,367.66 (4) (6b), (7b)
-----------------------------------------------------------------------
LT-MV1 125,547,895.79 (3) (6b), (7b)
-----------------------------------------------------------------------
LT-AV2 12,367.66 (6) (6)
-----------------------------------------------------------------------
LT-MV2 125,547,660.76 (5) (6)
-----------------------------------------------------------------------
P 0 (9) N/A
-----------------------------------------------------------------------
R-I 0 (10) N/A
-----------------------------------------------------------------------
-------------
(1) The per annum pass-through rate ("Pass-Through Rate") on the Class
LT-MF Certificates shall at any time of determination equal the
weighted net average Mortgage Loan Rate in the Fixed Rate Group ("Fix
WAC"). For this purpose, the Mortgage Loan Rate shall be net of the
Monthly Servicing Fee, the Trustee Fee, the PMI Insurer Premium and the
Certificate Insurer Premium, each to the extent they are attributable
to Mortgage Loans in
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the Fixed Rate Group and each expressed as an annual percentage of the
Fixed Rate Group Balance. If there are any prepayment interest
shortfalls with respect to the Fixed Rate Group not covered by
Compensating Interest for the Fixed Rate Group, such shortfall will
proportionally reduce the interest accrued on the Class LT-AF and Class
LT-MF Certificates.
(2) The per annum pass-through rate ("Pass-Through Rate") on the Fixed Rate
Group Certificates shall at any time of determination equal Fix WAC (as
defined in Note 1 above).
(3) The per annum pass-through rate ("Pass-Through Rate") on the Class
LT-MV1 Certificates shall at any time of determination equal the
weighted net average Mortgage Loan Rate in Adjustable Rate Group I
("Adj. WAC1"). For this purpose, the Mortgage Loan Rate shall be net of
the Monthly Servicing Fee, the Trustee Fee, the PMI Insurer Premium and
the Certificate Insurer Premium, each to the extent they are
attributable to Mortgage Loans in Adjustable Rate Group I and each
expressed as an annual percentage of the Adjustable Rate Group I
Balance. If there are any Prepayment Interest Shortfalls with respect
to Adjustable Rate Group I not covered by Compensating Interest and not
covered by the Certificate Insurance Policy for Adjustable Rate Group
I, such shortfall will proportionally reduce the interest accrued on
the Class LT-AV1 and Class LT-MV1 Certificates.
(4) The per annum pass-through rate ("Pass-Through Rate") on the Class
LT-AV1 Certificates shall at any time of determination equal Adj. WAC1
(as defined in Note 3 above).
(5) The per annum pass-through rate ("Pass-Through Rate") on the Class
LT-MV2 Certificates shall at any time of determination equal the
weighted net average Mortgage Loan Rate in Adjustable Rate Group II
("Adj. WAC2"). For this purpose, the Mortgage Loan Rates shall be net
of the Monthly Servicing Fee, the Trustee Fee, the PMI Insurer Premium
and the Certificate Insurer Premium, each to the extent they are
attributable to Mortgage Loans in Adjustable Rate Group II and each
expressed as an annual percentage of the Adjustable Rate Group II
Balance. If there are any Prepayment Interest Shortfalls with respect
to Adjustable Rate Group II not covered by Compensating Interest and
not covered by the Certificate Insurance Policy for Adjustable Rate
Group II, such shortfall will proportionally reduce the interest
accrued on the Class LT-AV2 and Class LT-MV2 Certificates.
(6) The per annum pass-through rate ("Pass-Through Rate") on the Class
LT-AV2 Certificates shall at any time of determination equal Adj. WAC2
(as defined in Note 5 above).
(7) (a) Except as provided in Note 8, interest on the Class LT-AF and Class
LT-MF Certificates will be allocated to the Fixed Rate Group
Certificates in the same proportion as interest is payable on such
Fixed Rate Group Certificates.
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(b) Except as provided in Note 8, interest on the Class LT-AV1 and
Class LT-MV1 Certificates will be allocated to the Class A-V1
Certificates, and interest on the Class LT-AV2 and Class LT-MV2
Certificates will be allocated to the Class A-V2 Certificates.
