EXHIBIT 4.1
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WACHOVIA MORTGAGE LOAN TRUST, LLC,
as Depositor,
[ ],
as Servicer,
and
[ ],
as Trustee
POOLING AND SERVICING AGREEMENT
Dated, [ ] [ ], 200
_______________________
Mortgage Pass-Through Certificates
Series 200 -
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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT........................................................1
ARTICLE I DEFINITIONS...................................................3
Section 1.01. Defined Terms...........................................3
Section 1.02. Interest Calculations..................................25
ARTICLE II CONVEYANCE OF MORTGAGE LOANS ORIGINAL ISSUANCE OF
CERTIFICATES.................................................25
Section 2.01. Conveyance of Mortgage Loans...........................25
Section 2.02. Acceptance by the Trustee of the Mortgage Loans........28
Section 2.03. Representations, Warranties and Covenants of the
Servicer...............................................30
Section 2.04. Representations and Warranties of the Depositor as
to the Mortgage Loans..................................31
Section 2.05. Designation of Interests in the REMIC..................39
Section 2.06. Designation of Start-up Day............................39
Section 2.07. REMIC Certificate Maturity Date........................39
Section 2.08. Execution and Delivery of Certificates.................39
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............39
Section 3.01. Servicer to Service Mortgage Loans.....................39
Section 3.02. Subservicing; Enforcement of the Obligations of
Servicer...............................................40
Section 3.03. Fidelity Bond; Errors and Omissions Insurance..........41
Section 3.04. Access to Certain Documentation........................42
Section 3.05. Maintenance of Primary Mortgage Insurance Policy;
Claims.................................................42
Section 3.06. Rights of the Depositor and the Trustee in Respect
of the Servicer........................................43
Section 3.07. Trustee to Act as Servicer.............................43
Section 3.08. Collection of Mortgage Loan Payments; Servicer
Custodial Account; Certificate Account; and
Upper-Tier Certificate Account.........................44
Section 3.09. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts.................................47
Section 3.10. Access to Certain Documentation and Information
Regarding the Mortgage Loans...........................48
Section 3.11. Permitted Withdrawals from the Servicer Custodial
Account; Certificate Account and Upper-Tier
Certificate Account....................................48
Section 3.12. Maintenance of Hazard Insurance........................50
Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.............................................51
Section 3.14. Realization Upon Defaulted Mortgage Loans; REO
Property...............................................52
Section 3.15. Trustee to Cooperate; Release of Mortgage Files........55
Section 3.16. Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee....................56
Section 3.17. Servicing Compensation.................................56
Section 3.18. Advances...............................................57
Section 3.19. Modifications, Waivers, Amendments and Consents........57
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ARTICLE IV SERVICER'S CERTIFICATE and 1934 ACT REPORTING................59
Section 4.01. Servicer's Certificate.................................59
Section 4.02. Reports to the Securities and Exchange Commission......59
Section 4.03. Annual ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification....................59
Section 4.04. Annual Servicing Criteria Assessment Report............60
Section 4.05. Annual Independent Public Accountants' Attestation.....60
Section 4.06. Annual Statement as to Compliance......................60
Section 4.07. Required Information for Form 10-D.....................61
ARTICLE V PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS; REMIC
ADMINISTRATION...............................................61
Section 5.01. Distributions..........................................61
Section 5.02. Priorities of Distributions............................62
Section 5.03. Allocation of Losses...................................65
Section 5.04. Statements to Certificateholders.......................66
Section 5.05. Tax Returns and Reports to Certificateholders..........69
Section 5.06. Tax Matters Person.....................................70
Section 5.07. Rights of the Tax Matters Person in Respect of the
Trustee................................................70
Section 5.08. REMIC Related Covenants................................70
Section 5.09. Determination of LIBOR.................................71
ARTICLE VI THE CERTIFICATES.............................................72
Section 6.01. The Certificates.......................................72
Section 6.02. Registration of Transfer and Exchange of
Certificates...........................................72
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates......77
Section 6.04. Persons Deemed Owners..................................77
ARTICLE VII THE DEPOSITOR AND THE SERVICER...............................77
Section 7.01. Respective Liabilities of the Depositor and the
Servicer...............................................77
Section 7.02. Merger or Consolidation of the Depositor or the
Servicer...............................................77
Section 7.03. Limitation on Liability of the Depositor, the
Servicer and Others....................................78
Section 7.04. Depositor and Servicer Not to Resign...................78
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ARTICLE VIII DEFAULT......................................................79
Section 8.01. Events of Default......................................79
Section 8.02. Remedies of Trustee....................................80
Section 8.03. Directions by Certificateholders and Duties of
Trustee During Event of Default........................80
Section 8.04. Action upon Certain Failures of the Servicer and
upon Event of Default..................................81
Section 8.05. Trustee to Act; Appointment of Successor...............81
Section 8.06. Notification to Certificateholders.....................82
ARTICLE IX THE TRUSTEE..................................................82
Section 9.01. Duties of Trustee......................................82
Section 9.02. Certain Matters Affecting the Trustee..................83
Section 9.03. Trustee Not Liable for Certificates or Mortgage
Loans..................................................84
Section 9.04. Trustee May Own Certificates...........................86
Section 9.05. Eligibility Requirements for Trustee...................86
Section 9.06. Resignation and Removal of Trustee.....................86
Section 9.07. Successor Trustee......................................87
Section 9.08. Merger or Consolidation of Trustee.....................87
Section 9.09. Appointment of Co-Trustee or Separate Trustee..........87
Section 9.10. Authenticating Agents..................................88
Section 9.11. Trustee's Fees and Expenses............................89
Section 9.12. Appointment of Custodian...............................90
Section 9.13. Paying Agents..........................................90
Section 9.14. Limitation of Liability................................91
Section 9.15. Trustee May Enforce Claims Without Possession of
Certificates...........................................91
Section 9.16. Suits for Enforcement..................................91
Section 9.17. Waiver of Bond Requirement.............................91
Section 9.18. Waiver of Inventory, Accounting and Appraisal
Requirement............................................91
ARTICLE X TERMINATION..................................................92
Section 10.01. Termination upon Purchase by the Depositor or
Liquidation of All Mortgage Loans......................92
Section 10.02. Additional Termination Requirements....................93
ARTICLE XI COMPLIANCE WITH REGULATION AB................................94
Section 11.01. Intent of the Parties; Reasonableness..................94
Section 11.02. Additional Representations and Warranties of the
Trustee................................................94
Section 11.03. Information to Be Provided by the Trustee..............95
Section 11.04. Report on Assessment of Compliance and Attestation.....95
Section 11.05. Indemnification Remedies...............................96
ARTICLE XII MISCELLANEOUS PROVISIONS.....................................96
Section 12.01. Amendment..............................................96
Section 12.02. Recordation of Agreement...............................98
Section 12.03. Limitation on Rights of Certificateholders.............98
Section 12.04. Governing Law..........................................99
Section 12.05. Notices................................................99
Section 12.06. Severability of Provisions.............................99
Section 12.07. Certificates Nonassessable and Fully Paid..............99
Section 12.08. Access to List of Certificateholders...................99
Section 12.09. Recharacterization....................................100
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TABLE OF CONTENTS
(Cont'd)
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of 1-A-R Certificate
Exhibit B Form of Class ▇-▇, ▇-▇ and B-3 Certificate
Exhibit C Form of Class ▇-▇, ▇-▇ and B-6 Certificate
Exhibit D Mortgage Loan Schedule
Exhibit E Request for Release of Documents
Exhibit F Form of Certification of Establishment of Account
Exhibit G-1 Form of Transferor's Certificate
Exhibit G-2A Form 1 of Transferee's Certificate
Exhibit G-2B Form 2 of Transferee's Certificate
Exhibit H Form of Transferee Representation Letter for ERISA
Restricted Certificates
Exhibit I-1 Form of Affidavit Regarding Transfer of Residual
Certificates
Exhibit I-2 Form of Transferor Certificate Regarding Transfer of
Residual Certificates
Exhibit J Form of Lost Note Affidavit
Exhibit K Form of Custodial Agreement
Exhibit L Form of Initial Certification
Exhibit M Form of Final Certification
Exhibit N Form of 10-K Certification
Exhibit O Servicing Criteria
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POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated [ ] [ ],
200 is hereby executed by and among WACHOVIA MORTGAGE LOAN TRUST, LLC, as
depositor (together with its permitted successors and assigns, the
"Depositor"), [ ], as servicer (together with its permitted
successors and assigns, the "Servicer"), and [ ], as trustee
(together with its permitted successors and assigns, the "Trustee").
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer and the Trustee agree as follows:
PRELIMINARY STATEMENT
In exchange for the Certificates, the Depositor hereby conveys
the Trust Estate to the Trustee to create the Trust. The Trust Estate for
federal income tax purposes will be treated as two separate real estate
mortgage investment conduits (the "Upper-Tier REMIC" and the "Lower-Tier
REMIC," respectively, and each, a "REMIC"). The Class A Certificates (other
than the Class A-R and Class A-LR Certificates) and the Class B Certificates
are referred to collectively as the "Regular Certificates" and shall
constitute "regular interests" in the Upper-Tier REMIC. The Uncertificated
Lower-Tier Interests shall constitute the "regular interests" in the
Lower-Tier REMIC. The Class A-R Certificate shall be the "residual interest"
in the Upper-Tier REMIC and the Class A-LR Certificate shall be the "residual
interest" in the Lower-Tier REMIC. The Certificates will represent the
entire beneficial ownership interest in the Trust. The "latest possible
maturity date" for federal income tax purposes of all interests created
hereby will be the REMIC Certificate Maturity Date.
The following table sets forth characteristics of the
Certificates, together with the minimum denominations and integral multiples
in excess thereof in which the Classes of Certificates shall be issuable
(except that one Certificate of each Class of Certificates may be issued in
any amount in excess of the minimum denomination):
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Initial Class Integral
Certificate Multiples
Balance or Pass-Through Minimum In Excess
Classes Notional Amount Rate Denomination Of Minimum
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Class A-1 $ % $ $
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Class A-2 $ % $ $
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Class A-3 $ % $ $
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Class A-4 $ (1) $ $
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Class A-5 $ (2) $ $
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Class A-6 $ % $ $
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Class A-PO $ (4) $ $
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Class A-WIO $ (3) $ $
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Class A-R $ % $ $
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Class A-LR $ % $ $
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Class B-1 $ % $ $
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Class B-2 $ % $ $
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Class B-3 $ % $ $
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Class B-4 $ % $ $
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Class B-5 $ % $ $
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Class B-6 $ % $ $
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(1) During the initial Interest Accrual Period, interest will accrue on the
Class A-4 Certificates at a rate of % per annum. During each Interest
Accrual Period thereafter, interest will accrue on the Class A-4 Certificates
at a per annum rate equal to (i) % plus (ii) LIBOR, subject to a minimum rate
of % and a maximum rate of %.
(2) During the initial Interest Accrual Period, interest will accrue on the
Class A-5 Certificates at a rate of % per annum. During each Interest
Accrual Period thereafter, interest will accrue on the Class A-5 Certificates
at a per annum rate equal to (i) % minus (ii) LIBOR, subject to a minimum
rate of % and a maximum rate of %.
(3) Interest will accrue on the Class A-WIO Notional Amount as of any
Distribution Date at a per annum rate equal to (i) the weighted average of
the Net Mortgage Interest Rates of the Premium Mortgage Loans (based on the
Stated Principal Balance of the Premium Mortgage Loans on the Due Date in the
month preceding the month of such Distribution Date minus (ii) %.
(4) Class A-PO Certificates will be Principal Only Certificates and will
not bear interest.
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
Accrued Certificate Interest: For any Distribution Date and each
interest-bearing Class, one month's interest accrued during the related
Interest Accrual Period at the applicable Pass-Through Rate on the applicable
Class Certificate Balance or Notional Amount, as applicable.
Adjusted Pool Amount: With respect to any Distribution Date, the
Cut-Off Date Pool Principal Balance of the Mortgage Loans minus the sum of
(i) all amounts in respect of principal received in respect of the Mortgage
Loans (including, without limitation, amounts received as Monthly Payments,
Periodic Advances, Principal Prepayments, Liquidation Proceeds and
Substitution Adjustment Amounts) and distributed to Holders of Certificates
on such Distribution Date and all prior Distribution Dates and (ii) the
principal portion of all Realized Losses (other than Debt Service Reductions)
incurred on the Mortgage Loans from the Cut-Off Date through the end of the
month preceding such Distribution Date.
Adjusted Pool Amount (PO Portion): With respect to any
Distribution Date, the sum of the amounts, calculated as follows, with
respect to all Outstanding Mortgage Loans: the product of (i) the PO
Percentage for each such Mortgage Loan and (ii) the remainder of (A) the
Cut-Off Date Principal Balance of such Mortgage Loan minus (B) the sum of (x)
all amounts in respect of principal received in respect of such Mortgage Loan
(including, without limitation, amounts received as Monthly Payments,
Periodic Advances, Principal Prepayments, Liquidation Proceeds and
Substitution Adjustment Amounts) and distributed to Holders of the
Certificates on such Distribution Date and all prior Distribution Dates and
(y) the principal portion of any Realized Loss (other than a Debt Service
Reduction) incurred on such Mortgage Loan from the Cut-Off Date through the
end of the month preceding such Distribution Date.
Advance: A Periodic Advance or a Servicing Advance.
Agreement: This Pooling and Servicing Agreement together with
all amendments hereof and supplements hereto.
Amount Held for Future Distribution: As to any Distribution
Date, the total of the amounts held in the Servicer Custodial Account at the
close of business on the preceding Determination Date on account of (i)
Principal Prepayments and Liquidation Proceeds received or made in the month
of such Distribution Date and (ii) payments which represent receipt of
Monthly Payments in respect of a Due Date or Due Dates subsequent to the
related Due Date.
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Appraised Value: With respect to any Mortgaged Property, either
(i) the lesser of (a) the appraised value determined in an appraisal obtained
by the originator at origination of such Mortgage Loan and (b) the sales
price for such property, except that, in the case of Mortgage Loans the
proceeds of which were used to refinance an existing mortgage loan, the
Appraised Value of the related Mortgaged Property is the appraised value
thereof determined in an appraisal obtained at the time of refinancing, or
(ii) the appraised value determined in an appraisal made at the request of a
Mortgagor subsequent to origination in order to eliminate the Mortgagor's
obligation to keep a Primary Insurance Policy in force.
Assignment of Mortgage: An individual assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable form,
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to give record notice of the sale of the Mortgage.
Authenticating Agents: As defined in Section 9.10.
Book-Entry Certificate: All Classes of Certificates other than
the Physical Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the State of North Carolina, the
State of New York, the state in which the servicing offices of the Servicer
is located or the state in which the Corporate Trust Office is located are
required or authorized by law or executive order to be closed.
Certificate: Any of the Wachovia Mortgage Loan Trust, LLC
Mortgage Pass-Through Certificates, Series 200 - that are issued pursuant
to this Agreement.
Certificate Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.08(c) in the name of the
Trustee for the benefit of the Certificateholders and designated " , in
trust for registered holders of Wachovia Mortgage Loan Trust, LLC Mortgage
Pass-Through Certificates, Series 200 - ." Funds in the Certificate
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Certificate Balance: With respect to any Certificate at any
date, the maximum dollar amount of principal to which the Holder thereof is
then entitled hereunder, such amount being equal to the product of the
Percentage Interest of such Certificate and the Class Certificate Balance of
the Class of Certificates of which such Certificate is a part.
Certificate Custodian: Initially, ; thereafter any other
Certificate Custodian acceptable to the Depository and selected by the
Trustee.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of a Book-Entry Certificate. With respect
to any Definitive Certificate, the Certificateholder of such Certificate.
Certificate Register: The register maintained pursuant to
Section 6.02.
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Certificate Registrar: The registrar appointed pursuant to
Section 6.02.
Certificateholder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered
in the name of the Depositor, the Servicer or any affiliate thereof shall be
deemed not to be outstanding and the Percentage Interest and Voting Rights
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests or Voting Rights, as the case may
be, necessary to effect any such consent has been obtained, unless such
entity is the registered owner of the entire Class of Certificates, provided
that the Trustee shall not be responsible for knowing that any Certificate is
registered in the name of such an affiliate unless one of its Responsible
Officers has actual knowledge.
Class: As to the Certificates, the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-PO, Class A-WIO, Class A-R,
Class A-LR, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class
B-6 Certificates, as the case may be.
Class A Certificates: The Class A-1, Class A-2, Class A-3, Class
A-4, Class A-5, Class A-6, Class A-PO, Class A-WIO, Class A-R and Class A-LR
Certificates.
Class A-5 Notional Amount: As to any Distribution Date and the
Class A-5 Certificates, the Class Certificate Balance of the Class A-4
Certificates.
Class A-PO Deferred Amount: As to any Distribution Date prior to
the Senior Credit Support Depletion Date, the aggregate of the applicable PO
Percentage of each Realized Loss to be allocated to the Class A-PO
Certificates on such Distribution Date or previously allocated to the Class
A-PO Certificates and not yet paid to the Holders of the Class A-PO
Certificates pursuant to Section 5.02(a)(iii) and the amount (without
duplication) of any reduction in the Class Certificate Balance of the Class
A-PO Certificates pursuant to Section 5.03(b).
Class A-WIO Notional Amount: As to any Distribution Date and the
Class A-WIO Certificates, the aggregate Stated Principal Balances of the
Premium Mortgage Loans on the Due Date in the month preceding the month of
such Distribution.
Class B Certificates: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
Class Certificate Balance: With respect to any Class (other than
the Class A-5 and Class A-WIO Certificates) and any date of determination,
the Initial Class Certificate Balance of such Class minus the sum of (i) all
distributions of principal made with respect thereto, (ii) all Realized
Losses allocated thereto pursuant to Section 5.03(a), and (iii) all other
reductions in Class Certificate Balance previously allocated thereto pursuant
to Section 5.03(b). The Class A-5 and Class A-WIO Certificates are
Interest-Only Certificates and have no Class Certificate Balance.
Class Interest Shortfall: For any Distribution Date and each
interest-bearing Class, the amount by which Accrued Certificate Interest for
such Class (as reduced pursuant to Section 5.02(c)) exceeds the amount of
interest actually distributed on such Class on such Distribution Date
pursuant to clause (i) of the definition of "Interest Distribution Amount."
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Class Unpaid Interest Shortfall: As to any Distribution Date and
each interest-bearing Class, the amount by which the aggregate Class Interest
Shortfalls for such Class on prior Distribution Dates exceeds the amount of
interest actually distributed on such Class on such prior Distribution Dates
pursuant to clause (ii) of the definition of "Interest Distribution Amount."
Closing Date: , 200 .
Code: The Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: As defined in Section 3.17.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: The principal office of the Trustee at
which at any particular time its certificate transfer services are conducted,
which office at the date of the execution of this instrument is located at
, , , Attention: .
Corresponding Upper-Tier Class or Classes: As to the following
Uncertificated Lower-Tier Interests, the Corresponding Upper-Tier Class or
Classes, as follows:
Uncertificated Lower-Tier Interest Corresponding Upper-Tier Class or Classes
Class A-L1 Interest Class A-1 Certificates, Class A-2
Certificates and Class A-6 Certificates
Class A-L3 Interest Class A-3 Certificates
Class A-L4 Interest Class A-4 Certificates and Class A-5
Certificates
Class A-LPO Interest Class A-PO Certificates
Class A-LUR Interest Class A-R Certificate
Class A-LWIO Interest Class A-WIO Certificates
Class B-L1 Interest Class B-1 Certificates
Class B-L2 Interest Class B-2 Certificates
Class B-L3 Interest Class B-3 Certificates
Class B-L4 Interest Class B-4 Certificates
Class B-L5 Interest Class B-5 Certificates
Class B-L6 Interest Class B-6 Certificates
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Custodian: Initially, the Trustee, and thereafter the Custodian,
if any, hereafter appointed by the Trustee pursuant to Section 9.12. The
Custodian may (but need not) be the Trustee or any Person directly or
indirectly controlling or controlled by or under common control of either of
them. Neither the Servicer nor the Depositor, nor any Person directly or
indirectly controlling or controlled by or under common control with any such
Person may be appointed Custodian.
Customary Servicing Procedures: With respect to the Servicer,
procedures (including collection procedures) that the Servicer customarily
employs and exercises in servicing and administering mortgage loans for its
own account and which are in accordance with accepted mortgage servicing
practices of prudent lending institutions servicing mortgage loans of the
same type as the Mortgage Loans in the jurisdictions in which the related
Mortgaged Properties are located.
Cut-Off Date: , 200 .
Cut-Off Date Pool Principal Balance: The aggregate of the
Cut-Off Date Principal Balances of the Mortgage Loans which is $ .
Cut-Off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the Cut-Off
Date, reduced by all installments of principal due on or prior thereto
whether or not paid.
Debt Service Reduction: As to any Mortgage Loan and any
Determination Date, the excess of (i) the Monthly Payment due on the related
Due Date under the terms of such Mortgage Loan over (ii) the amount of the
monthly payment of principal and/or interest required to be paid with respect
to such Due Date by the Mortgagor as established by a court of competent
jurisdiction (pursuant to an order which has become final and nonappealable)
as a result of a proceeding initiated by or against the related Mortgagor
under the Bankruptcy Code, as amended from time to time (11 U.S.C.); provided
that no such excess shall be considered a Debt Service Reduction so long as
(a) the Servicer is pursuing an appeal of the court order giving rise to any
such modification and (b)(1) such Mortgage Loan is not in default with
respect to payment due thereunder in accordance with the terms of such
Mortgage Loan as in effect on the Cut-Off Date or (2) Monthly Payments are
being advanced by the Servicer in accordance with the terms of such Mortgage
Loan as in effect on the Cut-Off Date.
Debt Service Reduction Mortgage Loan: Any Mortgage Loan that
became the subject of a Debt Service Reduction.
Defective Mortgage Loan: Any Mortgage Loan which is required to
be cured, repurchased or substituted for pursuant to Sections 2.02 or 2.04.
Deficient Valuation: As to any Mortgage Loan and any
Determination Date, the excess of (i) the then outstanding indebtedness under
such Mortgage Loan over (ii) the secured valuation thereof established by a
court of competent jurisdiction (pursuant to an order which has become final
and nonappealable) as a result of a proceeding initiated by or against the
related Mortgagor under the Bankruptcy Code, as amended from time to time (11
U.S.C.), pursuant to which such Mortgagor retained such Mortgaged Property;
provided that no such excess shall be considered a Deficient Valuation so
long as (a) the Servicer is pursuing an appeal of the court order giving rise
to any such modification and (b)(1) such Mortgage Loan is not in default with
respect to payments due thereunder in accordance with the terms of such
Mortgage Loan as in effect on the Cut-Off Date or (2) Monthly Payments are
being advanced by the Servicer in accordance with the terms of such Mortgage
Loan as in effect on the Cut-Off Date.
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Deficient Valuation Mortgage Loan: Any Mortgage Loan that became
the subject of a Deficient Valuation.
Definitive Certificates: As defined in Section 6.02(c)(iii).
Depositor: Wachovia Mortgage Loan Trust, LLC, a Delaware limited
liability company, or its successor in interest, as depositor of the Trust
Estate.
Depository: The Depository Trust Company, the nominee of which
is Cede & Co., as the registered Holder of the Book-Entry Certificates or any
successor thereto appointed in accordance with this Agreement. The
Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: As to any Distribution Date, the 16th day of
the month of the related Distribution Date or, if such 16th day is not a
Business Day, the Business Day immediately preceding such 16th day.
Discount Mortgage Loan: Any Mortgage Loan with a Net Mortgage
Interest Rate that is less than % per annum.
Distribution Date: The th day of each month beginning in
200 (or, if such day is not a Business Day, the next Business Day).
Due Date: As to any Distribution Date and each Mortgage Loan,
the first day in the calendar month of such Distribution Date.
Eligible Account: Any of (i) an account or accounts maintained
with (a) , or (b) a federal or state chartered depository institution or
trust company the short-term unsecured debt obligations of which (or, in the
case of a depository institution or trust company that is the principal
subsidiary of a holding company, the debt obligations of such holding
company) have the highest short-term ratings of each Rating Agency at the
time any amounts are held on deposit therein, or (ii) an account or accounts
in a depository institution or trust company in which such accounts are
insured by the FDIC (to the limits established by the FDIC) and the uninsured
deposits in which accounts are otherwise secured such that, as evidenced by
an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or
a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments) securing such funds that is
superior to claims of any other depositors or creditors of the depository
institution or trust company in which such account is maintained, or (iii) a
trust account or accounts maintained with the trust department of a federal
or state chartered depository institution or trust company, acting in its
fiduciary capacity or (iv) any other account acceptable to each Rating
Agency. Eligible Accounts may bear interest and may include, if otherwise
qualified under this definition, accounts maintained with the Trustee.
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ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificates: Any Class B-4, Class B-5, or
Class B-6 Certificate.
Escrow Account: As defined in Section 3.09.
Escrow Payments: The amounts constituting taxes, assessments,
Primary Insurance Policy premiums, fire and hazard insurance premiums and
other payments as may be required to be escrowed by the Mortgagor with the
mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
Event of Default: As defined in Section 8.01.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the amount, if any, by which the sum of any Liquidation Proceeds of such
Mortgage Loan received in the calendar month in which such Mortgage Loan
became a Liquidated Mortgage Loan, net of any amounts previously reimbursed
to the Servicer as Nonrecoverable Advance(s) with respect to such Mortgage
Loan pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal
balance of such Liquidated Mortgage Loan as of the Due Date in the month in
which such Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued
interest at the Mortgage Interest Rate from the Due Date as to which interest
was last paid or for which a Periodic Advance was made (and not reimbursed)
up to the Due Date applicable to the Distribution Date immediately following
the calendar month during which such liquidation occurred.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Final Distribution Date: The Distribution Date on which the
final distribution in respect of the Certificates will be made pursuant to
Section 10.01.
Financial Market Service: Bloomberg Financial Service and any
other financial information provider designated by the Depositor by written
notice to the Trustee.
FIRREA: The Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
[Fitch: Fitch Ratings, and its successors in interest.]
FNMA: ▇▇▇▇▇▇ ▇▇▇, or any successor thereto.
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Fractional Interest: As defined in Section 5.02(d).
Holder: A Certificateholder.
Independent: When used with respect to any specified Person
means such a Person who (i) is in fact independent of the Depositor and the
Servicer, (ii) does not have any direct financial interest or any material
indirect financial interest in the Depositor or the Servicer or in an
affiliate of either of them, and (iii) is not connected with the Depositor or
the Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Initial Class Certificate Balance: As to each Class of
Certificates (other than the Class A-5 and Class A-WIO Certificates), the
Class Certificate Balance set forth in the Preliminary Statement. The Class
A-5 and Class A-WIO Certificates are Interest-Only Certificates and have no
Initial Class Certificate Balance.
Initial Notional Amount: As to each Class of Interest-Only
Certificates, the Notional Amount set forth in the Preliminary Statement.
Insurance Policy: With respect to any Mortgage Loan included in
the Trust Estate, any related insurance policy, including all riders and
endorsements thereto in effect, including any replacement policy or policies
for any Insurance Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such
Insurance Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any
other insurance policy with respect to the Mortgage Loans.
Interest Accrual Period: As to any Distribution Date and each
Class of Certificates (other than the Class A-4, Class A-5 and A-PO
Certificates), the period from and including the first day of the calendar
month preceding the calendar month of such Distribution Date to but not
including the first day of the calendar month of such Distribution Date. As
to any Distribution Date and the Class A-4 and Class A-5 Certificates, the
period from and including the day of the calendar month preceding the
calendar month in which such Distribution Date occurs and ending on the
day of the calendar month in which such Distribution Date occurs.
Interest Distribution Amount: For any Distribution Date and each
interest-bearing Class, the sum of (i) the Accrued Certificate Interest,
subject to reduction pursuant to Section 5.02(c) and (ii) any Class Unpaid
Interest Shortfall for such Class.
Interest-Only Certificates: Any Class of Certificates entitled
to distributions of interest, but no distributions of principal. The Class
A-5 and Class A-WIO Certificates are the only Classes of Interest-Only
Certificates.
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LIBOR: As to any Distribution Date, the arithmetic mean of the
London Interbank offered rate quotations for one-month U.S. Dollar deposits,
as determined by the Trustee in accordance with Section 5.09.
LIBOR Business Day: Any Business Day on which banks are open for
dealing in foreign currency and exchange in London, England, the City of New
York and the State where the Corporate Trust Office is located.
LIBOR Certificates: Any of the Class A-4 and Class A-5
Certificates.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a defaulted Mortgage Loan (including any REO Property) that was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the Servicer has certified (in accordance with this Agreement) that it
has received all proceeds it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of defaulted
Mortgage Loans, whether through trustee's sale, foreclosure sale or otherwise
or amounts received in connection with any condemnation or partial release of
a Mortgaged Property and any other proceeds received in connection with an
REO Property, less the sum of related unreimbursed Servicing Fees and
Advances.
Loan-to-Value Ratio: With respect to any Mortgage Loan and any
date of determination, the fraction, expressed as a percentage, the numerator
of which is the outstanding principal balance of the related Mortgage Loan at
the date of determination and the denominator of which is the Appraised Value
of the related Mortgaged Property.
Lower-Tier Distribution Amount: As defined in Section 5.02(a).
Lower-Tier REMIC: As defined in the Preliminary Statement, the
assets of which consist of the Mortgage Loans, such amounts as shall from
time to time be held in the Certificate Account, the insurance policies, if
any, relating to a Mortgage Loan and property which secured a Mortgage Loan
and which has been acquired by foreclosure or deed in lieu of foreclosure.
MERS: As defined in Section 2.01(b)(iii).
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such
Mortgage Loan which, unless otherwise specified herein, shall give effect to
any related Debt Service Reduction and any Deficient Valuation that affects
the amount of the monthly payment due on such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on a Mortgaged Property securing a Mortgage Note or
creating a first lien on a leasehold interest.
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Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: As to any Mortgage Loan, the per annum
rate of interest at which interest accrues on the principal balance of such
Mortgage Loan in accordance with the terms of the related Mortgage Note.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated , 200 , between the , as seller, and the
Depositor, as purchaser.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time
to time amended by the Servicer to reflect the addition of Substitute
Mortgage Loans and the deletion of Defective Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Estate and from time to time subject to this Agreement, attached hereto as
Exhibit D, setting forth the following information with respect to each
Mortgage Loan: (i) the Mortgage Loan identifying number; (ii) a code
indicating whether the Mortgaged Property is owner-occupied; (iii) the
property type for each Mortgaged Property; (iv) the original months to
maturity or the remaining months to maturity from the Cut-Off Date; (v) the
Loan-to-Value Ratio at origination; (vi) the Mortgage Interest Rate; (vii)
the date on which the first Monthly Payment was due on the Mortgage Loan,
and, if such date is not the Due Date currently in effect, such Due Date;
(viii) the stated maturity date; (ix) the amount of the Monthly Payment as of
the Cut-Off Date; (x) the paid-through date; (xi) the original principal
amount of the Mortgage Loan; (xii) the principal balance of the Mortgage Loan
as of the close of business on the Cut-Off Date, after application of
payments of principal due on or before the Cut-Off Date, whether or not
collected, and after deduction of any payments collected of scheduled
principal due after the Cut-Off Date; (xiii) a code indicating the purpose of
the Mortgage Loan; (xiv) a code indicating the documentation style; and (xv)
the Appraised Value. With respect to the Mortgage Loans in the aggregate,
the Mortgage Loan Schedule shall set forth the following information, as of
the Cut-Off Date: (i) the number of Mortgage Loans; (ii) the current
aggregate outstanding principal balance of the Mortgage Loans; (iii) the
weighted average Mortgage Rate of the Mortgage Loans; and (iv) the weighted
average months to maturity of the Mortgage Loans.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 as from time to time are
held as a part of the Trust Estate (including any Substitute Mortgage Loans
and REO Property), the Mortgage Loans originally so held being identified in
the Mortgage Loan Schedule.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan, together with all riders thereto and amendments thereof.
Mortgaged Property: The underlying property securing a Mortgage
Loan, which may include Co-op Shares or residential long-term leases.
Mortgagor: The obligor on a Mortgage Note.
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Net Mortgage Interest Rate: As to any Mortgage Loan and
Distribution Date, such Mortgage Loan's Mortgage Interest Rate thereon on the
first day of the month preceding the month of the related Distribution Date
reduced by the Servicing Fee Rate and the Trustee Fee Rate.
Non-PO Percentage: As to any Discount Mortgage Loan, a fraction
(expressed as a percentage), the numerator of which is the Net Mortgage
Interest Rate of such Discount Mortgage Loan and the denominator of which is
%. As to any Mortgage Loan that is not a Discount Mortgage Loan,
100%.
Non-PO Principal Amount: As to any Distribution Date, the sum of
the applicable Non-PO Percentage of (a) the principal portion of each Monthly
Payment due on each Mortgage Loan on the related Due Date, (b) the Stated
Principal Balance, as of the date of repurchase, of each Mortgage Loan that
was repurchased by the Depositor pursuant to this Agreement as of such
Distribution Date, (c) any Substitution Adjustment Amount in connection with
a Defective Mortgage Loan received with respect to such Distribution Date,
(d) any Liquidation Proceeds allocable to recoveries of principal of Mortgage
Loans that are not yet Liquidated Mortgage Loans received during the calendar
month preceding the month of such Distribution Date, (e) with respect to each
Mortgage Loan that became a Liquidated Mortgage Loan during the calendar
month preceding the month of such Distribution Date, the amount of
Liquidation Proceeds allocable to principal received during the calendar
month preceding the month of such Distribution Date with respect to such
Mortgage Loan and (f) all Principal Prepayments received during the calendar
month preceding the month of such Distribution Date.
Non-Supported Interest Shortfalls: As to any Distribution Date,
the amount, if any, by which the aggregate of Prepayment Interest Shortfalls
exceeds Compensating Interest for such Distribution Date.
Non-U.S. Person: A Person other than a U.S. Person.
Nonrecoverable Advance: Any portion of an Advance previously
made or proposed to be made in respect of a Mortgage Loan which has not been
previously reimbursed and which, in the good faith judgment of the Servicer,
will not or, in the case of a proposed Advance, would not be ultimately
recoverable from the related Mortgagor, related Liquidation Proceeds, or
other recoveries in respect of the related Mortgage Loan.
Notional Amount: With respect to: (i) the Class A-5 Certificates
and any date of determination, the Class A-5 Notional Amount and (ii) the
Class A-WIO Certificates and any date of determination, the Class A-WIO
Notional Amount.
Offered Certificates: The Class A, Class B-1, Class B-2 and
Class B-3 Certificates.
Officer's Certificate: A certificate signed by the Chairman of
the Board, Vice Chairman of the Board, President or a Vice President and by
the Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries, or any other duly authorized officer of the Depositor or the
Servicer, as the case may be, and delivered to the Trustee.
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Opinion of Counsel: A written opinion of counsel acceptable to
the Trustee, who may be counsel for the Depositor or the Servicer, except
that any opinion of counsel relating to the qualification of the Trust Estate
as two separate REMICs or compliance with the REMIC Provisions must be an
opinion of Independent counsel.
Original Fractional Interest: With respect to each of the
following Classes of Subordinate Certificates, the corresponding percentage
described below, as of the Closing Date:
Class B-1 %
Class B-2 %
Class B-3 %
Class B-4 %
Class B-5 %
Class B-6 %
Original Subordinate Certificate Balance: $ .
OTS: The Office of Thrift Supervision.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
which was not the subject of a Principal Prepayment in Full prior to such Due
Date, which did not become a Liquidated Mortgage Loan prior to such Due Date
and which was not purchased from the Trust prior to such Due Date pursuant to
Sections 2.02 or 2.04.
Ownership Interest: As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: As to each Class of interest-bearing
Certificates, the per annum rate set forth in the Preliminary Statement.
Paying Agent: As defined in Section 9.13.
Percentage Interest: As to any Certificate, the percentage
obtained by dividing the initial Certificate Balance of such Certificate (or
the initial notional amount for a Class A-5 or Class A-WIO Certificate) by
the Initial Class Certificate Balance or Initial Notional Amount, as
applicable, of the Class of which such Certificate is a part.
Periodic Advance: The payment required to be made by the
Servicer with respect to any Distribution Date pursuant to Section 3.18, the
amount of any such payment being equal to the aggregate of Monthly Payments
(net of the Servicing Fee) on the Mortgage Loans (including any REO Property)
that were due on the related Due Date and not received as of the close of
business on the related Determination Date, less the aggregate amount of any
such delinquent payments that the Servicer has determined would constitute a
Nonrecoverable Advance if advanced.
Permitted Investments: One or more of the following:
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(i) obligations of or guaranteed as to principal and interest by the United
States, FHLMC, FNMA or any agency or instrumentality of the United
States when such obligations are backed by the full faith and credit of
the United States; provided that such obligations of FHLMC or FNMA
shall be limited to senior debt obligations and mortgage participation
certificates other than investments in mortgage-backed or mortgage
participation securities with yields evidencing extreme sensitivity to
the rate of principal payments on the underlying mortgages, which shall
not constitute Permitted Investments hereunder;
(ii) repurchase agreements on obligations specified in clause (i) maturing
not more than one month from the date of acquisition thereof with a
corporation incorporated under the laws of the United States or any
state thereof rated not lower than " " by and " " by
;
(iii) federal funds, certificates of deposit, demand deposits, time deposits
and bankers' acceptances (which shall each have an original maturity of
not more than 90 days and, in the case of bankers' acceptances, shall
in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States
dollars of any U.S. depository institution or trust company
incorporated under the laws of the United States or any state thereof,
rated not lower than " " by and " " by ;
(iv) commercial paper (having original maturities of not more than 365 days)
of any corporation incorporated under the laws of the United States or
any state thereof which is rated not lower than " " by and
" " by ;
(v) investments in money market funds (including funds of the Trustee or
its affiliates, or funds for which an affiliate of the Trustee acts as
advisor, as well as funds for which the Trustee and its affiliates may
receive compensation) rated either " " by and " " by
or otherwise approved in writing by each Rating Agency; and
(vi) other obligations or securities that are acceptable to each Rating
Agency and, as evidenced by an Opinion of Counsel obtained by the
Servicer, will not affect the qualification of the Trust Estate as two
separate REMICs;
provided, however, that no instrument shall be a Permitted Investment if it
represents either (a) the right to receive only interest payments with
respect to the underlying debt instrument or (b) the right to receive both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest with respect to such instrument
provide a yield to maturity greater than 120% of the yield to maturity at par
of such underlying obligations.
Permitted Transferee: Any Person other than (i) the United
States, or any State or any political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
international organization or any agency or instrumentality of either of the
foregoing, (iii) an organization which is exempt from tax imposed by Chapter
1 of the Code (including the tax imposed by Section 511 of the Code on
unrelated business taxable income) (except certain farmers' cooperatives
described in Code Section 521), (iv) rural electric and telephone
cooperatives described in Code Section 1381(a)(2)(C) and (v) any other Person
so designated by the Servicer based on an Opinion of Counsel to the effect
that any transfer to such Person may cause the Trust or any other Holder of a
Residual Certificate to incur tax liability that would not be imposed other
than on account of such transfer. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Code
Section 7701 or successor provisions.
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Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Physical Certificates: The Class A-R, Class A-LR, Class B-4,
Class B-5 and Class B-6 Certificates.
Plan: As defined in Section 6.02(e).
PO Percentage: As to any Discount Mortgage Loan, 100% minus the
Non-PO Percentage for such Mortgage Loan. As to any Mortgage Loan that is
not a Discount Mortgage Loan, 0%.
PO Principal Amount: As to any Distribution Date, the sum of the
applicable PO Percentage of (a) the principal portion of each Monthly Payment
due on each Mortgage Loan on the related Due Date, (b) the Stated Principal
Balance, as of the date of repurchase, of each Mortgage Loan that was
repurchased by the related Seller or the Depositor pursuant to this Agreement
as of such Distribution Date, (c) any Substitution Adjustment Amount in
connection with any Defective Mortgage Loan received with respect to such
Distribution Date, (d) any Liquidation Proceeds allocable to recoveries of
principal of Mortgage Loans that are not yet Liquidated Mortgage Loans
received during the calendar month preceding the month of such Distribution
Date, (e) with respect to each Mortgage Loan that became a Liquidated
Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal
received with respect to such Mortgage Loan during the calendar month
preceding the month of such Distribution Date with respect to such Mortgage
Loan and (f) all Principal Prepayments received during the calendar month
preceding the month of such Distribution Date.
Pool Distribution Amount: As to any Distribution Date, the
excess of (a) the sum of (i) the aggregate of (A) the interest portion of any
Monthly Payment (net of the Servicing Fee) and the principal portion of any
Monthly Payment due on the Due Date in the month in which such Distribution
Date occurs and which is received prior to the related Determination Date and
(B) all Periodic Advances and payments of Compensating Interest made by the
Servicer in respect of such Distribution Date deposited to the Servicer
Custodial Account pursuant to Section 3.08(b)(vii); (ii) all Liquidation
Proceeds received during the preceding calendar month and deposited to the
Servicer Custodial Account pursuant to Section 3.08(b)(iii); (iii) all
Principal Prepayments received during the month preceding the month of such
Distribution Date and deposited to the Servicer Custodial Account pursuant to
Section 3.08(b)(i) during such period; (iv) in connection with Defective
Mortgage Loans, as applicable, the aggregate of the Repurchase Prices and
Substitution Adjustment Amounts deposited on the related Remittance Date
pursuant to Section 3.08(b)(vi); and (v) any other amounts in the Servicer
Custodial Account deposited therein pursuant to Sections 3.08(b)(iv), (v) and
(viii) in respect of such Distribution Date; over (b) any (i) amounts
permitted to be withdrawn from the Servicer Custodial Account pursuant to
clauses (i) through (vii), inclusive, of Section 3.11(a) and (ii) amounts
permitted to be withdrawn from the Certificate Account pursuant to clauses
(i) and (ii) of Section 3.11(b).
-16-
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate Stated Principal Balances of all Mortgage Loans that were
Outstanding Mortgage Loans immediately following the Due Date in the month of
such Distribution Date.
Premium Mortgage Loan: Any Mortgage Loan with a Net Mortgage
Interest Rate that is equal to or more than % per annum.
Prepayment Interest Shortfall: As to any Distribution Date and
each Mortgage Loan subject to a Principal Prepayment received during the
calendar month preceding such Distribution Date, the amount, if any, by which
one month's interest at the related Mortgage Interest Rate (net of the
Servicing Fee) on such Principal Prepayment exceeds the amount of interest
paid in connection with such Principal Prepayment.