(8) (a) Any interest with respect to this REMIC I Interest in excess of the
product of (i) 10,000 times the weighted average Pass-Through Rates of
the Class LT-AF and Class LT-MF Certificates, where each of such Class
LT-AF Certificates is first subject to a cap and floor equal to their
respective Fixed Rate Group Certificate Pass-Through Rates and where
the Class LT-MF Certificate Pass-Through Rate is subject to a cap equal
to 0%, and (ii) the principal balance of this REMIC I Interest, shall
not be allocated to the Fixed Rate Group Certificates but will be
allocated to the Class C Certificates as a separate component (the
"Class C-F Component").
(b) Any interest with respect to this REMIC II Interest in excess of
the product of (A) in the case of Adjustable Rate Group I (i) 10,000
times the weighted average Pass-Through Rate of the Class LT-AV1 and
Class LT-MV1 Certificates, where such Class LT-AV1 Certificates are
first subject to a cap and floor equal to their Class A-V1 Pass-Through
Rates and where the Class LT-MV1 Certificate Pass-Through Rate is
subject to a cap equal to 0%, and (ii) the principal balance of this
REMIC I Interest, shall not be allocated to the Adjustable Rate Group I
Certificates but will be allocated to the Class C Certificates as a
separate component (the "Class C-V1 Component") and (B) in the case of
Adjustable Rate Group II (i) 10,000 times the weighted average
Pass-Through Rate of the Class LT-AV2 and Class LT-MV2 Certificates,
where such Class LT-AV2 Certificates are first subject to a cap and
floor equal to their Class A-V2 Pass-Through Rates and where the Class
LT-MV2 Certificate Pass-Through Rate is subject to a cap equal to 0%,
and (ii) the principal balance of this REMIC I Interest, shall not be
allocated to the Adjustable Rate Group II Certificates but will be
allocated to the Class C Certificates as a separate component (the
"Class C-V2 Component").
(9) The Class P Certificates shall be entitled to receive all Prepayment
Charges collected with respect to the Mortgage Loans. Such Prepayment
Charges shall not be available for distribution with respect to any
other Class of REMIC I Interests. The Prepayment Charges received by
the Class P Certificates shall not be applied to the principal balance
of those certificates.
(10) On each Distribution Date, available funds, if any, (other than the
Class P Deposit) remaining in the REMIC I after payments of interest
and principal with respect to the REMIC I Regular Interests (other than
the Class P Deposit), as described above, will be distributed with
respect to the Class R-I Certificate.
(f) REMIC II will be evidenced by the Fixed Rate Group
Certificates (the "Remic I Regular Interests") which are hereby
designated as the "regular interests" in REMIC II and the Class R-II is
hereby designated as the single "residual interest" in REMIC II. For
purposes of the REMIC provisions, interest payable in excess of the
Adjustable Rate Group I Available Funds Cap and the Adjustable Rate
Group II
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Available Funds Cap respectively, shall not be paid from REMIC II but
shall be paid pursuant to Section 501(b)(9) from the interest
considered payable with respect to the Class C Certificates. After all
the REMIC II Regular Interests have been paid in full, the remaining
available funds in REMIC II shall be payable with respect to the Class
R-II Certificates.
(g) The Closing Date is hereby designated as the "Startup Day"
of each of REMIC I and REMIC II within the meaning of Section
860G(a)(9) of the Code. The "latest possible maturity date", solely for
purposes of Treasury regulation ss.1.860G-1(a)(4)(iii), of each of the
REMIC I Regular Interests and each of the "regular interests" with
respect to REMIC II is October 25, 2030.