Primary Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan, in each case issued by an insurer acceptable to FNMA or FHLMC.
Principal-Only Certificates: Any Class of Certificates entitled
to distributions of principal, but to no distributions of interest. The
Class A-PO Certificates are the only Principal-Only Certificates.
Principal Prepayment: Any payment or other recovery of principal
on a Mortgage Loan (other than Liquidation Proceeds) which is received in
advance of its scheduled Due Date and is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the
entire principal balance of a Mortgage Loan.
Priority Amount: As to any Distribution Date, the lesser of (i)
the Class Certificate Balance of the Class A-6 Certificates and (ii) the
product of (a) the Shift Percentage, (b) the Priority Percentage and (c) the
Non-PO Principal Amount.
Priority Percentage: As to any Distribution Date, the percentage
equivalent (carried to six places rounded up) of a fraction the numerator of
which is the Class Certificate Balance of the Class A-6 Certificates
immediately prior to such date and the denominator of which is the aggregate
of the Class Certificate Balances of all Classes of Certificates (other than
the Class A-PO Certificates) immediately prior to such date.
Private Certificates: The Class B-4, Class B-5 and Class B-6
Certificates.
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Pro Rata Share: As to any Distribution Date and any Class of
Subordinate Certificates that is not a Restricted Class, the portion of the
Subordinate Principal Distribution Amount allocable to such Class, equal to
the product of the Subordinate Principal Distribution Amount for such
Distribution Date and a fraction, the numerator of which is the related Class
Certificate Balance thereof and the denominator of which is the aggregate
Class Certificate Balance of the Subordinate Certificates that are not
Restricted Classes. The Pro Rata Share of a Restricted Class shall be 0%.
Qualified Appraiser: An appraiser of a Mortgaged Property duly
appointed by the originator of the related Mortgage Loan, who had no
interest, direct or indirect, in such Mortgaged Property or in any loan made
on the security thereof, whose compensation is not affected by the approval
or disapproval of the related Mortgage Loan and who met the minimum
qualifications of FNMA or FHLMC.
Rate Determination Date: As to any Distribution Date and any
Class of LIBOR Certificates, the second LIBOR Business Day prior to the
beginning of the applicable Interest Accrual Period for such Class and such
Distribution Date.
Rating Agency: Each of and . If either such
organization or a successor is no longer in existence, "Rating Agency" shall
be such nationally recognized statistical rating organization, or other
comparable Person, as is designated by the Depositor, notice of which
designation shall be given to the Trustee. References herein to a given
rating or rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers.
Realized Loss: With respect to each Liquidated Mortgage Loan, an
amount as of the date of such liquidation, equal to (i) the unpaid principal
balance of the Liquidated Mortgage Loan as of the date of such liquidation,
plus (ii) interest at the Net Mortgage Interest Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the Due Date in the month in which Liquidation
Proceeds are required to be distributed on the Stated Principal Balance of
such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation
Proceeds, if any, received during the month in which such liquidation
occurred, to the extent applied as recoveries of interest at the Net Mortgage
Interest Rate and to principal of the Liquidated Mortgage Loan. With respect
to each Mortgage Loan that has become the subject of a Deficient Valuation,
if the principal amount due under the related Mortgage Note has been reduced,
the difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of
the Mortgage Loan as reduced by the Deficient Valuation. With respect to
each Mortgage Loan that has become the subject of a Debt Service Reduction
and any Distribution Date, the amount, if any, by which the principal portion
of the related Monthly Payment has been reduced.
Record Date: The last day of the month (or, if such day is not a
Business Day, the preceding Business Day) preceding the month of the related
Distribution Date.
Refinance Mortgage Loan: Any Mortgage Loan the proceeds of which
were not used to purchase the related Mortgaged Property.
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Regular Certificates: As defined in the Preliminary Statement
hereto.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have
been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(January 7, 2005)) or by the staff of the Commission, or as may be provided
by the Commission or its staff from time to time.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940,
as amended.
Relief Act Reduction: With respect to any Distribution Date, for
any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act or comparable state legislation,
the amount, if any, by which (i) interest collectible on such Mortgage Loan
for the most recently ended calendar month is less than (ii) interest accrued
pursuant to the terms of the Mortgage Note on the same principal amount and
for the same period as the interest collectible on such Mortgage Loan for the
most recently ended calendar month.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Certificate Maturity Date: The "latest possible maturity
date" of the Regular Certificates as that term is defined in Section 2.07.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be
in effect from time to time, as well as provisions of applicable state laws.
Remittance Date: As to any Distribution Date, by 2:00 p.m.
Eastern time on the second Business Day immediately preceding such
Distribution Date.
REO Disposition Period: As defined in Section 3.14.
REO Proceeds: Proceeds, net of any related expenses of the
Servicer, received in respect of any REO Property (including, without
limitation, proceeds from the rental of the related Mortgaged Property) which
are received prior to the final liquidation of such Mortgaged Property.
REO Property: A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Mortgage Loan.
Repurchase Price: As to any Defective Mortgage Loan repurchased
on any date pursuant to Sections 2.02 or 2.04, an amount equal to the sum of
(i) the unpaid principal balance thereof and (ii) the unpaid accrued interest
thereon at the applicable Mortgage Interest Rate from the Due Date to which
interest was last paid by the Mortgagor to the first day of the month
following the month in which such Mortgage Loan became eligible to be
repurchased.
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Request for Release: The Request for Release submitted by the
Servicer to the Trustee or the Custodian on behalf of the Trustee,
substantially in the form of Exhibit E.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy which is required to be maintained from time to time
under this Agreement in respect of such Mortgage Loan.
Reserve Interest Rate: As defined in Section 5.09.
Residual Certificates: The Class A-R and Class A-LR Certificates.
Responsible Officer: When used with respect to the Trustee, any
officer of the Corporate Trust Department of the Trustee, including any
Senior Vice President, any Vice President, any Assistant Vice President, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and having
responsibility for the administration of this Agreement.
Restricted Classes: As defined in Section 5.02(d).
Securitization Transaction: Any transaction involving a sale or
other transfer of mortgage loans directly or indirectly to an issuing entity
in connection with an issuance of publicly offered or privately placed, rated
or unrated mortgage-backed securities.
[S&P: Standard & Poor's, a Division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., and its successors in interest.]
Seller: , a , or its successor in interest, as seller
of the Mortgage Loans under the Mortgage Loan Purchase Agreement.
Senior Certificates: The Class A Certificates.
Senior Credit Support Depletion Date: The date on which the
aggregate Class Certificate Balance of the Subordinate Certificates is
reduced to zero.
Senior Percentage: With respect to any Distribution Date, the
percentage, carried six places rounded up, obtained by dividing the aggregate
Class Certificate Balance of the Senior Certificates (other than the Class
A-PO Certificates) immediately prior to such Distribution Date by the
aggregate Class Certificate Balance of all Classes of Certificates (other
than the Class A-PO Certificates) immediately prior to such Distribution Date.
Senior Prepayment Percentage: For any Distribution Date during
the five years beginning on the first Distribution Date, %. The Senior
Prepayment Percentage for any Distribution Date occurring on or after the
fifth anniversary of the first Distribution Date will, except as provided
herein, be as follows: for any Distribution Date in the first year
thereafter, the Senior Percentage plus % of the Subordinate Percentage
for such Distribution Date; for any Distribution Date in the second year
thereafter, the Senior Percentage plus % of the Subordinate Percentage
for such Distribution Date; for any Distribution Date in the third year
thereafter, the Senior Percentage plus % of the Subordinate Percentage
for such Distribution Date; for any Distribution Date in the fourth year
thereafter, the Senior Percentage plus % of the Subordinate Percentage
for such Distribution Date; and for any Distribution Date in the fifth or
later years thereafter, the Senior Percentage for such Distribution Date
(unless on any of the foregoing Distribution Dates the Senior Percentage
exceeds the initial Senior Percentage, in which case the Senior Prepayment
Percentage for such Distribution Date will once again equal 100%).
Notwithstanding the foregoing, no decrease in the Senior Prepayment
Percentage will occur unless both of the Senior Step Down Conditions are
satisfied.
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Senior Principal Distribution Amount: As to any Distribution
Date, the sum of (i) the Senior Percentage of the applicable Non-PO
Percentage of all amounts described in clauses (a) through (d) of the
definition of "Non-PO Principal Amount" for such Distribution Date and (ii)
the Senior Prepayment Percentage of the applicable Non-PO Percentage of the
amounts described in clauses (e) and (f) of the definition of "Non-PO
Principal Amount" for such Distribution Date.
Senior Step Down Conditions: As of any Distribution Date as to
which any decrease in the Senior Prepayment Percentage applies, (i) the
outstanding principal balance of all Mortgage Loans (including, for this
purpose, any Mortgage Loans in foreclosure or any REO Property) delinquent 60
days or more (averaged over the preceding six month period), as a percentage
of the aggregate Class Certificate Balance of the Subordinate Certificates
(averaged over the preceding six-month period), is not equal to or greater
than 50% or (ii) cumulative Realized Losses with respect to the Mortgage
Loans as of the applicable Distribution Date do not exceed the percentages of
the Original Subordinate Certificate Balance set forth below:
Percentage of
Original Subordinate
Distribution Date Occurring Certificate Balance
20 through 20 %
20 through 20 %
20 through 20 %
20 through 20 %
20 and thereafter %
Servicer: , a , or its successor in interest, in its
capacity as servicer of the Mortgage Loans, or any successor servicer
appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30 a.m.,
Eastern time, on the Business Day immediately preceding such Distribution
Date.
Servicer Custodial Account: The separate Eligible Account or
Accounts created and maintained by the Servicer pursuant to Section 3.08(b).
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Servicer's Certificate: The monthly report required by Section
4.01.
Servicing Advances: All customary, reasonable and necessary "out
of pocket" costs and expenses incurred in the performance by the Servicer of
its servicing obligations, including, but not limited to (i) the
preservation, restoration and protection of a Mortgaged Property, (ii)
expenses reimbursable to the Servicer pursuant to Section 3.14 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.12.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan and
Distribution Date, the amount of the fee payable to the Servicer, which
shall, for such Distribution Date, be equal to one-twelfth of the product of
the Servicing Fee Rate with respect to such Mortgage Loan and the Stated
Principal Balance of such Mortgage Loan, subject to reduction as provided in
Section 3.17. Such fee shall be payable monthly, computed on the basis of
the same Stated Principal Balance and period respecting which any related
interest payment on a Mortgage Loan is computed. The Servicer's right to
receive the Servicing Fee is limited to, and payable solely from, the
interest portion (including recoveries with respect to interest from
Liquidation Proceeds and other proceeds, to the extent permitted by Section
3.11) of related Monthly Payments collected by the Servicer, or as otherwise
provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate equal to (i) the related Mortgage Interest Rate less (ii) the sum
of % and the Trustee Fee Rate; provided, however, that the Servicing Fee
Rate will not be less than % per annum with respect to any Mortgage Loan.
Servicing File: The items pertaining to a particular Mortgage
Loan referred to in Exhibit J hereto, and any additional documents required
to be added to the Servicing File pursuant to the Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
Shift Percentage: As to any Distribution Date, the percentage
indicated below:
Distribution Date Occurring In Shift Percentage
20 through 20 ................ %
20 through 20 ................ %
20 through 20 ................ %
20 through 20 ................ %
20 through 20 ................ %
20 and thereafter..................... %
Similar Law: As defined in Section 6.02(e).
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Stated Principal Balance: As to any Mortgage Loan and date, the
unpaid principal balance of such Mortgage Loan as of the Due Date immediately
preceding such date as specified in the amortization schedule at the time
relating thereto (before any adjustment to such amortization schedule by
reason of any moratorium or similar waiver or grace period) after giving
effect to any previous partial Principal Prepayments and Liquidation Proceeds
allocable to principal (other than with respect to any Liquidated Mortgage
Loan) and to the payment of principal due on such Due Date and irrespective
of any delinquency in payment by the related Mortgagor, and after giving
effect to any Deficient Valuation.
Subordinate Certificates: The Class B Certificates.
Subordinate Percentage: As of any Distribution Date, 100% minus
the Senior Percentage for such Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date,
100% minus the Senior Prepayment Percentage for such Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the sum of (i) the Subordinate
Percentage of the applicable Non-PO Percentage of all amounts described in
clauses (a) through (d) of the definition of "Non-PO Principal Amount" for
such Distribution Date and (ii) the Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the amounts described in clauses (e) and (f)
of the definition of "Non-PO Principal Amount" for such Distribution Date.
Subservicer: Any Person with which the Servicer has entered into
a Subservicing Agreement and which satisfies the requirements set forth
therein.
Subservicing Agreement: Any subservicing agreement (which, in
the event the Subservicer is an affiliate of the Servicer, need not be in
writing) between the Servicer and any Subservicer relating to servicing
and/or administration of certain Mortgage Loans as provided in Section 3.02.
Substitute Mortgage Loan: A Mortgage Loan substituted for a
Defective Mortgage Loan which must, on the date of such substitution (i) have
a Stated Principal Balance, after deduction of the principal portion of the
Monthly Payment due in the month of substitution, not in excess of, and not
more than 10% less than, the Stated Principal Balance of the Defective
Mortgage Loan; (ii) have a Net Mortgage Interest Rate equal to that of the
Defective Mortgage Loan; (iii) have a Loan-to-Value Ratio not higher than
that of the Defective Mortgage Loan; (iv) have a remaining term to maturity
not greater than (and not more than one year less than) that of the Defective
Mortgage Loan; and (v) comply with each Mortgage Loan representation and
warranty set forth in the Sale Agreement relating to the Defective Mortgage
Loan. More than one Substitute Mortgage Loan may be substituted for a
Defective Mortgage Loan if such Substitute Mortgage Loans meet the foregoing
attributes in the aggregate.
Substitution Adjustment Amount: As defined in Section 2.02.
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Tax Matters Person: Any person designated as "tax matters
person" in accordance with Section 5.06 and the manner provided under
Treasury Regulation ss. 1.860F-4(d) and Treasury Regulation ss. 301.6231(a)(7)-1.
Telerate page 3750: As defined in Section 5.09.
Transaction Party: As defined in Section 11.02(a).
Treasury Regulations: The final and temporary regulations
promulgated under the Code by the U.S. Department of the Treasury.
Trust: The trust created by this Agreement.
Trust Estate: The corpus of the Trust created to the extent
described herein, consisting of the Mortgage Loans, such assets as shall from
time to time be identified as deposited in the Servicer Custodial Account or
the Certificate Account, in accordance with this Agreement, REO Property, the
Primary Insurance Policies and any other Required Insurance Policy.
Trustee: , and its successors-in-interest and, if a
successor trustee is appointed hereunder, such successor, as trustee.
Trustee Fee: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the aggregate Stated
Principal Balance of the Mortgage Loans immediately following the Due Date in
the month preceding the month in which such Distribution Date occurs.
Trustee Fee Rate: With respect to each Mortgage Loan, % per
annum.
Trustee Information: As specified in Section 11.05(a)(i)(A).
Uncertificated Lower-Tier Interest: A regular interest in the
Lower-Tier REMIC which is held as an asset of the Upper-Tier REMIC and is
entitled to monthly distributions as provided in Section 5.02(a) hereof. Any
of the Class A-L1, Class A-L3, Class A-L4, Class A-LPO, Class A-LUR, Class
A-LWIO, Class B-L1, Class B-L2, Class B-L3, Class B-L4, Class B-L5 and Class
B-L6 Interests are Uncertificated Lower-Tier Interests.
Underwriting Guidelines: The underwriting guidelines of .
Upper-Tier Certificate: Any one of the Class A Certificates
(other than the Class A-LR Certificate) and the Class B Certificates.
Upper-Tier Certificate Account: The separate Eligible Account
established and maintained by the Trustee pursuant to Section 3.08(f).
Upper-Tier REMIC: As defined in the Preliminary Statement, the
assets of which consist of the Uncertificated Lower-Tier Interests and such
amounts as shall from time to time be held in the Upper-Tier Certificate
Account.
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U.S. Person: A citizen or resident of the United States, a
corporation or partnership (unless, in the case of a partnership, Treasury
Regulations are adopted that provide otherwise) created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, including an entity treated as a corporation or partnership for
federal income tax purposes, an estate whose income is subject to United
States federal income tax regardless of its source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of such trust (or, to the
extent provided in applicable Treasury Regulations, certain trusts in
existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons).
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) % of all Voting Rights shall be allocated to the
Holders of the Residual Certificates, (b) % of all Voting Rights shall
be allocated to the Holders of the Class A-5 Certificates, (c) % of all
Voting Rights shall be allocated to the Holders of the Class A-WIO
Certificates and (d) the remaining Voting Rights shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
Section 1.02. Interest Calculations. All calculations of interest will
be made on a 360-day year consisting of twelve 30-day months. All dollar
amounts calculated hereunder shall be rounded to the nearest ▇▇▇▇▇ with
one-half of one ▇▇▇▇▇ being rounded down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to
the Trustee on behalf of the Trust for the benefit of the Certificateholders,
without recourse, all the right, title and interest of the Depositor in and
to the Mortgage Loans, including all interest and principal received on or
with respect to the Mortgage Loans (other than payments of principal and
interest due and payable on the Mortgage Loans on or before the Cut-Off
Date). The foregoing sale, transfer, assignment and set over does not and is
not intended to result in a creation of an assumption by the Trustee of any
obligation of the Depositor or any other Person in connection with the
Mortgage Loans or any agreement or instrument relating thereto, except as
specifically set forth herein.
(b) In connection with such transfer and assignment, the
Depositor has delivered or caused to be delivered to the Trustee, for the
benefit of the Certificateholders, the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed by manual or facsimile signature
in the following form: "Pay to the order of
, as Trustee, without recourse," with all
necessary intervening endorsements showing a complete chain of
endorsement from the originator to the Trustee (each such endorsement
being sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that
Mortgage Note);
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(ii) except as provided below, the original recorded Mortgage with evidence
of a recording thereon, or if any such Mortgage has not been returned
from the applicable recording office or has been lost, or if such
public recording office retains the original recorded Mortgage, a copy
of such Mortgage certified by the Depositor as being a true and correct
copy of the Mortgage;
(iii) subject to the provisos at the end of this paragraph, a duly executed
Assignment of Mortgage to " , as trustee for the
holders of the Wachovia Mortgage Loan Trust, ▇▇▇.▇▇▇ Mortgage
Pass-Through Certificates, Series 200 - Certificates" (which may be
included in a blanket assignment or assignments), together with, except
as provided below, originals of all interim recorded assignments of
such mortgage or a copy of such interim assignment certified by the
Depositor as being a true and complete copy of the original recorded
intervening assignments of Mortgage (each such assignment, when duly
and validly completed, to be in recordable form and sufficient to
effect the assignment of and transfer to the assignee thereof, under
the Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public
recording office, such Assignment of Mortgage may exclude the
information to be provided by the recording office; and provided,
further, if the related Mortgage has been recorded in the name of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its
designee, no Assignment of Mortgage in favor of the Trustee will be
required to be prepared or delivered and instead, the Servicer shall
take all actions as are necessary to cause the Trust to be shown as the
owner of the related Mortgage Loan on the records of MERS for purposes
of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon, if
any;
(v) the original or duplicate original mortgagee title insurance policy and
all riders thereto;
(vi) the original of any guarantee executed in connection with the Mortgage
Note;
(vii) for each Mortgage Loan, if any, which is secured by a residential
long-term lease, a copy of the lease with evidence of recording
indicated thereon, or, if the lease is in the process of being
recorded, a photocopy of the lease, certified by an officer of the
respective prior owner of such Mortgage Loan or by the applicable title
insurance company, closing/settlement/escrow agent or company or
closing attorney to be a true and correct copy of the lease transmitted
for recordation;
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(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage; and
(ix) for each Mortgage Loan secured by Co-op Shares, the originals of the
following documents or instruments:
(A) The stock certificate;
(B) The stock power executed in blank;
(C) The executed proprietary lease;
(D) The executed recognition agreement;
(E) The executed assignment of recognition agreement, if any;
(F) The executed UCC-1 financing statement with evidence of recording
thereon; and
(G) Executed UCC-3 financing statements or other appropriate UCC financing
statements required by state law, evidencing a complete and
unbroken line from the mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable for recordation).
provided, however, that on the Closing Date, with respect to item (iii), the
Depositor has delivered to the Trustee a copy of such Assignment of Mortgage
in blank and has caused the Servicer to retain the completed Assignment of
Mortgage for recording as described below, unless such Mortgage has been
recorded in the name of MERS or its designee. In addition, if the Depositor
is unable to deliver or cause the delivery of any original Mortgage Note due
to the loss of such original Mortgage Note, the Depositor may deliver a copy
of such Mortgage Note, together with a lost note affidavit, and shall thereby
be deemed to have satisfied the document delivery requirements of this
Section 2.01(b). As set forth on Exhibit L attached hereto is a list of all
states where recordation is required by either Rating Agency to obtain the
initial ratings of the Certificates. The Trustee may rely and shall be
protected in relying upon the information contained in such Exhibit L.
If in connection with any Mortgage Loans, the Depositor cannot
deliver (A) the Mortgage, (B) all interim recorded assignments, (C) all
assumption, modification, consolidation or extension agreements, if any, or
(D) the lender's title policy (together with all riders thereto) satisfying
the requirements of clause (ii), (iii), (iv) or (v) above, respectively,
concurrently with the execution and delivery hereof because such document or
documents have not been returned from the applicable public recording office
in the case of clause (ii), (iii) or (iv) above, or because the title policy
has not been delivered to either the Servicer or the Depositor by the
applicable title insurer in the case of clause (v) above, the Depositor shall
promptly deliver or cause to be delivered to the Trustee or the Custodian on
behalf of the Trustee, in the case of clause (ii), (iii) or (iv) above, such
Mortgage, such interim assignment or such assumption, modification,
consolidation or extension agreement, as the case may be, with evidence of
recording indicated thereon upon receipt thereof from the public recording
office, but in no event shall any such delivery of any such documents or
instruments be made later than one year following the Closing Date, unless,
in the case of clause (ii), (iii) or (iv) above, there has been a continuing
delay at the applicable recording office or, in the case of clause (v), there
has been a continuing delay at the applicable insurer and the Depositor has
delivered the Officer's Certificate to such effect to the Trustee. The
Depositor shall forward or cause to be forwarded to the Trustee (1) from time
to time additional original documents evidencing an assumption or
modification of a Mortgage Loan and (2) any other documents required to be
delivered by the Depositor or the Servicer to the Trustee or the Custodian on
the Trustee's behalf. In the event that the original Mortgage is not
delivered and in connection with the payment in full of the related Mortgage
Loan the public recording office requires the presentation of a "lost
instruments affidavit and indemnity" or any equivalent document, because only
a copy of the Mortgage can be delivered with the instrument of satisfaction
or reconveyance, the Servicer shall prepare, execute and deliver or cause to
be prepared, executed and delivered, on behalf of the Trust, such a document
to the public recording office.
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As promptly as practicable subsequent to such transfer and
assignment, and in any event, within 30 days thereafter, the Servicer shall
(except for any Mortgage which has been recorded in the name of MERS or its
designee) (I) cause each Assignment of Mortgage to be in proper form for
recording in the appropriate public office for real property records within
30 days of the Closing Date and (II) at the Depositor's expense, cause to be
delivered for recording in the appropriate public office for real property
records the Assignments of the Mortgages to the Trustee, except that, with
respect to any Assignment of a Mortgage as to which the Servicer has not
received the information required to prepare such assignment in recordable
form, the Servicer's obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information
and in any event within 30 days after the receipt thereof and, no recording
of an Assignment of Mortgage will be required in a state if either (i) the
Depositor furnishes to the Trustee an unqualified Opinion of Counsel
reasonably acceptable to the Trustee to the effect that recordation of such
assignment is not necessary under applicable state law to preserve the
Trustee's interest in the related Mortgage Loan against the claim of any
subsequent transferee of such Mortgage Loan or any successor to, or creditor
of, the Depositor or the originator of such Mortgage Loan or (ii) the
recordation of an Assignment of Mortgage in such state is not required by
either Rating Agency in order to obtain the initial ratings on the
Certificates on the Closing Date.
In the case of Mortgage Loans that have been prepaid in full as
of the Closing Date, the Depositor, in lieu of delivering the above documents
to the Trustee, or the Custodian on the Trustee's behalf, will cause the
Servicer to deposit in the Servicer Custodial Account the portion of such
payment that is required to be deposited in the Servicer Custodial Account
pursuant to Section 3.08.
Section 2.02. Acceptance by the Trustee of the Mortgage Loans. Subject
to the provisions of the following paragraph, the Trustee declares that it,
or the Custodian as its agent, will hold the documents referred to in Section
2.01 and the other documents delivered to it constituting the Mortgage Files,
and that it will hold such other assets as are included in the Trust Estate,
in trust for the exclusive use and benefit of all present and future
Certificateholders.
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Within 90 days after the execution and delivery of this
Agreement, the Trustee shall review, or cause the Custodian to review, the
Mortgage Files in its possession. If, in the course of such review, the
Trustee or the Custodian finds any document constituting a part of a Mortgage
File which does not meet the requirements of Section 2.01 or is omitted from
such Mortgage File, the Trustee shall promptly so notify the Servicer and the
Depositor, or shall cause the Custodian to promptly so notify the Servicer
and the Depositor. In performing any such review, the Trustee or the
Custodian may conclusively rely on the purported genuineness of any such
document and any signature thereon. It is understood that the scope of the
Trustee's or the Custodian's review of the Mortgage Files is limited solely
to confirming that the documents listed in Section 2.01 have been received
and further confirming that any and all documents delivered pursuant to
Section 2.01 appear on their face to have been executed and relate to the
Mortgage Loans identified in the Mortgage Loan Schedule. Neither the Trustee
nor the Custodian shall have any responsibility for determining whether any
document is valid and binding, whether the text of any assignment or
endorsement is in proper or recordable form, whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction,
or whether a blanket assignment is permitted in any applicable jurisdiction.
The Depositor hereby covenants and agrees that it will promptly correct or
cure such defect within 90 days from the date it was so notified of such
defect and, if the Depositor does not correct or cure such defect within such
period, the Depositor will either (a) substitute for the related Mortgage
Loan a Substitute Mortgage Loan, which substitution shall be accomplished in
the manner and subject to the conditions set forth below or (b) purchase such
Mortgage Loan from the Trustee at the Repurchase Price for such Mortgage
Loan; provided, however, that in no event shall such a substitution occur
more than two years from the Closing Date; provided, further, that such
substitution or repurchase shall occur within 90 days of when such defect was
discovered if such defect will cause the Mortgage Loan not to be a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code.
With respect to each Substitute Mortgage Loan the Depositor shall
deliver to the Trustee, for the benefit of the Certificateholders, the
Mortgage Note, the Mortgage, the related Assignment of Mortgage (except for
any Mortgage which has been recorded in the name of MERS or its designee),
and such other documents and agreements as are otherwise required by
Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by Section 2.01. No substitution is permitted to be made in any
calendar month after the Determination Date for such month. Monthly Payments
due with respect to any such Substitute Mortgage Loan in the month of
substitution shall not be part of the Trust Estate and will be retained by
the Depositor. For the month of substitution, distributions to
Certificateholders will include the Monthly Payment due for such month on any
Defective Mortgage Loan for which the Depositor has substituted a Substitute
Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of each Mortgage
Loan that has become a Defective Mortgage Loan and the substitution of the
Substitute Mortgage Loan or Loans and the Servicer shall deliver the amended
Mortgage Loan Schedule to the Trustee and the Custodian. Upon such
substitution, each Substitute Mortgage Loan shall be subject to the terms of
this Agreement in all respects, and the Depositor shall be deemed to have
made to the Trustee with respect to such Substitute Mortgage Loan, as of the
date of substitution, the representations and warranties made pursuant to
Section 2.04. Upon any such substitution and the deposit to the Servicer
Custodial Account of any required Substitution Adjustment Amount (as
described in the next paragraph) and receipt of a Request for Release, the
Trustee shall release, or shall direct the Custodian to release, the Mortgage
File relating to such Defective Mortgage Loan to the Depositor and shall
execute and deliver at the Depositor's direction such instruments of transfer
or assignment prepared by the Depositor, in each case without recourse, as
shall be necessary to vest title in the Depositor, or its designee, to the
Trustee's interest in any Defective Mortgage Loan substituted for pursuant to
this Section 2.02.
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For any month in which the Depositor substitutes one or more
Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
amount (if any) by which the aggregate principal balance of all such
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Defective Mortgage Loans
(after application of the principal portion of the Monthly Payments due in
the month of substitution) (the "Substitution Adjustment Amount") plus an
amount equal to the aggregate of any unreimbursed Advances with respect to
such Defective Mortgage Loans shall be deposited into the Certificate Account
by the Depositor on or before the Remittance Date for the Distribution Date
in the month succeeding the calendar month during which the related Mortgage
Loan is required to be purchased or replaced hereunder.
The Trustee shall retain or shall cause the Custodian to retain
possession and custody of each Mortgage File in accordance with and subject
to the terms and conditions set forth herein. The Servicer shall promptly
deliver to the Trustee, upon the execution or, in the case of documents
requiring recording, receipt thereof, the originals of such other documents
or instruments constituting the Mortgage File as come into the Servicer's
possession from time to time.
It is understood and agreed that the obligation of the Depositor
to substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee and any Certificateholder against the
Depositor.
The Trustee or the Custodian, on behalf of the Trustee, shall be
under no duty or obligation (i) to inspect, review or examine any such
documents, instruments, certificates or other papers to determine that they
are genuine, enforceable, or appropriate for the represented purpose or that
they are other than what they purport to be on their face or (ii) to
determine whether any Mortgage File should include any of the documents
specified in Section 2.01(b)(iv), (vi), (vii) and (viii).
Section 2.03. Representations, Warranties and Covenants of the Servicer.
The Servicer hereby makes the following representations and
warranties to the Depositor and the Trustee, as of the Closing Date:
(i) The Servicer is a national banking association duly organized, validly
existing, and in good standing under the federal laws of the United
States of America and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and in good
standing in each of the states where a Mortgaged Property is located if
the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Servicer. The Servicer
has power and authority to execute and deliver this Agreement and to
perform in accordance herewith; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized. This Agreement, assuming due authorization,
execution and delivery by the other parties hereto, evidences the
valid, binding and enforceable obligation of the Servicer, subject to
applicable law except as enforceability may be limited by (A)
bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the
rights of creditors and (B) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All
requisite corporate action has been taken by the Servicer to make this
Agreement valid and binding upon the Servicer in accordance with its
terms.
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(ii) No consent, approval, authorization or order is required for the
transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory authority
having jurisdiction over the Servicer is required or, if required, such
consent, approval, authorization or order has been or will, prior to
the Closing Date, be obtained.
(iii) The consummation of the transactions contemplated by this Agreement are
in the ordinary course of business of the Servicer and will not result
in the breach of any term or provision of the charter or by-laws of the
Servicer or result in the breach of any term or provision of, or
conflict with or constitute a default under or result in the
acceleration of any obligation under, any agreement, indenture or loan
or credit agreement or other instrument to which the Servicer or its
property is subject, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Servicer or its
property is subject.
(iv) There is no action, suit, proceeding or investigation pending or, to
the best knowledge of the Servicer, threatened against the Servicer
which, either individually or in the aggregate, would result in any
material adverse change in the business, operations, financial
condition, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted or which would draw into
question the validity of this Agreement or the Mortgage Loans or of any
action taken or to be taken in connection with the obligations of the
Servicer contemplated herein, or which would materially impair the
ability of the Servicer to perform under the terms of this Agreement.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Mortgage Files to the Trustee
for the benefit of the Certificateholders.
Section 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans.
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The Depositor hereby represents and warrants to the Trustee with
respect to the Mortgage Loans or each Mortgage Loan, as the case may be, as
of the date hereof or such other date set forth herein that as of the Closing
Date:
(i) The information set forth in the Mortgage Loan Schedule is true and
correct in all material respects.
(ii) There are no delinquent taxes, ground rents, governmental assessments,
insurance premiums, leasehold payments, including assessments payable
in future installments or other outstanding charges affecting the lien
priority of the related Mortgaged Property.
(iii) The terms of the Mortgage Note and the Mortgage have not been impaired,
waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage, and which have
been delivered to the Trustee; the substance of any such waiver,
alteration or modification has been approved by the insurer under the
Primary Insurance Policy, if any, the title insurer, to the extent
required by the related policy, and is reflected on the Mortgage Loan
Schedule. No instrument of waiver, alteration or modification has been
executed, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the
insurer under the Primary Insurance Policy, if any, the title insurer,
to the extent required by the policy, and which assumption agreement
has been delivered to the Trustee.
(iv) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
and the Mortgage, or the exercise of any right thereunder, render
either the Mortgage Note or the Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(v) All buildings upon the Mortgaged Property are insured by an insurer
generally acceptable to prudent mortgage lending institutions against
loss by fire, hazards of extended coverage and such other hazards as
are customary in the area the Mortgaged Property is located, pursuant
to insurance policies conforming to the requirements of Customary
Servicing Procedures and this Agreement. All such insurance policies
contain a standard mortgagee clause naming the originator of the
Mortgage Loan, its successors and assigns as mortgagee and all premiums
thereon have been paid. If the Mortgaged Property is in an area
identified on a flood hazard map or flood insurance rate map issued by
the Federal Emergency Management Agency as having special flood hazards
(and such flood insurance has been made available), a flood insurance
policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to
the requirements of FNMA or FHLMC. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to maintain such insurance at Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor.
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(vi) Any and all requirements of any federal, state or local law including,
without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protections, equal credit opportunity or
disclosure laws applicable to the origination and servicing of Mortgage
Loan have been complied with.
(vii) The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part (other than as to Principal Prepayments
in full which may have been received prior to the Closing Date), and
the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such satisfaction, cancellation, subordination,
rescission or release.
(viii) The Mortgage is a valid, existing and enforceable first lien on
the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (A) the lien of current real property taxes
and assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of the public
record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's
title insurance policy delivered to the originator of the Mortgage Loan
and which do not adversely affect the Appraised Value of the Mortgaged
Property, (C) if the Mortgaged Property consists of Co-op Shares, any
lien for amounts due to the cooperative housing corporation for unpaid
assessments or charges or any lien of any assignment of rents or
maintenance expenses secured by the real property owned by the
cooperative housing corporation, and (D) other matters to which like
properties are commonly subject which do not materially interfere with
the benefits of the security intended to be provided by the Mortgage or
the use, enjoyment, value or marketability of the related Mortgaged
Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, existing and enforceable first lien
and first priority security interest on the property described therein
and the Depositor has the full right to sell and assign the same to the
Trustee.
(ix) The Mortgage Note and the related Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable
in accordance with its terms except as enforceability may be limited by
(A) bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the
rights of creditors and (B) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law.
(x) All parties to the Mortgage Note and the Mortgage had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties.
(xi) The proceeds of the Mortgage Loan have been fully disbursed to or for
the account of the Mortgagor and there is no obligation for the
Mortgagee to advance additional funds thereunder and any and all
requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied
with. All costs fees and expenses incurred in making or closing the
Mortgage Loan and the recording of the Mortgage have been paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due to
the Mortgagee pursuant to the Mortgage Note or Mortgage.
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(xii) To the best of the Depositor's knowledge, all parties which have had
any interest in the Mortgage Loan, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and
disposed of such interest, were) in compliance with any and all
applicable "doing business" and licensing requirements of the laws of
the state wherein the Mortgaged Property is located.
(xiii) The Mortgage Loan is covered by an ALTA lender's title insurance
policy, acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to FNMA or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring (subject
to the exceptions contained in (viii)(A) and (B) above) the Seller, its
successors and assigns as to the first priority lien of the Mortgage in
the original principal amount of the Mortgage Loan. The Depositor is
the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be
in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and the Depositor has not done, by act
or omission, anything which would impair the coverage of such lender's
title insurance policy.
(xiv) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event
of acceleration, and the Seller has not waived any default, breach,
violation or event of acceleration.
(xv) As of the date of origination of the Mortgage Loan, there had been no
mechanics' or similar liens or claims filed for work, labor or material
(and no rights are outstanding that under law could give rise to such
lien) affecting the relating Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the related
Mortgage.
(xvi) All improvements which were considered in determining the Appraised
Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property.
(xvii) The Mortgage Loan was originated by a commercial bank or similar
banking institution which is supervised and examined by a federal or
state authority, or by a mortgagee approved by the Secretary of HUD.
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(xviii) Principal payments on the Mortgage Loan commenced no more than
sixty days after the proceeds of the Mortgaged Loan were disbursed.
The Mortgage Loans are 30-year fixed rate mortgage loans having an
original term to maturity of not more than 30 years, with interest
payable in arrears on the first day of the month. Each Mortgage Note
requires a monthly payment which is sufficient to fully amortize the
original principal balance over the original term thereof and to pay
interest at the related Mortgage Interest Rate. The Mortgage Note does
not permit negative amortization.
(xix) There is no proceeding pending or, to the Depositor's knowledge,
threatened for the total or partial condemnation of the Mortgaged
Property and such property is in good repair and is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises
were intended.
(xx) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including
(A) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (B) otherwise by judicial foreclosure. To the best
of the Depositor's knowledge, following the date of origination of the
Mortgage Loan, the Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has
not filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption or right available to the Mortgagor or any
other person which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage.
(xxi) The Mortgage Note and Mortgage are on forms acceptable to FNMA or FHLMC.
(xxii) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the
Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in (viii) above.
(xxiii) The Mortgage File contains an appraisal of the related Mortgaged
Property, in a form acceptable to FNMA or FHLMC and such appraisal
complies with the requirements of FIRREA, and was made and signed,
prior to the approval of the Mortgage Loan application, by a Qualified
Appraiser.
(xxiv) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves, and no fees or expenses are or will
become payable by the Trustee to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
Mortgagor.
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(xxv) No Mortgage Loan is a graduated payment mortgage loan, no Mortgage Loan
has a shared appreciation or other contingent interest feature, and no
Mortgage Loan contains any "buydown" provision.
(xxvi) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of mortgage loans of the same
type as the Mortgage Loan and rescission materials required by
applicable law if the Mortgage Loan is a Refinance Mortgage Loan.
(xxvii) Each Mortgage Loan with a Loan-to-Value Ratio at origination in
excess of 80% will be subject to a Primary Insurance Policy, issued by
an insurer acceptable to FNMA or FHLMC, which insures that portion of
the Mortgage Loan in excess of the portion of the Appraised Value of
the Mortgaged Property required by FNMA. All provisions of such
Primary Insurance Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder
have been paid. Any Mortgage subject to any such Primary Insurance
Policy obligates the Mortgagor thereunder to maintain such insurance
and to pay all premiums and charges in connection therewith at least
until Loan-to-Value Ratio of such Mortgage Loan is reduced to less than
80%. The Mortgage Interest Rate for the Mortgage Loan does not include
any such insurance premium.
(xxviii) To the best of the Depositor's knowledge as of the date of
origination of the Mortgage Loan, (A) the Mortgaged Property is
lawfully occupied under applicable law, (B) all inspections, licenses
and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the
appropriate authorities and (C) no improvement located on or part of
the Mortgaged Property is in violation of any zoning law or regulation.
(xxix) The Assignment of Mortgage (except with respect to any Mortgage
that has been recorded in the name of MERS or its designee) is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(xxx) All payments required to be made prior to the Cut-Off Date for such
Mortgage Loan under the terms of the Mortgage Note have been made and
no Mortgage Loan has been more than 30 days delinquent more than once
in the twelve month period immediately prior to the Cut-Off Date.
(xxxi) With respect to each Mortgage Loan, the Depositor or Servicer is
in possession of a complete Mortgage File except for the documents
which have been delivered to the Trustee or which have been submitted
for recording and not yet returned.
(xxxii) Immediately prior to the transfer and assignment contemplated
herein, the Depositor was the sole owner and holder of the Mortgage
Loans. The Mortgage Loans were not assigned or pledged by the
Depositor and the Depositor had good and marketable title thereto, and
the Depositor had full right to transfer and sell the Mortgage Loans to
the Trustee free and clear of any encumbrance, participation interest,
lien, equity, pledge, claim or security interest and had full right and
authority subject to no interest or participation in, or agreement with
any other party to sell or otherwise transfer the Mortgage Loans.
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(xxxiii) Any future advances made prior to the Cut-Off Date have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly
insured as having first lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to FNMA and FHLMC. The
consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan.
(xxxiv) The Mortgage Loan was underwritten in accordance with the
applicable Underwriting Guidelines in effect at the time of origination
with exceptions thereto exercised in a reasonable manner.
(xxxv) If the Mortgage Loan is secured by a long-term residential lease,
(1) the lessor under the lease holds a fee simple interest in the land;
(2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's
consent and the acquisition by the holder of the Mortgage of the rights
of the lessee upon foreclosure or assignment in lieu of foreclosure or
provide the holder of the Mortgage with substantially similar
protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity
to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence,
(c) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or
policies relating to the Mortgaged Property or (d) permit any increase
in the rent other than pre-established increases set forth in the
lease; (4) the original term of such lease in not less than 15 years;
(5) the term of such lease does not terminate earlier than five years
after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold
estates in transferring ownership in residential properties is a widely
accepted practice.
(xxxvi) The Mortgaged Property is located in the state identified in the
Mortgage Loan Schedule and consists of a parcel of real property with a
detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit, or an
individual unit in a planned unit development, or, in the case of
Mortgage Loans secured by Co-op Shares, leases or occupancy agreements;
provided, however, that any condominium project or planned unit
development generally conforms with the applicable Underwriting
Guidelines regarding such dwellings, and no residence or dwelling is a
mobile home or a manufactured dwelling.
(xxxvii) The Depositor used no adverse selection procedures in selecting
the Mortgage Loan for inclusion in the Trust Estate.
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(xxxviii) Each Mortgage Loan is a "qualified mortgage" within
Section 860G(a)(3) of the Code.
(xxxix) With respect to each Mortgage where a lost note affidavit has
been delivered to the Trustee in place of the related Mortgage Note,
the related Mortgage Note is no longer in existence.