ARTICLE X
TERMINATION
Section 10.01 Termination Upon Purchase or Liquidation of All Mortgage
Loans. Subject to Section 10.02, the respective obligations and responsibilities
hereunder of the Servicer, the Seller and the Trustee (other than the obligation
of the Trustee to make certain payments to Certificateholders after the final
Distribution Date and the obligation of the Seller to send certain notices as
hereinafter set forth) and the Trust created hereby shall terminate with respect
to all Certificates upon the last action required to be taken by the Trustee on
the final Distribution Date pursuant to this Article following the earlier of
(a) the purchase by the Servicer of all Mortgage Loans then remaining in the
Trust all property acquired by the Trust in respect of any such Mortgage Loan at
a price equal to the sum of (x) 100% of the Principal Balance of each such
Mortgage Loan (other than any Mortgage Loan as to which title to the underlying
Mortgaged Property has been acquired and whose fair market value is included
pursuant to clause (y) below) as of the final Distribution Date, (y) the fair
market value of such acquired Mortgaged Property (determined as described
below), plus accrued and unpaid interest at the applicable Mortgage Loan Rate on
the Principal Balance of each such Mortgage Loan (including any Mortgage Loan as
to which title to the underlying Mortgaged Property has been acquired) through
the end of the Collection Period preceding the date of repurchase and the
aggregate amount of unreimbursed Servicing Advances made in respect of any such
Mortgage Loan, less any payments of principal and interest received during such
Collection Period in respect of each such Mortgage Loan and (z) any amounts due
the Certificate Insurer under the Insurance Agreement (the "Termination Price")
or (b) the final payment or other liquidation of the Principal Balance of the
last Mortgage Loan remaining in the Trust or the disposition of all property
remaining in the Trust acquired upon foreclosure or deed in lieu of foreclosure
of any such Mortgage Loan; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of
the United States to the Court of St. Xxxxx, who are living on the Closing Date.
The fair market value of Mortgaged Properties pursuant to the foregoing clause
(y) shall be determined by the Servicer as of the close of business on the third
Business Day next preceding the date upon which notice of any such termination
is furnished to Certificateholders pursuant to the third paragraph of this
Section 10.01. Such determination shall not be effective unless consented to in
writing by the Certificate Insurer, which consent shall not
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be unreasonably withheld. In the event that the Certificate Insurer does not
consent to the fair market value determined by the Servicer within three
business days of receiving notice of such determination, the Certificate Insurer
and the Servicer shall appoint a mutually agreed appraiser to make a
determination as to such fair market value whose determination shall be final
and binding on the Certificate Insurer and the Servicer, the expense of such
appraisal being borne equally by the Servicer and the Certificate Insurer and
not being an expense of the Trust.
The right of the Servicer to purchase all outstanding Mortgage Loans
pursuant to clause (a) above is exercisable only on or after the related
Clean-up Call Date. If such right is exercised, (i) the Servicer shall remit the
Termination Price specified in this Section to the Trustee for deposit in the
Certificate Account pursuant to Section 3.02 (e) on or before the related
Deposit Date and (ii) the Trustee, if it has received the Mortgage Files
pursuant to Section 2.01, shall, promptly following remittance of such
Termination Price, release to the Servicer the Mortgage Files pertaining to the
Mortgage Loans being purchased and all other documents furnished by the Servicer
as are necessary to transfer the Trustee's interest in the Mortgage Loans to the
Servicer.
Notice of any termination, specifying the Distribution Date (which
shall be a date that would otherwise be a Distribution Date) upon which the
related Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation shall be given promptly by
the Trustee (upon receipt of written directions from the Servicer, not later
than the 15th day of the month preceding the month of such final distribution)
by letter to Certificateholders mailed not earlier than the first day and not
later than the 10th day of the month of such final distribution specifying (a)
the Distribution Date upon which final distribution of the related Certificates
will be made upon presentation and surrender of Certificates at the office or
agency of the Trustee therein designated, (b) the amount of any such final
distribution and (c) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office or agency of the
Trustee therein specified. In the event written directions are delivered by the
Servicer to the Trustee as described in the preceding sentence, the Servicer
shall deposit in the Certificate Account on or before the related Deposit Date
for such final distribution in immediately available funds an amount equal to
the purchase price for such assets of the Trust computed as above provided. Such
deposit shall be in lieu of the deposit otherwise required to be made in respect
of such Distribution Date pursuant to Section 3.02 and the related distribution
thereof to Certificateholders.