Notwithstanding the foregoing, no representations or warranties
are made by the Depositor as to the environmental condition of any Mortgaged
Property; the absence, presence or effect of hazardous wastes or hazardous
substances on any Mortgaged Property; any casualty resulting from the
presence or effect of hazardous wastes or hazardous substances on, near or
emanating from any Mortgaged Property; the impact on Certificateholders of
any environmental condition or presence of any hazardous substance on or near
any Mortgaged Property; or the compliance of any Mortgaged Property with any
environmental laws, nor is any agent, Person or entity otherwise affiliated
with the Depositor authorized or able to make any such representation,
warranty or assumption of liability relative to any Mortgaged Property. In
addition, no representations or warranties are made by the Depositor with
respect to the absence or effect of fraud in the origination of any Mortgage
Loan.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
respective Mortgage Files to the Trustee or the Custodian and shall inure to
the benefit of the Trustee, notwithstanding any restrictive or qualified
endorsement or assignment.
Upon discovery by either the Depositor, the Servicer, the Trustee
or the Custodian that any of the representations and warranties set forth in
this Section 2.04 is not accurate (referred to herein as a "breach") and that
such breach materially and adversely affects the interests of the
Certificateholders in the related Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties (any Custodian
being so obligated under a Custodial Agreement); provided that any such
breach that causes the Mortgage Loan not to be a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code shall be deemed to materially
and adversely affect the interests of the Certificateholders. Within 90 days
of its discovery or its receipt of notice of any such breach, the Depositor
shall cure such breach in all material respects or shall either (i)
repurchase the Mortgage Loan or any property acquired in respect thereof from
the Trustee at a price equal to the Repurchase Price or (ii) if within two
years of the Closing Date, substitute for such Mortgage Loan in the manner
described in Section 2.02; provided that if the breach would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such repurchase or substitution must occur within
90 days from the date the breach was discovered. The Repurchase Price of any
repurchase described in this paragraph and the Substitution Adjustment
Amount, if any, shall be deposited in the Certificate Account. It is
understood and agreed that the obligation of the Depositor to repurchase or
substitute for any Mortgage Loan or Mortgaged Property as to which such a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to Certificateholders, or to the Trustee on
behalf of Certificateholders, and such obligation shall survive until
termination of the Trust hereunder.
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Section 2.05. Designation of Interests in the REMIC. The Depositor
hereby designates the Classes of Class A Certificates (other than the Class
A-R and Class A-LR Certificates) and the Classes of Class B Certificates as
classes of "regular interests" and the Class A-R Certificate as the single
class of "residual interest" in the Upper-Tier REMIC for the purposes of Code
Sections 860G(a)(1) and 860G(a)(2), respectively. The Depositor hereby
further designates the Class A-L1 Interest, Class A-L3 Interest, Class A-L4
Interest, Class A-LPO Interest, Class A-LUR Interest, Class A-LWIO Interest,
Class B-L1 Interest, Class B-L2 Interest, Class B-L3 Interest, Class B-L4
Interest, Class B-L5 Interest and Class B-L6 Interest as classes of "regular
interests" and the Class A-LR Certificate as the single class of "residual
interest" in the Lower-Tier REMIC for the purposes of Code Sections
860G(a)(1) and 860G(a)(2), respectively.
Section 2.06. Designation of Start-up Day. The Closing Date is hereby
designated as the "start-up day" of each of the Upper-Tier REMIC and
Lower-Tier REMIC within the meaning of Section 860G(a)(9) of the Code.
Section 2.07. REMIC Certificate Maturity Date. Solely for purposes of
satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the
"latest possible maturity date" of the regular interests in the Upper-Tier
REMIC and Lower-Tier REMIC is [______], 20 .
Section 2.08. Execution and Delivery of Certificates. The Trustee (i)
acknowledges the issuance of and hereby declares that it holds the
Uncertificated Lower-Tier Interests on behalf of the Upper-Tier REMIC and the
Certificateholders and (ii) has executed and delivered to or upon the order
of the Depositor, in exchange for the Mortgage Loans and Uncertificated
Lower-Tier Interests together with all other assets included in the
definition of "Trust Estate," receipt of which is hereby acknowledged,
Certificates in authorized denominations which, together with the
Uncertificated Lower-Tier Interests, evidence ownership of the entire Trust
Estate.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. Servicer to Service Mortgage Loans. For and on behalf of
the Certificateholders, the Servicer shall service and administer the
Mortgage Loans, all in accordance with the terms of this Agreement, Customary
Servicing Procedures, applicable law and the terms of the Mortgage Notes and
Mortgages. In connection with such servicing and administration, the
Servicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 3.02, to do or cause to be done any and
all things that it may deem necessary or desirable in connection with such
servicing and administration including, but not limited to, the power and
authority, subject to the terms hereof, (a) to execute and deliver, on behalf
of the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (b) to consent, with respect to the Mortgage
Loans it services, to transfers of any Mortgaged Property and assumptions of
the Mortgage Notes and related Mortgages (but only in the manner provided in
this Agreement), (c) to collect any Insurance Proceeds and other Liquidation
Proceeds relating to the Mortgage Loans it services, and (d) to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Mortgage Loan it services. The Servicer shall represent and
protect the interests of the Trust in the same manner as it protects its own
interests in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a Mortgage Loan and shall not make or permit any
modification, waiver or amendment of any term of any Mortgage Loan, except as
provided pursuant to Section 3.19. Without limiting the generality of the
foregoing, the Servicer, in its own name or in the name of any Subservicer or
the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Servicer or any Subservicer, as the case
may be, believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments,
with respect to the Mortgage Loans it services, and with respect to the
related Mortgaged Properties held for the benefit of the Certificateholders.
The Servicer shall prepare and deliver to the Depositor and/or the Trustee
such documents requiring execution and delivery by either or both of them as
are necessary or appropriate to enable the Servicer to service and administer
the Mortgage Loans it services to the extent that the Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee,
upon the direction of the Servicer, shall promptly execute such documents and
deliver them to the Servicer.
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In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Mortgage Loans it services, which Servicing
Advances shall be reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in
Section 3.11. The costs incurred by the Servicer, if any, in effecting the
timely payments of taxes and assessments on the Mortgaged Properties and
related insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balances of the related Mortgage Loans, notwithstanding that the terms of
such Mortgage Loans so permit.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Agreement) to the Trustee under this
Agreement is intended by the parties to be that of an independent contractor
and not that of a joint venturer, partner or agent.
Section 3.02. Subservicing; Enforcement of the Obligations of Servicer.
(a) The Servicer may arrange for the subservicing of any
Mortgage Loan it services by a Subservicer pursuant to a Subservicing
Agreement; provided, however, that such subservicing arrangement and the
terms of the related Subservicing Agreement must provide for the servicing of
such Mortgage Loan in a manner consistent with the servicing arrangements
contemplated hereunder. Notwithstanding the provisions of any Subservicing
Agreement, any of the provisions of this Agreement relating to agreements or
arrangements between the Servicer and a Subservicer or reference to actions
taken through a Subservicer or otherwise, the Servicer shall remain obligated
and liable to the Depositor, the Trustee and the Certificateholders for the
servicing and administration of the Mortgage Loans it services in accordance
with the provisions of this Agreement without diminution of such obligation
or liability by virtue of such Subservicing Agreements or arrangements or by
virtue of indemnification from the Subservicer and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing
and administering those Mortgage Loans. All actions of each Subservicer
performed pursuant to the related Subservicing Agreement shall be performed
as agent of the Servicer with the same force and effect as if performed
directly by the Servicer.
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(b) For purposes of this Agreement, the Servicer shall be
deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans it services that are received by a Subservicer
regardless of whether such payments are remitted by the Subservicer to the
Servicer.
(c) As part of its servicing activities hereunder, the
Servicer, for the benefit of the Trustee and the Certificateholders, shall
use its best reasonable efforts to enforce the obligations of each
Subservicer engaged by the Servicer under the related Subservicing Agreement,
to the extent that the non-performance of any such obligation would have a
material and adverse effect on a Mortgage Loan. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of
Subservicing Agreements and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the
owner of the related Mortgage Loans. The Servicer shall pay the costs of
such enforcement at its own expense, and shall be reimbursed therefor only
(i) from a general recovery resulting from such enforcement to the extent, if
any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys fees against the party against whom such enforcement is directed.
(d) Any Subservicing Agreement entered into by the Servicer
shall provide that it may be assumed or terminated by the Trustee, if the
Trustee has assumed the duties of the Servicer, or any successor Servicer, at
the Trustee's or successor Servicer's option, as applicable, without cost or
obligation to the assuming or terminating party or the Trust Estate, upon the
assumption by such party of the obligations of the Servicer pursuant to
Section 8.05.
Any Subservicing Agreement, and any other transactions or
services relating to the Mortgage Loans involving a Subservicer, shall be
deemed to be between the Servicer and such Subservicer alone, and the Trustee
and the Certificateholders shall not be deemed parties thereto and shall have
no claims or rights of action against, rights, obligations, duties or
liabilities to or with respect to the Subservicer or its officers, directors
or employees, except as set forth in Section 3.01.
Section 3.03. Fidelity Bond; Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket
fidelity bond and an errors and omissions insurance policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating
to the Mortgage Loans it services. These policies must insure the Servicer
against losses resulting from dishonest or fraudulent acts committed by the
Servicer's personnel, any employees of outside firms that provide data
processing services for the Servicer, and temporary contract employees or
student interns. Such fidelity bond shall also protect and insure the
Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 3.03 requiring such fidelity
bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such bond and insurance policy shall be at least
equal to the corresponding amounts required by FNMA in the FNMA Servicing
Guide or by FHLMC in the FHLMC Sellers' & Servicers' Guide, as amended or
restated from time to time, or in an amount as may be permitted to the
Servicer by express waiver of FNMA or FHLMC.
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Section 3.04. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinate
Certificates and the examiners and supervisory agents of the OTS, the FDIC
and such other authorities, access to the documentation required by
applicable regulations of the OTS and the FDIC with respect to the Mortgage
Loans. Such access shall be afforded without charge, but only upon
reasonable and prior written request and during normal business hours at the
offices designated by the Servicer. Nothing in this Section 3.04 shall limit
the obligation of the Servicer to observe any applicable law and the failure
of the Servicer to provide access as provided in this Section 3.04 as a
result of such obligation shall not constitute a breach of this Section 3.04.
Section 3.05. Maintenance of Primary Mortgage Insurance Policy; Claims.
With respect to each Mortgage Loan with a Loan-to-Value Ratio in
excess of 80% or such other Loan-to-Value Ratio as may be required by law,
the Servicer responsible for servicing such Mortgage Loan shall, without any
cost to the Trust Estate, maintain or cause the Mortgagor to maintain in full
force and effect a Primary Insurance Policy insuring that portion of the
Mortgage Loan in excess of a percentage in conformity with FNMA
requirements. The Servicer shall pay or shall cause the Mortgagor to pay the
premium thereon on a timely basis, at least until the Loan-to-Value Ratio of
such Mortgage Loan is reduced to 80% or such other Loan-to-Value Ratio as may
be required by law. If such Primary Insurance Policy is terminated, the
Servicer shall obtain from another insurer a comparable replacement policy,
with a total coverage equal to the remaining coverage of such terminated
Primary Insurance Policy. If the insurer shall cease to be an insurer
acceptable to FNMA, the Servicer shall notify the Trustee in writing, it
being understood that the Servicer shall not have any responsibility or
liability for any failure to recover under the Primary Insurance Policy for
such reason. If the Servicer determines that recoveries under the Primary
Insurance Policy are jeopardized by the financial condition of the insurer,
the Servicer shall obtain from another insurer which meets the requirements
of this Section 3.05 a replacement insurance policy. The Servicer shall not
take any action that would result in noncoverage under any applicable Primary
Insurance Policy of any loss that, but for the actions of the Servicer, would
have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
3.13, the Servicer shall promptly notify the insurer under the related
Primary Insurance Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such Primary Insurance Policy and
shall take all actions which may be required by such insurer as a condition
to the continuation of coverage under such Primary Insurance Policy. If such
Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, the Servicer shall obtain a replacement Primary
Insurance Policy as provided above.
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In connection with its activities as servicer, the Servicer
agrees to prepare and present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any Primary Insurance Policy
in a timely fashion in accordance with the terms of such Primary Insurance
Policy and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 3.09(a), any amounts collected by the
Servicer under any Primary Insurance Policy shall be deposited in the related
Escrow Account, subject to withdrawal pursuant to Section 3.09(b).
The Servicer will comply with all provisions of applicable state
and federal law relating to the cancellation of, or collection of premiums
with respect to, Primary Mortgage Insurance, including, but not limited to,
the provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time.
Section 3.06. Rights of the Depositor and the Trustee in Respect of the
Servicer.
The Depositor may, but is not obligated to, enforce the
obligations of the Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the
Servicer hereunder and in connection with any such defaulted obligation to
exercise the related rights of the Servicer hereunder; provided that the
Servicer shall not be relieved of any of its obligations hereunder by virtue
of such performance by the Depositor or its designee. Neither the Trustee
nor the Depositor shall have any responsibility or liability for any action
or failure to act by the Servicer nor shall the Trustee or the Depositor be
obligated to supervise the performance of the Servicer hereunder or otherwise.
Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Subservicer in its capacity as such shall be deemed to be between the
Subservicer and the Servicer alone, and the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as
set forth in Section 3.07. The Servicer shall be solely liable for all fees
owed by it to any Subservicer, irrespective of whether the Servicer's
compensation pursuant to this Agreement is sufficient to pay such fees.
Section 3.07. Trustee to Act as Servicer.
If the Servicer shall for any reason no longer be the Servicer
hereunder (including by reason of an Event of Default), the Trustee shall
thereupon assume, if it so elects, or shall appoint a successor Servicer to
assume, all of the rights and obligations of the Servicer hereunder arising
thereafter (except that the Trustee shall not be (a) liable for losses of the
Servicer pursuant to Section 3.12 or any acts or omissions of the predecessor
Servicer hereunder, (b) obligated to make Advances if it is prohibited from
doing so by applicable law or (c) deemed to have made any representations and
warranties of the Servicer hereunder). Any such assumption shall be subject
to Section 7.02. If the Servicer shall for any reason no longer be the
Servicer (including by reason of any Event of Default), the Trustee or the
successor Servicer may elect to succeed to any rights and obligations of the
Servicer under each Subservicing Agreement or may terminate each Subservicing
Agreement. If it has elected to assume the Subservicing Agreement, the
Trustee or the successor Servicer shall be deemed to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to
any Subservicing Agreement entered into by the Servicer as contemplated by
Section 3.02 to the same extent as if the Subservicing Agreement had been
assigned to the assuming party except that the Servicer shall not be relieved
of any liability or obligations under any such Subservicing Agreement.
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The Servicer that is no longer the Servicer hereunder shall, upon
request of the Trustee, but at the expense of the Servicer, deliver to the
assuming party all documents and records relating to each Subservicing
Agreement or substitute servicing agreement and the Mortgage Loans then being
serviced thereunder and an accounting of amounts collected or held by it and
otherwise use its best efforts to effect the orderly and efficient transfer
of such substitute Subservicing Agreement to the assuming party.
Section 3.08. Collection of Mortgage Loan Payments; Servicer Custodial
Account; Certificate Account; and Upper-Tier Certificate Account.
(a) Continuously from the date hereof until the principal and
interest on all Mortgage Loans are paid in full, the Servicer will proceed
diligently, in accordance with this Agreement, to collect all payments due
under each of the Mortgage Loans it services when the same shall become due
and payable. Further, the Servicer will in accordance with all applicable
law and Customary Servicing Procedures ascertain and estimate taxes,
assessments, fire and hazard insurance premiums, mortgage insurance premiums
and all other charges with respect to the Mortgage Loans it services that, as
provided in any Mortgage, will become due and payable to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges
as and when they become due and payable. Consistent with the foregoing, the
Servicer may in its discretion (i) waive any late payment charge or any
prepayment charge or penalty interest in connection with the prepayment of a
Mortgage Loan it services and (ii) extend the due dates for payments due on a
Mortgage Note for a period not greater than 120 days; provided, however, that
the Servicer cannot extend the maturity of any such Mortgage Loan past the
date on which the final payment is due on the latest maturing Mortgage Loan
as of the Cut-Off Date. In the event of any such arrangement, the Servicer
shall make Periodic Advances on the related Mortgage Loan in accordance with
the provisions of Section 3.18 during the scheduled period in accordance with
the amortization schedule of such Mortgage Loan without modification thereof
by reason of such arrangements. The Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public
or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Servicer shall establish and maintain the Servicer
Custodial Account. The Servicer shall deposit or cause to be deposited into
the Servicer Custodial Account, all on a daily basis within one Business Day
of receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by Subservicers or received by the Servicer
in respect of the Mortgage Loans subsequent to the Cut-Off Date (other than
in respect of principal and interest due on the Mortgage Loans on or before
the Cut-Off Date) and the following amounts required to be deposited
hereunder with respect to the Mortgage Loans it services:
(i) all payments on account of principal of the Mortgage Loans, including
Principal Prepayments;
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(ii) all payments on account of interest on the Mortgage Loans, net of the
Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds, other than
Insurance Proceeds to be (1) applied to the restoration or repair of
the Mortgaged Property, (2) released to the Mortgagor in accordance
with Customary Servicing Procedures or (3) required to be deposited to
an Escrow Account pursuant to Section 3.09(a) and (B) any Insurance
Proceeds released from an Escrow Account pursuant to Section
3.09(b)(iv);
(iv) any amount required to be deposited by the Servicer pursuant to Section
3.08(d) in connection with any losses on Permitted Investments with
respect to the Servicer Custodial Account;
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.14;
(vi) all Repurchase Prices and all Substitution Adjustment Amounts received
by the Servicer;
(vii) Periodic Advances made by the Servicer pursuant to Section 3.18 and any
payments of Compensating Interest; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to the Servicer Custodial
Account by the Servicer shall be exclusive, it being understood and agreed
that, without limiting the generality of the foregoing, payments in the
nature of prepayment penalties, late payment charges or assumption fees, if
collected, need not be deposited by the Servicer. If the Servicer shall
deposit in the Servicer Custodial Account any amount not required to be
deposited, it may at any time withdraw or direct the institution maintaining
the Servicer Custodial Account to withdraw such amount from the Servicer
Custodial Account, any provision herein to the contrary notwithstanding. The
Servicer Custodial Account may contain funds that belong to one or more trust
funds created for mortgage pass-through certificates of other series and may
contain other funds respecting payments on mortgage loans belonging to the
Servicer or serviced by the Servicer on behalf of others. Notwithstanding
such commingling of funds, the Servicer shall keep records that accurately
reflect the funds on deposit in the Servicer Custodial Account that have been
identified by it as being attributable to the Mortgage Loans it services. The
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section 3.08. All funds required to be deposited in the
Servicer Custodial Account shall be held in trust for the Certificateholders
until withdrawn in accordance with Section 3.11.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly
upon receipt, deposit in the Certificate Account and retain therein the
following:
(i) the aggregate amount remitted by the Servicer to the Trustee pursuant
to Section 3.11(a)(viii);
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(ii) any amount paid by the Trustee pursuant to Section 3.08(d) in
connection with any losses on Permitted Investments with respect to the
Certificate Account; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Certificate Account.
If the Servicer shall remit any amount not required to be
remitted, it may at any time direct the Trustee to withdraw such amount from
the Certificate Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an
Officer's Certificate to the Trustee which describes the amounts deposited in
error in the Certificate Account. All funds required to be deposited in the
Certificate Account shall be held by the Trustee in trust for the
Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.11. In no event shall the Trustee
incur liability for withdrawals from the Certificate Account at the direction
of a the Servicer.
(d) Each institution at which the Servicer Custodial Account or
the Certificate Account is maintained shall invest the funds therein as
directed in writing by the Servicer in Permitted Investments, which shall
mature not later than (i) in the case of the Servicer Custodial Account, the
Business Day next preceding the related Remittance Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
account, then such Permitted Investment shall mature not later than such
Remittance Date) and (ii) in the case of the Certificate Account, the
Business Day next preceding the Distribution Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
account, then such Permitted Investment shall mature not later than such
Distribution Date) and, in each case, shall not be sold or disposed of prior
to its maturity. All such Permitted Investments shall be made in the name of
the Trustee, for the benefit of the Certificateholders. All income or gain
(net of any losses) realized from any such investment of funds on deposit in
the Servicer Custodial Account shall be for the benefit of the Servicer as
servicing compensation and shall be retained by it monthly as provided
herein. All income or gain (net of any losses) realized from any such
investment of funds on deposit in the Certificate Account shall be for the
benefit of the Trustee as additional compensation and shall be retained by it
monthly as provided herein. The amount of any losses realized in the
Servicer Custodial Account or the Certificate Account incurred in any such
account in respect of any such investments shall promptly be deposited by the
Servicer in the Servicer Custodial Account or by the Trustee in the
Certificate Account, as applicable.
(e) The Servicer shall give notice to the Trustee of any
proposed change of the location of the Servicer Custodial Account maintained
by the Servicer not later than 30 days and not more than 45 days prior to any
change thereof. The Trustee shall give notice to the Servicer, each Rating
Agency and the Depositor of any proposed change of the location of the
Certificate Account not later than 30 days and not more than 45 days prior to
any change thereof. The creation of the Servicer Custodial Account shall be
evidenced by a certification substantially in the form of Exhibit F hereto.
A copy of such certification shall be furnished to the Trustee.
(f) The Trustee shall establish and maintain the Upper-Tier
Certificate Account. On each Distribution Date (other than the Final
Distribution Date, if such Final Distribution Date is in connection with a
purchase of the assets of the Trust Estate by the Depositor), the Trustee
shall, from funds available on deposit in the Certificate Account, deposit,
in immediately available funds, by wire transfer or otherwise, into the
Upper-Tier Certificate Account, the Lower-Tier Distribution Amount.
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Section 3.09. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Servicer shall segregate and hold all funds
collected and received pursuant to each Mortgage Loan which constitute Escrow
Payments in trust separate and apart from any of its own funds and general
assets and for such purpose shall establish and maintain one or more escrow
accounts (collectively, the "Escrow Account"), titled "[Insert name of
Servicer], in trust for registered holders of Wachovia Mortgage Loan Trust,
LLC Mortgage Pass-Through Certificates, Series 200 - and various
Mortgagors." The Escrow Account shall be established with a commercial bank,
a savings bank or a savings and loan association that meets the guidelines
set forth by FNMA or FHLMC as an eligible institution for escrow accounts and
which is a member of the Automated Clearing House. In any case, the Escrow
Account shall be insured by the FDIC to the fullest extent permitted by law.
The Servicer shall deposit in the appropriate Escrow Account on a daily
basis, and retain therein: (i) all Escrow Payments collected on account of
the Mortgage Loans, (ii) all amounts representing proceeds of any hazard
insurance policy which are to be applied to the restoration or repair of any
related Mortgaged Property and (iii) all amounts representing proceeds of any
Primary Insurance Policy. Nothing herein shall require the Servicer to compel
a Mortgagor to establish an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow
Accounts may be made by the Servicer only (i) to effect timely payment of
taxes, assessments, mortgage insurance premiums, fire and hazard insurance
premiums, condominium or PUD association dues, or comparable items
constituting Escrow Payments for the related Mortgage, (ii) to reimburse the
Servicer out of related Escrow Payments made with respect to a Mortgage Loan
for any Servicing Advance made by the Servicer pursuant to Section 3.09(c)
with respect to such Mortgage Loan, (iii) to refund to any Mortgagor any sums
determined to be overages, (iv) for transfer to the Servicer Custodial
Account upon default of a Mortgagor or in accordance with the terms of the
related Mortgage Loan and if permitted by applicable law, (v) for application
to restore or repair the Mortgaged Property, (vi) to pay to the Mortgagor, to
the extent required by law, any interest paid on the funds deposited in the
Escrow Account, (vii) to pay to itself any interest earned on funds deposited
in the Escrow Account (and not required to be paid to the Mortgagor), (viii)
to the extent permitted under the terms of the related Mortgage Note and
applicable law, to pay late fees with respect to any Monthly Payment which is
received after the applicable grace period, (ix) to withdraw suspense
payments that are deposited into the Escrow Account, (x) to withdraw any
amounts inadvertently deposited in the Escrow Account or (xi) to clear and
terminate the Escrow Account upon the termination of this Agreement in
accordance with Section 10.01. Any Escrow Account shall not be a part of the
Trust Estate.
(c) With respect to each Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of taxes, assessments and
other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Insurance Policy premiums and fire and hazard insurance
coverage. The Servicer shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such
purpose deposits of the Mortgagor in the Escrow Account, if any, which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage. To the extent
that a Mortgage does not provide for Escrow Payments, the Servicer shall
determine that any such payments are made by the Mortgagor. The Servicer
assumes full responsibility for the timely payment of all such bills and
shall effect timely payments of all such bills irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments. The Servicer shall advance any such payments that are not
timely paid, but the Servicer shall be required so to advance only to the
extent that such Servicing Advances, in the good faith judgment of the
Servicer, will be recoverable by the Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise.
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Section 3.10. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
The Servicer shall afford the Trustee reasonable access to all
records and documentation regarding the Mortgage Loans and all accounts,
insurance information and other matters relating to this Agreement, such
access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Servicer.
Upon reasonable advance notice in writing, the Servicer will
provide to each Certificateholder which is a savings and loan association,
bank or insurance company certain reports and reasonable access to
information and documentation regarding the Mortgage Loans sufficient to
permit such Certificateholder to comply with applicable regulations of the
OTS or other regulatory authorities with respect to investment in the
Certificates; provided that the Servicer shall be entitled to be reimbursed
by each such Certificateholder for actual expenses incurred by the Servicer
in providing such reports and access.
Section 3.11. Permitted Withdrawals from the Servicer Custodial Account;
Certificate Account and Upper-Tier Certificate Account.
(a) The Servicer may from time to time make withdrawals from
the Servicer Custodial Account, for the following purposes:
(i) to pay to the Servicer (to the extent not previously retained), the
servicing compensation to which it is entitled pursuant to Section
3.17, and to pay to the Servicer, as additional servicing compensation,
earnings on or investment income with respect to funds in or credited
to the Servicer Custodial Account;
(ii) to reimburse the Servicer for unreimbursed Advances made by it, such
right of reimbursement pursuant to this clause (ii) being limited to
amounts received on the Mortgage Loan(s) in respect of which any such
Advance was made;
(iii) to reimburse the Servicer for any Nonrecoverable Advance previously
made;
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(iv) to reimburse the Servicer for Insured Expenses from the related
Insurance Proceeds;
(v) to pay to the purchaser, with respect to each Mortgage Loan or REO
Property that has been purchased pursuant to Section 2.02 or 2.04, all
amounts received thereon after the date of such purchase;
(vi) to reimburse the Servicer or the Depositor for expenses incurred by any
of them and reimbursable pursuant to Section 7.03;
(vii) to withdraw any amount deposited in the Servicer Custodial Account and
not required to be deposited therein;
(viii) on or prior to the Remittance Date, to withdraw an amount equal
to the related Pool Distribution Amount, the related Trustee Fee and
any other amounts due to the Trustee under this Agreement for such
Distribution Date, to the extent on deposit, and remit such amount in
immediately available funds to the Trustee for deposit in the
Certificate Account; and
(ix) to clear and terminate the Servicer Custodial Account upon termination
of this Agreement pursuant to Section 10.01.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Servicer Custodial Account pursuant to clauses (i), (ii),
(iv) and (v). Prior to making any withdrawal from the Servicer Custodial
Account pursuant to clause (iii), the Servicer shall deliver to the Trustee
an Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by the Servicer to be a Nonrecoverable Advance
and identifying the related Mortgage Loan(s) and their respective portions of
such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Certificate
Account for distributions to Certificateholders in the manner specified in
this Agreement. In addition, the Trustee may from time to time make
withdrawals from the Certificate Account for the following purposes:
(i) to pay to itself the Trustee Fee and any other amounts due to the
Trustee under this Agreement for the related Distribution Date;
(ii) to pay to itself as additional compensation earnings on or investment
income with respect to funds in the Certificate Account;
(iii) to withdraw and return to the Servicer any amount deposited in the
Certificate Account and not required to be deposited therein; and
(iv) to clear and terminate the Certificate Account upon termination of the
Agreement pursuant to Section 10.01.
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(c) Notwithstanding anything herein to the contrary, the
Regular Certificates and the Class A-R Certificate shall not receive
distributions directly from the Certificate Account. On each Distribution
Date, funds on deposit in the Upper-Tier Certificate Account shall be used to
make payments on the Regular Certificates and the Class A-R Certificate as
provided in Sections 5.01 and 5.02. The Upper-Tier Certificate Account shall
be cleared and terminated upon termination of this Agreement pursuant to
Section 10.01.
Section 3.12. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan,
fire and hazard insurance with extended coverage customary in the area where
the Mortgaged Property is located in an amount which is at least equal to the
lesser of (a) the full insurable value of the Mortgaged Property or (b) the
greater of (i) the outstanding principal balance owing on the Mortgage Loan
and (ii) an amount such that the proceeds of such insurance shall be
sufficient to avoid the application to the Mortgagor or loss payee of any
coinsurance clause under the policy. If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency
as having special flood hazards (and such flood insurance has been made
available) the Servicer will cause to be maintained a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration and the requirements of FNMA or FHLMC. The Servicer shall also
maintain on REO Property, fire and hazard insurance with extended coverage in
an amount which is at least equal to the maximum insurable value of the
improvements which are a part of such property, liability insurance and, to
the extent required, flood insurance in an amount required above. Any
amounts collected by the Servicer under any such policies (other than amounts
to be deposited in an Escrow Account and applied to the restoration or repair
of the property subject to the related Mortgage or property acquired in
liquidation of the Mortgage Loan, or to be released to the Mortgagor in
accordance with Customary Servicing Procedures) shall be deposited in the
Servicer Custodial Account, subject to withdrawal pursuant to Section
3.11(a). It is understood and agreed that no earthquake or other additional
insurance need be required by the Servicer of any Mortgagor or maintained on
REO Property, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional
insurance. All policies required hereunder shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer, and shall provide for at
least 30 days prior written notice of any cancellation, reduction in amount
or material change in coverage to the Servicer.
The hazard insurance policies for each Mortgage Loan secured by a
unit in a condominium development or planned unit development shall be
maintained with respect to such Mortgage Loan and the related development in
a manner which is consistent with FNMA requirements.
Notwithstanding the foregoing, the Servicer may maintain a
blanket policy insuring against hazard losses on all of the Mortgaged
Properties relating to the Mortgage Loans in lieu of maintaining the required
hazard insurance policies for each Mortgage Loan and may maintain a blanket
policy insuring against special flood hazards in lieu of maintaining any
required flood insurance. Any such blanket policies shall (A) be consistent
with prudent industry standards, (B) name the Servicer as loss payee, (C)
provide coverage in an amount equal to the aggregate unpaid principal balance
on the related Mortgage Loans without co-insurance, and (D) otherwise comply
with the requirements of this Section 3.12. Any such blanket policy may
contain a deductible clause; provided that if any Mortgaged Property is not
covered by a separate policy otherwise complying with this Section 3.12 and a
loss occurs with respect to such Mortgaged Property which loss would have
been covered by such a policy, the Servicer shall deposit in the Servicer
Custodial Account the difference, if any, between the amount that would have
been payable under a separate policy complying with this Section 3.12 and the
amount paid under such blanket policy.
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Section 3.13. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.13, when any
Mortgaged Property subject to a Mortgage has been conveyed by the Mortgagor,
the Servicer shall use reasonable efforts, to the extent that it has actual
knowledge of such conveyance, to enforce any due-on-sale clause contained in
any Mortgage Note or Mortgage, to the extent permitted under applicable law
and governmental regulations, but only to the extent that such enforcement
will not adversely affect or jeopardize coverage under any Required Insurance
Policy. Notwithstanding the foregoing, the Servicer is not required to
exercise such rights with respect to a Mortgage Loan if the Person to whom
the related Mortgaged Property has been conveyed or is proposed to be
conveyed satisfies the terms and conditions contained in the Mortgage Note
and Mortgage related thereto and the consent of the mortgagee under such
Mortgage Note or Mortgage is not otherwise required under such Mortgage Note
or Mortgage as a condition to such transfer. If (i) the Servicer is
prohibited by law from enforcing any such due-on-sale clause, (ii) coverage
under any Required Insurance Policy would be adversely affected, (iii) the
Mortgage Note does not include a due-on-sale clause or (iv) nonenforcement is
otherwise permitted hereunder, the Servicer is authorized, subject to Section
3.13(b), to take or enter into an assumption and modification agreement from
or with the Person to whom such Mortgaged Property has been or is about to be
conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon; provided that the Mortgage Loan shall continue to be covered
(if so covered before the Servicer enters such agreement) by the applicable
Required Insurance Policies. The Servicer, subject to Section 3.13(b), is
also authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with
such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable
under the Mortgage Note. Notwithstanding the foregoing, the Servicer shall
not be deemed to be in default under this Section 3.13 by reason of any
transfer or assumption which the Servicer reasonably believes it is
restricted by law from preventing, for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of
the Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Servicer
shall prepare and deliver or cause to be prepared and delivered to the
Trustee for signature and shall direct, in writing, the Trustee to execute
the assumption agreement with the Person to whom the Mortgaged Property is to
be conveyed and such modification agreement or supplement to the Mortgage
Note or Mortgage or other instruments as are reasonable or necessary to carry
out the terms of the Mortgage Note or Mortgage or otherwise to comply with
any applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In no event shall the Trustee incur liability for
executing any document under this Section 3.13 at the direction of the
Servicer. In connection with any such assumption, no material term of the
Mortgage Note may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Servicer in accordance with its
underwriting standards as then in effect. Together with each such
substitution, assumption or other agreement or instrument delivered to the
Trustee for execution by it, the Servicer shall deliver an Officer's
Certificate signed by a Servicing Officer stating that the requirements of
this subsection have been met. The Servicer shall notify the Trustee that any
such substitution or assumption agreement has been completed by forwarding to
the Trustee (or at the direction of the Trustee, the Custodian) the original
of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement may be retained by the Servicer as additional master
servicing compensation. Notwithstanding the foregoing, to the extent
permissible under applicable law and at the request of the Servicer, the
Trustee shall execute and deliver to the Servicer any powers of attorney and
other documents prepared by the Servicer that are reasonably necessary or
appropriate to enable the Servicer to execute any assumption agreement or
modification agreement required to be executed by the Trustee under this
Section 3.13.
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Section 3.14. Realization Upon Defaulted Mortgage Loans; REO Property.
(a) The Servicer shall use reasonable efforts to foreclose upon
or otherwise comparably convert the ownership of Mortgaged Properties
securing such of the Mortgage Loans as come into and continue in default and
as to which no satisfactory arrangements can be made for collection of
delinquent payments. In connection with such foreclosure or other
conversion, the Servicer shall follow Customary Servicing Procedures and
shall meet the requirements of the insurer under any Required Insurance
Policy; provided, however, that the Servicer may enter into a special
servicing agreement with an unaffiliated Holder of 100% Percentage Interest
of a Class of Class B Certificates or a holder of a class of securities
representing interests in the Class B Certificates alone or together with
other subordinated mortgage pass-through certificates. Such agreement shall
be substantially in the form attached hereto as Exhibit K or subject to each
Rating Agency's acknowledgment that the ratings of the Certificates in effect
immediately prior to the entering into such agreement would not be qualified,
downgraded or withdrawn and the Certificates would not be placed on credit
review status (except for possible upgrading) as a result of such agreement.
Any such agreement may contain provisions whereby such holder may instruct
the Servicer to commence or delay foreclosure proceedings with respect to
delinquent Mortgage Loans and will contain provisions for the deposit of cash
by the holder that would be available for distribution to Certificateholders
if Liquidation Proceeds are less than they otherwise may have been had the
Servicer acted in accordance with its normal procedures. Notwithstanding the
foregoing, the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any Mortgaged
Property unless it shall determine (i) that such restoration and/or
foreclosure will increase the proceeds of liquidation of the Mortgage Loan
after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through proceeds of the liquidation of the Mortgage
Loan (respecting which it shall have priority for purposes of withdrawals
from the Servicer Custodial Account). Any such expenditures shall constitute
Servicing Advances for purposes of this Agreement.
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The decision of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the Servicer that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as
the Trustee hereunder and not in its individual capacity. The Servicer shall
ensure that the title to such REO Property references this Agreement and the
Trustee's capacity hereunder. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by
the Servicer manage, conserve, protect and operate such REO Property in the
same manner that it manages, conserves, protects and operates other
foreclosed property for its own account and in the same manner that similar
property in the same locality as the REO Property is managed. Incident to
its conservation and protection of the interests of the Certificateholders,
the Servicer may rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Certificateholders for the period prior to the
sale of such REO Property. The Servicer shall prepare for and deliver to the
Trustee a statement with respect to each REO Property that has been rented,
if any, showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO
Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions; provided, however, that
the Servicer shall have no duty to rent any REO Property on behalf of the
Trust. The net monthly rental income, if any, from such REO Property shall
be deposited in the Servicer Custodial Account no later than the close of
business on each Determination Date. The Servicer shall perform, with respect
to the Mortgage Loans, the tax reporting and withholding required by Sections
1445 and 6050J of the Code with respect to foreclosures and abandonments, the
tax reporting required by Section 6050H of the Code with respect to the
receipt of mortgage interest from individuals and, if required by Section
6050P of the Code with respect to the cancellation of indebtedness by certain
financial entities, by preparing such tax and information returns as may be
required, in the form required. The Servicer shall deliver copies of such
reports to the Trustee.
If the Trust acquires any Mortgaged Property as described above
or otherwise in connection with a default or a default which is reasonably
foreseeable on a Mortgage Loan, the Servicer shall dispose of such Mortgaged
Property prior to the end of the third calendar year following the year of
its acquisition by the Trust (such period, the "REO Disposition Period")
unless (A) the Trustee shall have been supplied by the Servicer with an
Opinion of Counsel to the effect that the holding by the Trust of such
Mortgaged Property subsequent to the REO Disposition Period will not result
in the imposition of taxes on "prohibited transactions" (as defined in
Section 860F of the Code) on either the Upper-Tier REMIC or the Lower-Tier
REMIC or cause either REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding, or (B) the Trustee (at the Servicer's
expense) or the Servicer shall have applied for, prior to the expiration of
the REO Disposition Period, an extension of the REO Disposition Period in the
manner contemplated by Section 856(e)(3) of the Code. If such an Opinion of
Counsel is provided or such an exemption is obtained, the Trust may continue
to hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel) for the applicable period. Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Trust
shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or (ii) subject either REMIC to the imposition of any federal, state
or local income taxes on the income earned from such Mortgaged Property under
Section 860G(c) of the Code or otherwise, unless the Servicer has agreed to
indemnify and hold harmless the Trust with respect to the imposition of any
such taxes. The Servicer shall identify to the Trustee any Mortgaged
Property relating to a Mortgage Loan held by the Trust for 30 months for
which no plans to dispose of such Mortgaged Property by the Servicer have
been made. After delivery of such identification, the Servicer shall proceed
to dispose of any such Mortgaged Property by holding a commercially
reasonable auction for such property.
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The income earned from the management of any REO Properties, net
of reimbursement to the Servicer for expenses incurred (including any
property or other taxes) in connection with such management and net of
unreimbursed Servicing Fees, Periodic Advances and Servicing Advances, shall
be applied to the payment of principal of and interest on the related
defaulted Mortgage Loans (solely for the purposes of allocating principal and
interest, interest shall be treated as accruing as though such Mortgage Loans
were still current) and all such income shall be deemed, for all purposes in
this Agreement, to be payments on account of principal and interest on the
related Mortgage Notes and shall be deposited into the Servicer Custodial
Account. To the extent the net income received during any calendar month is
in excess of the amount attributable to amortizing principal and accrued
interest at the related Mortgage Interest Rate on the related Mortgage Loan
for such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as
any income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and Servicing Fees; second, to reimburse the Servicer for
any unreimbursed Periodic Advances and to reimburse the Servicer Custodial
Account for any Nonrecoverable Advances (or portions thereof) that were
previously withdrawn by the Servicer pursuant to Section 3.11(a)(iii) that
related to such Mortgage Loan; third, to accrued and unpaid interest (to the
extent no Periodic Advance has been made for such amount or any such Periodic
Advance has been reimbursed) on the Mortgage Loan or related REO Property, at
the Mortgage Rate to the Due Date occurring in the month in which such
amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan. Excess Proceeds, if any, from the
liquidation of a Liquidated Mortgage Loan will be retained by the Servicer as
additional servicing compensation pursuant to Section 3.17.
(b) The Servicer shall promptly notify the Depositor of any
Mortgage Loan which comes into default. The Depositor shall be entitled, at
its option, to repurchase (i) any such defaulted Mortgage Loan from the Trust
Estate if (a) in the Depositor's judgment, the default is not likely to be
cured by the Mortgagor and (b) such Mortgage Loan is 180 days or more
delinquent or (ii) any Mortgage Loan in the Trust Estate which pursuant to
Section 4(b) of the Mortgage Loan Purchase Agreement the Seller requests the
Depositor to repurchase and to sell to the Seller to facilitate the exercise
of the Seller's rights against the originator or prior holder of such
Mortgage Loan. The purchase price for any such Mortgage Loan shall be 100%
of the unpaid principal balance of such Mortgage Loan plus accrued interest
thereon at the Mortgage Interest Rate (less the Servicing Fee Rate for such
Mortgage Loan) through the last day of the month in which such repurchase
occurs. Upon the receipt of such purchase price, the Servicer shall provide
to the Trustee the notification required by Section 3.15 and the Trustee or
the Custodian shall promptly release to the Depositor the Mortgage File
relating to the Mortgage Loan being repurchased.
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Section 3.15. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Servicer will immediately notify the
Trustee (or, at the direction of the Trustee, the Custodian) by delivering,
or causing to be delivered, two copies (one of which will be returned to the
Servicer with the Mortgage File) of a Request for Release (which may be
delivered in an electronic format acceptable to the Trustee and the
Servicer). Upon receipt of such request, the Trustee or the Custodian, as
applicable, shall within seven Business Days release the related Mortgage
File to the Servicer. The Trustee shall at the Servicer's direction execute
and deliver to the Servicer the request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage, in each case provided by the Servicer,
together with the Mortgage Note with written evidence of cancellation
thereon. If the Mortgage has been recorded in the name of MERS or its
designee, the Servicer shall take all necessary action to reflect the release
of the Mortgage on the records of MERS. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the related Mortgagor. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose
collection under any policy of flood insurance, any fidelity bond or errors
or omissions policy, or for the purposes of effecting a partial release of
any Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee or the Custodian, as
applicable, shall, upon delivery to the Trustee (or, at the direction of the
Trustee, the Custodian) of a Request for Release signed by a Servicing
Officer, release the Mortgage File within seven Business Days to the
Servicer. Subject to the further limitations set forth below, the Servicer
shall cause the Mortgage File so released to be returned to the Trustee or
the Custodian, as applicable, when the need therefor by the Servicer no
longer exists, unless the Mortgage Loan is liquidated and the proceeds
thereof are deposited in the Servicer Custodial Account, in which case the
Servicer shall deliver to the Trustee or the Custodian, as applicable, a
Request for Release, signed by a Servicing Officer.