If the termination of the Trust is in connection with a purchase of the
assets of the Trust by the Servicer pursuant to clause (a) of the first
paragraph in this Section, the Trustee shall cause to be distributed to
Certificateholders on the final Distribution Date, an amount equal to (i) as to
the Offered Certificates, and upon presentation and surrender thereof, to the
Holders thereof in proportion to their respective Percentage Interests the
Certificate Principal Balance, and the Accrued Certificate Interest applicable
to such Offered Certificate and (ii) as to the Servicer, any additional
servicing compensation with respect to such Distribution Date (other than
amounts retained to meet claims) after application pursuant to the clauses (i)
and (ii) above and payment to the Servicer of any amounts to which it is
entitled as reimbursement hereunder and (iii) as to the Class C
Certificateholders and upon presentation and surrender of the Class C
Certificates, in
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proportion to their Percentage Interests, any amounts remaining after
application pursuant to clauses (i) and (ii), up to an amount equal to the Class
C Distribution Amount and any Class C Carryforward Amount; provided, however,
that if the fair market value of any acquired property referred to in, or
covered by, clause (a)(y) of the first paragraph of this Section is less than
the Principal Balance of the related Mortgage Loan, then the excess of such
Principal Balance over such fair market value shall be allocated in reduction of
the amounts otherwise distributable on the final Distribution Date in the
following order of priority: first, to the Holders of the applicable Class R
Certificates, second to the Holders of the Class C Certificate and third to the
Holders of the related Offered Certificates, pro rata based on the Certificate
Principal Balances thereof on such Distribution Date. The distribution on the
final Distribution Date in connection with the purchase by the Servicer of the
assets in the Trust shall be in lieu of the distribution otherwise required to
be made on such Distribution Date in respect of each Class of Certificates. The
Servicer shall provide in writing to the Trustee and the Certificate Insurer the
information with respect to the amounts so to be paid.
In the event that all of the relevant Certificateholders shall not
surrender their Certificates for final payment and cancellation on or before the
fifth day following such final Distribution Date, the Trustee shall on such date
cause all funds in the Certificate Account not distributed in the final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by holding such funds uninvested in a separate
escrow account for the benefit of such Certificateholders, and the Servicer (if
the Servicer exercised its right to purchase the assets of the Trust as provided
above) or the Trustee (in any other case) shall give a second written notice to
the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, any funds deposited in such escrow account and
remaining unclaimed shall be paid by the Trustee to the Servicer and thereafter
Certificateholders shall look only to the Servicer with respect to any claims in
respect of such funds.
Section 10.02 Additional Termination Requirements. In the event the
Servicer exercises its purchase option as provided in Section 10.01, each REMIC
Pool shall be terminated in accordance with the following additional
requirements, and the Trustee and the Certificate Insurer shall receive an
Opinion of Counsel to the effect that the termination of such REMIC Pool (i)
will constitute a "qualified liquidation" of each REMIC Pool within the meaning
of Code Section 860F(a)(4)(A), and (ii) will not subject such REMIC Pool to tax
or cause such REMIC Pool to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(i) Within 90 days prior to the final Distribution Date set
forth in the notice of intention to purchase the Mortgage Loans given
by the Servicer under Section 10.01, the Trustee, at the direction of
the Servicer, shall adopt a plan of complete liquidation of each REMIC
Pool on behalf of the REMIC within the meaning of Code Section
860F(a)(4)(A)(8), which shall be evidenced by such notice; and
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of each
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REMIC Pool to the Servicer, as the case may be, for cash at the
purchase price specified in Section 10.01 and shall distribute such
cash in the manner specified in Section 10.01.
(iii) The Holder of the Class R Certificates will be deemed to
have adopted a plan of liquidation on the date that the Trustee, at the
direction of the Servicer, has adopted such plan. The Trustee shall
attach a statement to the final return of each REMIC Pool for which a
plan of liquidation is adopted by the Trustee, at the direction of the
Servicer, setting forth the date of adoption of the plan of
liquidation.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. This Agreement may be amended from time to
time by the Servicer, the Seller and the Trustee, without the consent of any of
the Certificateholders but with the prior written consent of the Certificate
Insurer (which consent shall not be unreasonably withheld), (a) to cure any
error or any ambiguity or to correct or supplement any provisions herein which
may be inconsistent with any other provisions herein; (b) to add to the duties
or obligations of the Servicer hereunder; (c) to maintain or improve any rating
then assigned by any Rating Agency to any subclass of the Offered Certificates;
(d) to add any other provisions with respect to matters or questions arising
under this Agreement or the Certificate Insurance Policy, as the case may be
(including specifically amendments or supplements pursuant to the second
paragraph of Section 6.02(b)); (e) to modify, eliminate or add to any of its
provisions to such extent as shall be necessary to maintain the qualification of
each REMIC Pool as a REMIC at all times that any Certificates are outstanding or
to avoid or minimize the risk of the imposition of any tax on any REMIC Pool
pursuant to the Code that would be a claim against any REMIC Pool, provided that
in the case of this clause (e) the Trustee has received an Opinion of Counsel