The Trustee shall execute and deliver to the Servicer any powers
of attorney and other documents prepared by the Servicer that are reasonably
necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties under this Agreement, upon the request of the
Servicer. In addition, upon prepayment in full of any Mortgage Loan or the
receipt of notice that funds for such purpose have been placed in escrow, the
Servicer is authorized to give, as attorney-in-fact for the Trustee and the
mortgagee under the Mortgage, an instrument of satisfaction (or Assignment of
Mortgage without recourse) regarding the Mortgaged Property relating to such
Mortgage Loan, which instrument of satisfaction or Assignment of Mortgage, as
the case may be, shall be delivered to the Person entitled thereto against
receipt of the prepayment in full. If the Mortgage is registered in the name
of MERS or its designee, the Servicer shall take all necessary action to
reflect the release on the records of MERS. In lieu of executing such
satisfaction or Assignment of Mortgage, or if another document is required to
be executed by the Trustee, the Servicer may deliver or cause to be delivered
to the Trustee, for signature, as appropriate, any court pleadings, requests
for trustee's sale or other documents necessary to effectuate such
foreclosure or any legal action brought to obtain judgment against the
Mortgagor on the Mortgage Note or the Mortgage or to obtain a deficiency
judgment or to enforce any other remedies or rights provided by the Mortgage
Note or the Mortgage or otherwise available at law or in equity.
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Section 3.16. Documents, Records and Funds in Possession of the Servicer
to be Held for the Trustee.
The Servicer shall transmit to the Trustee or, at the direction
of the Trustee, the Custodian as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time and shall account fully to the Trustee for any
funds received by the Servicer or which otherwise are collected by the
Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan. The documents constituting the Servicing File shall be held
by the Servicer as custodian and bailee for the Trustee. All Mortgage Files
and funds collected or held by, or under the control of, the Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including but not limited to,
any funds on deposit in the Servicer Custodial Account, shall be held by the
Servicer for and on behalf of the Trustee and shall be and remain the sole
and exclusive property of the Trustee, subject to the applicable provisions
of this Agreement. The Servicer also agrees that it shall not knowingly
create, incur or subject any Mortgage File or any funds that are deposited in
the Servicer Custodial Account, Certificate Account or any Escrow Account, or
any funds that otherwise are or may become due or payable to the Trustee for
the benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance created by the
Servicer, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Servicer shall be entitled to set
off against and deduct from any such funds any amounts that are properly due
and payable to the Servicer under this Agreement.
Section 3.17. Servicing Compensation.
The Servicer shall be entitled out of each payment of interest on
a Mortgage Loan (or portion thereof) and included in the Trust Estate to
retain or withdraw from the Servicer Custodial Account an amount equal to the
Servicing Fee for such Distribution Date.
Additional servicing compensation in the form of Excess Proceeds,
prepayment penalties, assumption fees, late payment charges and all income
and gain net of any losses realized from Permitted Investments and all other
customary and ancillary income and fees shall be retained by the Servicer to
the extent not required to be deposited in the Servicer Custodial Account
pursuant to Section 3.08(b). The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided in this Agreement.
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Notwithstanding the foregoing, with respect to the payment of the
Servicing Fee on any Distribution Date, the aggregate Servicing Fee for the
Servicer for such Distribution Date shall be reduced (but not below zero) by
an amount equal to the lesser of (a) the Prepayment Interest Shortfall for
such Distribution Date relating to the Mortgage Loans and (b) one-twelfth of
% of the aggregate Stated Principal Balance of such Mortgage Loans for
such Distribution Date (any such reduction, "Compensating Interest").
Section 3.18. Advances.
The Servicer shall determine on or before each Servicer Advance
Date whether it is required to make a Periodic Advance pursuant to the
definition thereof. If the Servicer determines it is required to make a
Periodic Advance, it shall, on or before the Servicer Advance Date, either
(a) deposit into the Servicer Custodial Account an amount equal to the
Advance and/or (b) make an appropriate entry in its records relating to the
Servicer Custodial Account that any portion of the Amount Held for Future
Distribution in the Servicer Custodial Account has been used by the Servicer
in discharge of its obligation to make any such Periodic Advance. Any funds
so applied shall be replaced by the Servicer by deposit in the Servicer
Custodial Account no later than the close of business on the Business Day
preceding the next Servicer Advance Date. The Servicer shall be entitled to
be reimbursed from the Servicer Custodial Account for all Advances of its own
funds made pursuant to this Section 3.18 as provided in Section 3.11(a). The
obligation to make Periodic Advances with respect to any Mortgage Loan shall
continue until the ultimate disposition of the REO Property or Mortgaged
Property relating to such Mortgage Loan. The Servicer shall inform the
Trustee of the amount of the Periodic Advance to be made by the Servicer on
each Servicer Advance Date no later than the related Remittance Date.
The Servicer shall deliver to the Trustee on the related Servicer
Advance Date an Officer's Certificate of a Servicing Officer indicating the
amount of any proposed Periodic Advance determined by the Servicer to be a
Nonrecoverable Advance. Notwithstanding anything to the contrary, the
Servicer shall not be required to make any Periodic Advance or Servicing
Advance that would be a Nonrecoverable Advance.
Section 3.19. Modifications, Waivers, Amendments and Consents.
(a) Subject to this Section 3.19, the Servicer may agree to any
modification, waiver, forbearance, or amendment of any term of any Mortgage
Loan without the consent of the Trustee or any Certificateholder. All
modifications, waivers, forbearances or amendments of any Mortgage Loan shall
be in writing and shall be consistent with Customary Servicing Procedures.
(b) The Servicer shall not agree to enter into, and shall not
enter into, any modification, waiver (other than a waiver referred to in
Section 3.13, which waiver, if any, shall be governed by Section 3.13),
forbearance or amendment of any term of any Mortgage Loan if such
modification, waiver, forbearance, or amendment would:
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(i) affect the amount or timing of any related payment of principal,
interest or other amount payable thereunder;
(ii) in the Servicer's judgment, materially impair the security for such
Mortgage Loan or reduce the likelihood of timely payment of amounts due
thereon; or
(iii) otherwise constitute a "significant modification" within the meaning of
Treasury Regulations Section 1.860G-2(b);
unless, in either case, (A) such Mortgage Loan is 90 days or more past due or
(B) the Servicer delivers to the Trustee an Opinion of Counsel to the effect
that such modification, waiver, forbearance or amendment would not affect the
REMIC status of either the Upper-Tier REMIC or the Lower-Tier REMIC and, in
either case, such modification, waiver, forbearance or amendment is
reasonably likely to produce a greater recovery with respect to such Mortgage
Loan than would liquidation. Subject to Customary Servicing Procedures, the
Servicer may permit a forbearance for a Mortgage Loan which in the Servicer's
judgment is subject to imminent default.
(c) Any payment of interest, which is deferred pursuant to any
modification, waiver, forbearance or amendment permitted hereunder, shall
not, for purposes hereof, including, without limitation, calculating monthly
distributions to Certificateholders, be added to the unpaid principal balance
of the related Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan or such modification, waiver or amendment so permit.
(d) The Servicer may, as a condition to granting any request by
a Mortgagor for consent, modification, waiver, forbearance or amendment, the
granting of which is within the Servicer's discretion pursuant to the
Mortgage Loan and is permitted by the terms of this Agreement, require that
such Mortgagor pay to the Servicer, as additional servicing compensation, a
reasonable or customary fee for the additional services performed in
connection with such request, together with any related costs and expenses
incurred by the Servicer, which amount shall be retained by the Servicer as
additional servicing compensation.
(e) The Servicer shall notify the Trustee, in writing, of any
modification, waiver, forbearance or amendment of any term of any Mortgage
Loan and the date thereof, and shall deliver to the Trustee (or, at the
direction of the Trustee, the Custodian) for deposit in the related Mortgage
File, an original counterpart of the agreement relating to such modification,
waiver, forbearance or amendment, promptly (and in any event within ten
Business Days) following the execution thereof; provided, however, that if
any such modification, waiver, forbearance or amendment is required by
applicable law to be recorded, the Servicer (i) shall deliver to the Trustee
a copy thereof and (ii) shall deliver to the Trustee such document, with
evidence of notification upon receipt thereof from the public recording
office.
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ARTICLE IV
SERVICER'S CERTIFICATE AND 1934 ACT REPORTING
Section 4.01. Servicer's Certificate.
Each month, not later than 12:00 noon Eastern time on the
Business Day following each Determination Date, the Servicer shall deliver to
the Trustee, a Servicer's Certificate (in substance and format mutually
acceptable to the Servicer and the Trustee) certified by a Servicing Officer
setting forth the information necessary in order for the Trustee to perform
its obligations under this Agreement. The Trustee may conclusively rely upon
the information contained in a Servicer's Certificate for all purposes
hereunder and shall have no duty to verify or re-compute any of the
information contained therein.
Each such statement shall be provided by the Trustee to any
Holder of a Certificate upon request and shall also, to the extent available,
include information regarding delinquencies on Mortgage Loans providing such
statement, indicating the number and aggregate principal amount of Mortgage
Loans which are either one, two, three or more than three months delinquent
and the book value of any REO Property.
Section 4.02. Reports to the Securities and Exchange Commission.
The Trustee shall, on behalf of the Trust, cause to be filed with
the Commission any periodic reports required to be filed under the provisions
of the 1934 Act and the rules and regulations of the Commission thereunder,
for so long as any Certificates registered under the 1933 Act are outstanding
(other than the Current Report on Form 8-K to be filed by the Depositor in
connection with computational materials and the initial Current Report on
Form 8-K to be filed by the Depositor in connection with the issuance of the
Certificates). Upon the request of the Trustee, the Servicer and the
Depositor shall cooperate with the Trustee in the preparation of any such
report and shall provide to the Trustee in a timely manner all such
information or documentation as the Trustee may reasonably request in
connection with the performance of its duties and obligations under this
Section.
Section 4.03. Annual ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification.
The Servicer will deliver to the Depositor and the Trustee on or
before the earlier of (a) March 15 of each year or (b) with respect to any
calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the 1934 Act and the rules and
regulations of the Commission, five Business Days prior to the date on which
the annual report on Form 10-K is required to be filed, a certification,
signed by the senior officer in charge of the servicing functions of the
Servicer, in the form attached as Exhibit N hereto or such other form as may
be required or permitted by the Commission (the "Form 10-K Certification"),
in compliance with Rules 13a-14 and 15d-14 under the 1934 Act and any
additional directives of the Commission.
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Section 4.04. Annual Servicing Criteria Assessment Report.
The Servicer will deliver to the Depositor and the Trustee on or
before the earlier of (a) March 15 of each year or (b) with respect to any
calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the 1934 Act and the rules and
regulations of the Commission, five Business Days prior to the date on which
the annual report on Form 10-K is required to be filed, a report regarding
its assessment of compliance during the preceding calendar year with all
applicable servicing criteria set forth in relevant Commission regulations
with respect to mortgage-backed securities transactions taken as a whole
involving the Servicer that are backed by the same types of assets as those
backing the Certificates, as well as similar reports on assessment of
compliance received from other parties participating in the servicing
function as required by relevant Commission regulations, as described in Item
1122(a) of Regulation AB. The [Servicer] shall obtain from all other parties
participating in the servicing function any required assessments.
Section 4.05. Annual Independent Public Accountants' Attestation.
On or before the earlier of (a) March 15 of each year or (b) with
respect to any calendar year during which the Depositor's annual report on
Form 10-K is required to be filed in accordance with the 1934 Act and the
rules and regulations of the Commission, five Business Days prior to the date
on which the annual report is required to be filed, the Servicer at its
expense shall cause a firm of independent public accountants, which shall be
members of the American Institute of Certified Public Accountants, to furnish
a report to the Depositor and the Trustee the attestation required under Item
1122(b) of Regulation AB. In rendering such statement, such firm may rely,
as to matters relating to the direct servicing of mortgage loans by
Subservicers, upon comparable statements for examinations conducted by
independent public accountants substantially in accordance with standards
established by the American Institute of Certified Public Accountants
(rendered within one year of such statement) with respect to such
Subservicers.
Section 4.06. Annual Statement as to Compliance.
The Servicer will deliver to the Depositor and the Trustee on or
before the earlier of (a) March 15 of each year or (b) with respect to any
calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the 1934 Act and the rules and
regulations of the Commission, five Business Days prior to the date on which
the annual report on Form 10-K is required to be filed, a servicer compliance
statement, signed by an authorized officer of the Servicer, as described in
Item 1123 of Regulation AB, to the effect that:
(i) A review of the Servicer's activities during the reporting
period and of its performance under this Agreement has been made under such
officer's supervision.
(ii) To the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Agreement in all material respects throughout the reporting period or, if
there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature
and status thereof.
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The [Servicer] [Trustee] shall use commercially reasonable
efforts to obtain from all other servicers any additional certifications
required under Item 1123 of Regulation AB to the extent required to be
included in a Report on Form 10-K; provided, however, that a failure to
obtain such certifications shall not be a breach of the [Trustee]
[Servicer]'s duties hereunder if any such party fails to deliver such a
certification.
Section 4.07. Required Information for Form 10-D.
In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of the Agreement, not later
than ten days prior to the deadline for the filing of any distribution report
on Form 10-D in respect of the Certificates, the Servicer shall provide to
the Depositor and the Trustee notice of the occurrence of any of the
following events along with all information, data, and materials related
thereto as may be required to be included in the related distribution report
on Form 10-D (as specified in the provisions of Regulation AB referenced
below):
(i) any material modifications, extensions or waivers of pool asset terms,
fees, penalties or payments during the distribution period or that have
cumulatively become material over time (Item 1121(a)(11) of Regulation
AB);
(ii) material breaches of pool asset representations or warranties or
transaction covenants (Item 1121(a)(12) of Regulation AB); and
(iii) information regarding any material pool asset changes (such as
additions, substitutions or repurchases) (Item 1121(a)(14) of
Regulation AB).
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01. Distributions. On each Distribution Date, based solely on
the information in the Servicer's Certificate, the Trustee shall distribute
out of the Upper-Tier Certificate Account or the Certificate Account, as
applicable, (to the extent funds are available therein) to each
Certificateholder of record on the related Record Date (other than as
provided in Section 10.01 respecting the final distribution) (a) by check
mailed to such Certificateholder entitled to receive a distribution on such
Distribution Date at the address appearing in the Certificate Register, or
(b) upon written request by the Holder of a Regular Certificate (in the event
such Certificateholder owns of record 100% of a Class of Certificates or
holds Certificates of any Class having denominations aggregating $1,000,000
or more), by wire transfer or by such other means of payment as such
Certificateholder and the Trustee shall agree upon, such Certificateholder's
Percentage Interest in the amount to which the related Class of Certificates
is entitled in accordance with the priorities set forth below in Section 5.02.
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None of the Holders of any Class of Certificates, the Depositor,
the Servicer or the Trustee shall in any way be responsible or liable to
Holders of any Class of Certificates in respect of amounts properly
previously distributed on any such Class.
Amounts distributed with respect to any Class of Certificates
shall be applied first to the distribution of interest thereon and then to
principal thereon.
Section 5.02. Priorities of Distributions.
(a) On each Distribution Date, based solely on the information
contained in the Servicer's Certificate, the Trustee shall withdraw from the
Certificate Account (to the extent funds are available therein) (1) the
amounts payable to the Trustee pursuant to Sections 3.11(b)(i) and
3.11(b)(ii) and shall pay such funds to itself, and (2) the Pool Distribution
Amount, in an amount as specified in written notice received by the Trustee
from the Servicer no later than the related Determination Date, and shall
apply such funds, first, to distributions in respect of the Uncertificated
Lower-Tier Interests as specified in this Section 5.02(a) for deposit in the
Upper-Tier Certificate Account and to the Class A-LR Certificate, and then
from the Upper-Tier Certificate Account to distributions on the Certificates
in the following order of priority and to the extent of such funds:
(i) to each Class of Senior Certificates (other than the Class A-PO and
Class A-LR Certificates), an amount allocable to interest equal to the
Interest Distribution Amount for such Class and any shortfall being
allocated among such Classes in proportion to the amount of the
Interest Distribution Amount that would have been distributed in the
absence of such shortfall;
(ii) concurrently to the Class A Certificates (other than the Class A-PO and
Class A-LR Certificates) and the Class A-PO Certificates, pro rata,
based on their respective Senior Principal Distribution Amount and PO
Principal Amount, (A) to the Class A Certificates (other than the Class
A-PO Certificates), in an aggregate amount up to the Senior Principal
Distribution Amount, such distribution to be allocated among such
Classes in accordance with Section 5.02(b) and (B) to the Class A-PO
Certificates in an aggregate amount up to the PO Principal Amount;
(iii) to the Class A-PO Certificates, any Class A-PO Deferred Amount, up to
the Subordinate Principal Distribution Amount for such Distribution
Date from amounts otherwise distributable first to the Class B-6
Certificates pursuant to clause (iv)(L) below, second to the Class B-5
Certificates pursuant to clause (iv)(J) below, third to the Class B-4
Certificates pursuant to clause (iv)(H) below, fourth to the Class B-3
Certificates pursuant to clause (iv)(F) below, fifth to the Clause B-2
Certificates pursuant to clause (iv)(D) below and finally to the Class
B-1 Certificates pursuant to clause (iv)(B) below;
(iv) to each Class of Subordinate Certificates, subject to paragraph (d)
below, in the following order of priority:
(A) to the Class B-1 Certificates, an amount allocable to interest equal to
the Interest Distribution Amount for such Class for such
Distribution Date;
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(B) to the Class B-1 Certificates, an amount allocable to principal equal
to its Pro Rata Share for such Distribution Date less any amount
used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been
reduced to zero;
(C) to the Class B-2 Certificates, an amount allocable to interest equal to
the Interest Distribution Amount for such Class for such
Distribution Date;
(D) to the Class B-2 Certificates, an amount allocable to principal equal
to its Pro Rata Share for such Distribution Date less any amount
used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been
reduced to zero;
(E) to the Class B-3 Certificates, an amount allocable to interest equal to
the Interest Distribution Amount for such Class for such
Distribution Date;
(F) to the Class B-3 Certificates, an amount allocable to principal equal
to its Pro Rata Share for such Distribution Date less any amount
used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been
reduced to zero;
(G) to the Class B-4 Certificates, an amount allocable to interest equal to
the Interest Distribution Amount for such Class for such
Distribution Date;
(H) to the Class B-4 Certificates, an amount allocable to principal equal
to its Pro Rata Share for such Distribution Date less any amount
used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been
reduced to zero;
(I) to the Class B-5 Certificates, an amount allocable to interest equal to
the Interest Distribution Amount for such Class for such
Distribution Date;
(J) to the Class B-5 Certificates, an amount allocable to principal equal
to its Pro Rata Share for such Distribution Date less any amount
used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been
reduced to zero;
(K) to the Class B-6 Certificates, an amount allocable to interest equal to
the Interest Distribution Amount for such Class for such
Distribution Date; and
(L) to the Class B-6 Certificates, an amount allocable to principal equal
to its Pro Rata Share for such Distribution Date less any amount
used to pay the Class A-PO Deferred Amount pursuant to clause
(iii) above until the Class Certificate Balance thereof has been
reduced to zero; and
(v) to the Holder of the Class A-R Certificate, any amounts remaining in
the Upper-Tier Certificate Account, and to the Holder of the Class A-LR
Certificate, any remaining Pool Distribution Amount.
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On any Distribution Date, amounts distributed in respect of Class
A-PO Deferred Amounts will not reduce the Class Certificate Balance of the
Class A-PO Certificates.
All distributions in respect of the Interest Distribution Amount
for a Class will be applied first with respect to the amount payable pursuant
to clause (i) of the definition of "Interest Distribution Amount," and second
with respect to the amount payable pursuant to clause (ii) of such definition.
On each Distribution Date, each Uncertificated Lower-Tier
Interest shall receive distributions in respect of principal in an amount
equal to the amount of principal distributed to their respective
Corresponding Upper-Tier Class or Classes as provided herein. On each
Distribution Date, each Uncertificated Lower-Tier Interest shall receive
distributions in respect of interest in an amount equal to the Interest
Distribution Amounts in respect of its Corresponding Upper-Tier Class or
Classes, in each case to the extent actually distributed thereon. Such
amounts distributed to the Uncertificated Lower-Tier Interests in respect of
principal and interest with respect to any Distribution Date are referred to
herein collectively as the "Lower-Tier Distribution Amount."
As of any date, the principal balance (or, in the case of the
Class A-LWIO Interest, the notional amount) of each Uncertificated Lower-Tier
Interest equals the aggregate of the Class Certificate Balances of the
respective Corresponding Upper-Tier Class or Classes (or, in the case of the
Class A-WIO Certificates, the Class A-WIO Notional Amount). The initial
principal balance of each Uncertificated Lower-Tier Interest equals the
aggregate of the Initial Class Certificate Balances (or notional amount) of
the respective Corresponding Upper-Tier Class or Classes.