delivered to the Trustee and the Certificate Insurer to the effect that such
action is necessary or desirable to maintain such qualification or to avoid or
minimize the risk of the imposition of any such tax; (f) to modify, eliminate or
add to the provisions of Section 6.02(c) or any other provisions hereof
restricting transfer of the Class R Certificates or (g) to modify, eliminate or
add to the provisions hereunder in order to provide for one or more third
parties to effect all or a portion of the Monthly Advances or Servicing Advances
and to provide for the reimbursement from the Trust Fund of such third party for
such Monthly Advances or Servicing Advances (i) from amounts payable to the
Servicer, (ii) from collections which the Servicer would have been permitted to
otherwise retain and (iii) from any other amounts that would otherwise be
payable to the Servicer if the Servicer had made such Monthly Advances or
Servicing Advances or from such other funds owed to the Servicer, in each case
as the Servicer shall agree; provided that in all such cases the Trustee has
obtained written confirmation from each Rating Agency that any such
modifications to this Agreement will not result in a qualification, reduction or
withdrawal of the rating assigned to any Class of Offered Certificates by such
Rating Agency and has received an Opinion of Counsel (a copy of which has been
delivered to the Certificate Insurer) to the effect that any such modifications
to this Agreement do not give rise to a risk that any REMIC Pool or any of the
Certificateholders will be subject to a tax caused by a transfer to a
Disqualified Organization; provided, further, that in all such cases such action
shall not, as evidenced by an
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Opinion of Counsel (a copy of which has been delivered to the Certificate
Insurer), adversely affect in any material respect the interests of any
Certificateholder or the Certificate Insurer.
This Agreement may also be amended from time to time by the Servicer,
the Seller and the Trustee, with the consent of the Certificate Insurer (which
consent shall not be unreasonably withheld) and the Holders of Certificates
evidencing Voting Interests of each Class affected thereby aggregating not less
than 51%, 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 of such Class; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, collections of payments on Mortgage Loans or distributions
which are required to be made on any Certificate without the consent of the
Holder of such Certificate or (b) reduce the aforesaid percentage of each Class
the Holders of which are required to consent to any such amendment, without the
consent of the Holders of all Certificates of such Class then outstanding.
Promptly after the execution of any such amendment or consent pursuant
to the next preceding paragraph, the Trustee shall furnish written notification
of the substance of such amendment to each affected Certificateholder and each
Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Trustee
and the Certificate Insurer shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall not be obligated to,
enter into any such amendment that affects the Trustee's own rights, duties or
immunities under this Agreement.
Section 11.02 Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Servicer, at its
expense but only upon, determination of the Servicer accompanied by an Opinion
of Counsel (a copy of which has been delivered to the Certificate Insurer) to
the effect that such recordation is legally required to protect the Trustee's
interest in the Mortgage Loans.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
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Section 11.03 Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement, the Trust or any REMIC established pursuant to Section 3.01, nor
entitle such Certificateholder's legal representatives or heirs to claim an
accounting or to take any action or commence any proceeding in any court for a
partition or winding up of the Trust or any REMIC established pursuant to this
Agreement, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as otherwise expressly provided herein, no Certificateholder,
solely by virtue of its status as a Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust or any REMIC established pursuant to this Agreement, or the obligations of
the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
No Certificateholder, solely by virtue of its status as a
Certificateholder, shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates evidencing Voting Interests represented by all
Certificates (or all affected Certificates, as appropriate) aggregating not less
than 51% shall have obtained the prior written consent of the Certificate
Insurer and made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder, the Trustee, and the
Certificate Insurer that no one or more Holders of Certificates shall have any
right in any manner whatever by virtue or by availing itself or themselves of
any provision of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other Certificates, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section, each and every Certificateholder, the
Certificate Insurer and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 11.04 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York (without regard to conflict of
laws principles and the application of the laws of any other jurisdiction), and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
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Section 11.05 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (a) in the case of the Seller, at 000 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attn: Chief Financial Officer, with a copy to General
Counsel; (b) in the case of the Trustee, at the Corporate Trust Office at 0000
Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, Attn: Aames Capital
Corporation, Series 2000-1; (c) in the case of the Certificate Insurer,
Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attn: Surveillance Department Re: Aames Mortgage Trust 1999-2; (d) in the case
of the Servicer, Countrywide Home Loans, Inc. 0000 Xxxx Xxxxxxx, Xxxxxxxxx
Xxxxxxxxxx 00000 Attn: Xxxx Xxxxxx with a copy to Countrywide Home Loans, Inc.
000 Xxxxxxxxxxx Xxx, Xxxx Xxxxxx, Xxxxxxxxxx 00000, Attn: Xxxx Xxxxxxx, Vice
President; (e) in the case of S&P, to Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Mortgage Surveillance Group; (f) in the
case of Moody's, to Xxxxx'x Investors Service Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: Residential Mortgage Pass-Through Monitoring; (g) in the
case of Fitch, to Fitch, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000;
and (h) in the case of the PMI Insurer, Mortgage Guaranty Insurance Corporation,
MGIC Plaza, X.X. Xxx 000, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxx Xxxxxxx or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first class mail, postage
prepaid, at its address shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such notice.
Any notice or other document required to be delivered or mailed by the Trustee
to any Rating Agency shall be given on a best efforts basis and only as a matter
of courtesy and accommodation and the Trustee shall have no liability for
failure to deliver such notice or document to any such Rating Agency.
Section 11.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 11.07 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in this Section and Sections 7.02, 7.04 and
7.05, this Agreement may not be assigned by the Seller or the Servicer without
the prior written consent of the Certificate Insurer and the Holders of
Certificates evidencing not less than 66% of the Voting Interests of all
Certificates.
Section 11.08 Certificates Nonassessable and Fully Paid. The parties
agree that the Certificateholders shall not be personally liable for obligations
of the Trust, that the beneficial ownership interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and that Certificates upon execution, authentication
and delivery thereof by the Trustee pursuant to Section 2.06 are and shall be
deemed fully paid.
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Section 11.09 Third Party Beneficiary; Rating.
(a) The Certificate Insurer is an intended third-party beneficiary of
this Agreement. This Agreement shall be binding upon and inure to the benefit of
the Certificate Insurer; provided that, notwithstanding the foregoing, for so
long as a Certificate Insurer Default is continuing under its obligations under
the Certificate Insurance Policy, the Offered Certificateholders shall succeed
to the Certificate Insurer's rights hereunder; provided, further, that even if a
Certificate Insurer Default is continuing this Agreement may not be amended
except upon delivery to the Certificate Insurer of an Opinion of Counsel
acceptable to the Certificate Insurer to the effect that such amendment shall
not adversely affect in any material respect the interests of the Certificate
Insurer. Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement that expressly confer rights upon the Certificate
Insurer shall be for the benefit of and run directly to the Certificate Insurer,
and the Certificate Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Agreement.
(b) In the event the rating of the claims paying ability of the
Certificate Insurer by any of the Rating Agencies is reduced to a rating that is
below "investment grade" (as that term is then commonly used), the Servicer
shall, at its own expense, seek to obtain ratings of each Class of Offered
Certificates (apart from the rating related to the Certificate Insurance Policy)
from such Rating Agency.
Section 11.10 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
[Signatures follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers, all as of the day and year first
above written.
AAMES CAPITAL CORPORATION,
as Seller
By:
-------------------------------------
Name:
Title:
BANKERS TRUST COMPANY
OF CALIFORNIA, N.A.,
as Trustee and not in its
individual capacity
By:
-------------------------------------
Name:
Title:
COUNTRYWIDE HOME LOANS, INC.
as Servicer
By:
-------------------------------------
Name:
Title:
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State of New York )
) ss.:
County of New York )
On the 21st day of September in the year 2000, before me, the
undersigned, personally appeared __________________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
-------------------------------------
Notary Public
[Notary Seal]
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State of California )
) ss.:
County of Los Angeles )
On the 21st day of September in the year 2000, before me, the
undersigned, personally appeared ______________________, personally known to me
or proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.
-------------------------------------
Notary Public
[Notary Seal]
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State of _________ )
) ss.:
County of _______ )
On the 21st day of September in the year 2000, before me, the
undersigned, personally appeared ______________, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her capacity, and that by his/her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.
-------------------------------------
Notary Public
[Notary Seal]
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