The pass-through rate with respect to the Class A-L1 Interest,
Class A-LUR Interest, Class B-L1 Interest, Class B-L2 Interest, Class B-L3
Interest, Class B-L4 Interest, Class B-L5 Interest and Class B-L6 Interest
shall be % per annum. The pass-through rate with respect to the Class
A-L3 Interest shall be % per annum. The pass-through rate with respect
to the Class A-L4 Interest shall be % per annum. The pass-through rate
with respect to the Class A-LWIO Interest shall be a per annum rate equal to
(i) the weighted average of the Net Mortgage Interest Rates of the Premium
Mortgage Loans (based on the Stated Principal Balance of the Premium Mortgage
Loans on the Due Date in the month preceding the month of such Distribution
Date minus (ii) %. The Class A-LPO Interest is a principal-only
interest and is not entitled to distributions of interest. Any Non-Supported
Interest Shortfalls will be allocated to each Uncertificated Lower-Tier
Interest in the same relative proportions as interest is allocated to such
Uncertificated Lower-Tier Interest.
(b) (i) On each Distribution Date prior to the Senior Credit
Support Depletion Date, the amount distributable to the Class A Certificates
(other than the Class A-PO Certificates) pursuant to Section 5.02(a)(ii) for
such Distribution Date, will be distributed in the following order of
priority:
[To Be Provided]
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On each Distribution Date on or after the Senior Credit Support
Depletion Date, notwithstanding the allocation and priority set forth above,
the portion of the Pool Distribution Amount available to be distributed as
principal of the Class A Certificates (other than the Class A-PO
Certificates) shall be distributed concurrently, as principal, on such
Classes, pro rata, on the basis of their respective Class Certificate
Balances, until the Class Certificate Balances thereof are reduced to zero.
(c) On each Distribution Date, Accrued Certificate Interest for
each Class of Certificates for such Distribution Date shall be reduced by
such Class's pro rata share, based on such Class's Interest Distribution
Amount for such Distribution Date, without taking into account the allocation
made by this Section 5.02(c), of (A) Non-Supported Interest Shortfalls,
(B) any Excess Losses allocable to interest, (C) on and after the Senior
Credit Support Depletion Date, any other Realized Loss allocable to interest
and (D) each Relief Act Reduction incurred during the calendar month
preceding the month of such Distribution Date.
(d) Notwithstanding the priority and allocation contained in
Section 5.02(a)(iv), if with respect to any Class of Subordinate Certificates
on any Distribution Date, (i) the aggregate of the Class Certificate Balances
immediately prior to such Distribution Date of all Classes of Subordinate
Certificates which have a higher numerical Class designation than such Class,
divided by (ii) the aggregate Class Certificate Balance of all the
Certificates (other than the Class A-PO Certificates) immediately prior to
such Distribution Date (the "Fractional Interest") is less than the Original
Fractional Interest for such Class, no distribution of principal will be made
to any Classes junior to such Class (the "Restricted Classes") and the Class
Certificate Balances of the Restricted Classes will not be used in
determining the Pro Rata Share for the Subordinate Certificates that are not
Restricted Classes. Any funds remaining will be distributed in the order
provided in Section 5.02(a)(iv).
Section 5.03. Allocation of Losses.
(a) On or prior to each Determination Date, the Servicer shall
inform the Trustee in writing with respect to each Mortgage Loan: (1) whether
any Realized Loss is a Deficient Valuation or a Debt Service Reduction, (2)
of the amount of such loss or Deficient Valuation, or of the terms of such
Debt Service Reduction and (3) of the total amount of Realized Losses. Based
on such information, the Trustee shall determine the total amount of Realized
Losses with respect to the related Distribution Date.
The principal portion of Realized Losses with respect to any
Distribution Date shall be allocated as follows:
(i) the applicable PO Percentage of the principal portion of any Realized
Loss with respect to a Discount Mortgage Loan shall be allocated to the
Class A-PO Certificates until the Class Certificate Balance thereof is
reduced to zero; and
(ii) the applicable Non-PO Percentage of the principal portion of any
Realized Loss shall be allocated first to the Subordinate Certificates
in reverse order of their respective numerical Class designations
(beginning with the Class of Subordinate Certificates then outstanding
with the highest numerical Class designation) until the respective
Class Certificate Balance of each such Class is reduced to zero, and
second to the Senior Certificates (other than the Class A-PO
Certificates), pro rata, on the basis of their respective Class
Certificate Balances immediately prior to the related Distribution
Date, until the Class Certificate Balances thereof have been reduced to
zero; and
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(b) The Class Certificate Balance of the Class A-PO
Certificates shall be reduced on each Distribution Date by the amount, if
any, by which the Class Certificate Balance of the Class A-PO Certificates
(after giving effect to the amount to be distributed as a distribution of
principal and the allocation of Realized Losses on such Distribution Date)
exceeds the Adjusted Pool Amount (PO Portion) for such Distribution Date.
The Class Certificate Balance of the Class of Subordinate
Certificates then outstanding with the highest numerical Class designation
shall be reduced on each Distribution Date by the amount, if any, by which
the aggregate of the Class Certificate Balances of all outstanding Classes of
Certificates (after giving effect to the amount to be distributed as a
distribution of principal and the allocation of Realized Losses and Class
A-PO Deferred Amounts on such Distribution Date) exceeds the Adjusted Pool
Amount for such Distribution Date.
After the Senior Credit Support Depletion Date, the Class
Certificate Balances of the Senior Certificates in the aggregate (other than
the Class Certificate Balance of the Class A-PO Certificates) shall be
reduced on each Distribution Date by the amount, if any, by which the
aggregate of the Class Certificate Balances of all outstanding Classes of
Senior Certificates (other than Class A-PO Certificates) (after giving effect
to the amount to be distributed as a distribution of principal and the
allocation of Realized Losses on such Distribution Date) exceeds the
difference between (i) the Adjusted Pool Amount for such Distribution Date
and (ii) the Adjusted Pool Amount (PO Portion) for such Distribution Date.
Any such reduction shall be allocated among the Senior
Certificates (other than the Class A-PO Certificates) based on the Class
Certificate Balances immediately prior to such Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or
any reduction in the Class Certificate Balance of a Class of Certificates
pursuant to Section 5.03(b) above shall be allocated among the Certificates
of such Class in proportion to their respective Percentage Interests.
(d) Any allocation of Realized Losses to a Class of
Certificates or any reduction in the Class Certificate Balance of a Class
pursuant to Section 5.03(b) above shall be accomplished by reducing the Class
Certificate Balance thereof prior to the distributions made on the related
Distribution Date in accordance with the definition of "Class Certificate
Balance."
(e) With respect to any Distribution Date, Realized Losses
allocated pursuant to this Section 5.03 will be allocated to each
Uncertificated Lower-Tier Interest in an amount equal to the amount allocated
to its respective Corresponding Upper-Tier Class or Classes as provided above.
Section 5.04. Statements to Certificateholders.
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(a) Prior to the Distribution Date in each month, based upon
the information provided to the Trustee on the Servicer's Certificates
delivered to the Trustee pursuant to Section 4.01, the Trustee shall
determine the following information with respect to such Distribution Date:
(i) the amount allocable to principal, separately identifying the aggregate
amount of any Principal Prepayments and Liquidation Proceeds included
therein;
(ii) the amount allocable to interest, any Class Unpaid Interest Shortfall
included in such distribution and any remaining Class Unpaid Interest
Shortfall after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of Certificates is
less than the full amount that would be distributable to such Holders
if there were sufficient funds available therefor, the amount of the
shortfall and the allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of Certificates after
giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution Date;
(vi) the Senior Percentage, the Priority Percentage and the Subordinate
Percentage for the following Distribution Date;
(vii) the amount of the Servicing Fee paid to or retained by the Servicer
with respect to such Distribution Date;
(viii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(ix) the amount of Periodic Advances included in the distribution on such
Distribution Date and the aggregate amount of Periodic Advances
outstanding as of the close of business on such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage Loans (A)
delinquent (exclusive of Mortgage Loans in foreclosure) (1) 1 to 30
days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days and
(B) in foreclosure, as of the close of business on the last day of the
calendar month preceding such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO Property during
the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xii) the total number and principal balance of any REO Properties (and
market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
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(xiii) the Senior Prepayment Percentage and the Subordinate Prepayment
Percentage for the following Distribution Date;
(xiv) the aggregate amount of Realized Losses incurred during the preceding
calendar month or any Class A-PO Deferred Amounts for such Distribution
Date.
(xv) in the case of the Class A-5 Certificates, the Class A-5 Notional
Amount;
(xvi) in the case of the Class A-WIO Certificates, the Class A-WIO Notional
Amount for such Distribution Date.
(b) No later than each Distribution Date, the Trustee, based
upon information supplied to it on the Servicer's Certificates, shall prepare
and deliver (by mail, fax or electronically) to each Holder of a Certificate,
each Rating Agency and the Servicer a statement setting forth the information
set forth in Section 5.04(a).
In the case of information furnished pursuant to clauses (i),
(ii) and (ix) of Section 5.04(a), the amounts shall be expressed as a dollar
amount per Certificate with a $1,000 denomination.
On each Distribution Date, the Trustee shall prepare and furnish
to each Financial Market Service, in electronic or such other format and
media mutually agreed upon by the Trustee, the Financial Market Service and
the Depositor, the information contained in the statement described in
Section 5.04(a) for such Distribution Date.
The Trustee shall make available on the Internet each month, to
any interested party, the monthly statement to Certificateholders and each of
the reports filed with the Commission by or on behalf of the Depositor under
the 1934 Act with respect to the Certificates as soon as reasonably
practicable after the applicable filing date via the Trustee's website.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall furnish to each Person who at any time during the
calendar year was the Holder of a Certificate, if requested in writing by
such Person, a statement containing the information set forth in clauses (i),
(ii) and (vii) of Section 5.04(a), in each case aggregated for such calendar
year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be provided by the Trustee pursuant to any requirements of the Code as from
time to time in force.
The Trustee shall deliver to the Holders of Certificates any
reports or information the Trustee is required by this Agreement or the Code,
Treasury Regulations or REMIC Provisions to deliver to the Holders of
Certificates, and the Trustee shall prepare and provide to the
Certificateholders (by mail, telephone, or publication as may be permitted by
applicable Treasury Regulations) such other reasonable information as the
Trustee deems necessary or appropriate or is required by the Code, Treasury
Regulations, and the REMIC Provisions including, but not limited to, (i)
information to be reported to the Holders of the Residual Certificates for
quarterly notices on Schedule Q (Form 1066) (which information shall be
forwarded to the Holders of the Residual Certificates by the Trustee), (ii)
information to be provided to the Holders of Certificates with respect to
amounts which should be included as interest and original issue discount in
such Holders' gross income and (iii) information to be provided to all
Holders of Certificates setting forth the percentage of each REMIC's assets,
determined in accordance with Treasury Regulations using a convention, not
inconsistent with Treasury Regulations, selected by the Trustee in its
absolute discretion, that constitute real estate assets under Section 856 of
the Code, and assets described in Section 7701(a)(19)(C) of the Code;
provided, however, that in setting forth the percentage of such assets of
each REMIC, nothing contained in this Agreement, including without limitation
Section 7.03 hereof, shall be interpreted to require the Trustee periodically
to appraise the fair market values of the assets of the Trust Estate or to
indemnify the Trust Estate or any Certificateholders from any adverse
federal, state or local tax consequences associated with a change
subsequently required to be made in the Depositor's initial good faith
determinations of such fair market values (if subsequent determinations are
required pursuant to the REMIC Provisions) made from time to time.
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Section 5.05. Tax Returns and Reports to Certificateholders.
(a) For federal income tax purposes, each REMIC shall have a
calendar year taxable year and shall maintain its books on the accrual method
of accounting.
(b) The Trustee shall prepare or cause to be prepared, shall
execute and shall file or cause to be filed with the Internal Revenue Service
and applicable state or local tax authorities income tax information returns
for each taxable year with respect to each REMIC containing such information
at the times and in the manner as may be required by the Code, the Treasury
Regulations or state or local tax laws, regulations, or rules, and shall
furnish or cause to be furnished to each REMIC and the Certificateholders the
schedules, statements or information at such times and in such manner as may
be required thereby. Within 30 days of the Closing Date, the Trustee shall
furnish or cause to be furnished to the Internal Revenue Service, on Form
8811 or as otherwise required by the Code or the Treasury Regulations, the
name, title, address and telephone number of the person that Holders of the
Certificates may contact for tax information relating thereto, together with
such additional information at the time or times and in the manner required
by the Code or the Treasury Regulations. Such federal, state, or local
income tax or information returns shall be signed by the Trustee, or such
other Person as may be required to sign such returns by the Code, the
Treasury Regulations or state or local tax laws, regulations, or rules.
(c) In the first federal income tax return of each REMIC for
its short taxable year ending December 31, 200 , REMIC status shall be
elected for such taxable year and all succeeding taxable years.
(d) The Trustee will maintain or cause to be maintained such
records relating to each REMIC, including but not limited to records relating
to the income, expenses, assets and liabilities of the Trust Estate, and the
initial fair market value and adjusted basis of the Trust Estate property and
assets determined at such intervals as may be required by the Code or the
Treasury Regulations, as may be necessary to prepare the foregoing returns,
schedules, statements or information.
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Section 5.06. Tax Matters Person. The Tax Matters Person shall have the
same duties with respect to each REMIC as those of a "tax matters partner"
under Subchapter C of Chapter 63 of Subtitle F of the Code. The Holder of
the Class A-R Certificate is hereby designated as the Tax Matters Person for
the Upper-Tier REMIC. The Holder of the Class A-LR Certificate is hereby
designated as the Tax Matters Person for the Lower-Tier REMIC. By their
acceptance of the Class A-R or Class A-LR Certificate, as applicable, each
such Holder irrevocably appoints the Trustee as its agent to perform all of
the duties of the Tax Matters Person for the Upper-Tier REMIC and the
Lower-Tier REMIC.
Section 5.07. Rights of the Tax Matters Person in Respect of the
Trustee. The Trustee shall afford the Tax Matters Person, upon reasonable
notice during normal business hours, access to all records maintained by the
Trustee in respect of its duties hereunder and access to officers of the
Trustee responsible for performing such duties. Upon request, the Trustee
shall furnish the Tax Matters Person with its most recent report of condition
published pursuant to law or to the requirements of its supervisory or
examining authority publicly available. The Trustee shall make available to
the Tax Matters Person such books, documents or records relating to the
Trustee's services hereunder as the Tax Matters Person shall reasonably
request. The Tax Matters Person shall not have any responsibility or
liability for any action or failure to act by the Trustee and is not
obligated to supervise the performance of the Trustee under this Agreement or
otherwise.
Section 5.08. REMIC Related Covenants. For as long as the Trust shall
exist, the Trustee, the Depositor and the Servicer shall act in accordance
herewith to assure continuing treatment of the Upper-Tier REMIC and the
Lower-Tier REMIC as REMICs and avoid the imposition of tax on either REMIC.
In particular:
(a) The Trustee shall not create, or permit the creation of,
any "interests" in either REMIC within the meaning of Code Section 860D(a)(2)
other than the interests represented by the Regular Certificates, the
Residual Certificates and the Uncertificated Lower-Tier Interests.
(b) Except as otherwise provided in the Code, (i) the Depositor
and the Servicer shall not contribute to the Trust Estate and the Trustee
shall not accept property unless substantially all of the property held in
each REMIC constitutes either "qualified mortgages" or "permitted
investments" as defined in Code Sections 860G(a)(3) and (5), respectively,
and (ii) no property shall be contributed to each REMIC after the start-up
day unless such contribution would not subject the Trust Estate to the 100%
tax on contributions to a REMIC after the start-up day of the REMIC imposed
by Code Section 860G(d).
(c) The Trustee shall not accept on behalf of either REMIC any
fee or other compensation for services and neither the Trustee nor the
Servicer shall knowingly accept, on behalf of the Trust Estate any income
from assets other than those permitted to be held by a REMIC.
(d) The Trustee shall not sell or permit the sale of all or any
portion of the Mortgage Loans (other than in accordance with Sections 2.02,
2.04 or 3.14(b)), unless such sale is pursuant to a "qualified liquidation"
of the applicable REMIC as defined in Code Section 860F(a)(4)(A) and in
accordance with Article X.
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(e) The Trustee shall maintain books with respect to the Trust
and each REMIC on a calendar year taxable year and on an accrual basis.
Neither the Servicer nor the Trustee shall engage in a
"prohibited transaction" (as defined in Code Section 860F(a)(2)), except
that, with the prior written consent of the Servicer and the Depositor, the
Trustee may engage in the activities otherwise prohibited by the foregoing
paragraphs (b), (c) and (d); provided that the Servicer shall have delivered
to the Trustee an Opinion of Counsel to the effect that such transaction will
not result in the imposition of a tax on either REMIC and will not disqualify
the Trust Estate from treatment as two REMICs; and, provided further, that
the Servicer shall have demonstrated to the satisfaction of the Trustee that
such action will not adversely affect the rights of the Holders of the
Certificates and the Trustee and that such action will not adversely impact
the rating of the Certificates.
Section 5.09. Determination of LIBOR. On each Rate Determination Date
for a Class of LIBOR Certificates, the Trustee shall determine LIBOR for the
applicable Distribution Date on the basis of the British Bankers' Association
("BBA") "Interest Settlement Rate" for one-month deposits in U.S. Dollars as
found on Telerate page 3750 as of 11:00 A.M. London time on such Rate
Determination Date. As used herein, "Telerate page 3750" means the display
designated as page 3750 on the Bridge Telerate Service.
If on any Rate Determination Date for a Class of LIBOR
Certificates, the Trustee is unable to determine LIBOR on the basis of the
method set forth in the preceding paragraph, LIBOR for the applicable
Distribution Date will be whichever is higher of (x) LIBOR as determined on
the previous Rate Determination Date for such Class of LIBOR Certificates or
(y) the Reserve Interest Rate. The "Reserve Interest Rate" will be the rate
per annum which the Trustee determines to be either (A) the arithmetic mean
(rounding such arithmetic mean upwards if necessary to the nearest whole
multiple of 1/16%) of the one-month U.S. Dollar lending rates that New York
City banks selected by the Trustee are quoting, on the relevant Rate
Determination Date, to the principal London offices of at least two leading
banks in the London interbank market or (B) in the event that the Trustee can
determine no such arithmetic mean, the lowest one-month U.S. Dollar lending
rate that the New York City banks selected by the Trustee are quoting on such
Rate Determination Date to leading European banks.
If on any Rate Determination Date for a Class of LIBOR
Certificates, the Trustee is required but is unable to determine the Reserve
Interest Rate in the manner provided in the preceding paragraph, LIBOR for
the applicable Distribution Date will be LIBOR as determined on the previous
Rate Determination Date for such Class of LIBOR Certificates, or, in the case
of the first Rate Determination Date, % per annum.
The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the rates of interest applicable to each of the
LIBOR Certificates in the absence of manifest error, will be final and
binding. After a Rate Determination Date, the Trustee shall provide the
Pass-Through Rates of the LIBOR Certificates for the related Distribution
Date to Beneficial Owners or Holders of LIBOR Certificates who place a
telephone call to the Trustee at and make a request therefor.
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ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates. The Classes of Senior Certificates and
the Subordinate Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, A-PO, A-WIO, A-R, A-LR, ▇-▇, ▇-▇, ▇-▇,
▇-▇, ▇-▇, B-6 and C (reverse of all Certificates) and shall, on original
issue, be executed by the Trustee and shall be countersigned and delivered by
the Trustee to or upon the order of the Depositor upon receipt by the Trustee
of the documents specified in Section 2.01. The Senior Certificates (other
than the Class A-PO, Class A-WIO and Class A-R Certificates) shall be
available to investors in interests representing minimum dollar Certificate
Balances (or notional amounts) of $ and integral multiples of $ in
excess thereof. The Class A-WIO Certificates shall be available to investors
in interests representing minimum dollar Certificate Balances of $ and
integral multiples of $ in excess thereof. The Subordinate Certificates
and the Class A-PO Certificates shall be available to investors in interests
representing minimum dollar Certificate Balances of $ and integral
dollar multiples of $ in excess thereof (except one Certificate of such
Class may be issued with a different Certificate Balance. The Class A-R and
Class A-LR Certificates shall be in a minimum denomination of $ . The
Senior Certificates (other than the Class A-R and Class A-LR Certificates)
and the Class B-1, Class B-2 and Class B-3 Certificates shall initially be
issued in book-entry form through the Depository and delivered to the
Depository or, pursuant to the Depository's instructions on behalf of the
Depository to, and deposited with, the Certificate Custodian, and all other
Classes of Certificates shall initially be issued in definitive,
fully-registered form.
The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer or signatory.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
execution and delivery of such Certificates or did not hold such offices or
positions at the date of such Certificate. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless such
Certificate shall have been manually countersigned by the Trustee
substantially in the form provided for herein, and such countersignature upon
any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their countersignature.
Section 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at an office or agency
in the city in which the Corporate Trust Office of the Trustee is located a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. The
Trustee shall initially serve as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as
herein provided.
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(b) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of a like
Class, tenor and aggregate Percentage Interest, upon surrender of the
Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
the Trustee shall authenticate, countersign and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive.
Every Certificate presented or surrendered for transfer or exchange shall (if
so required by the Trustee or the Certificate Registrar) be duly endorsed by,
or be accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or its attorney duly authorized in writing.
(c) (i) Except as provided in paragraph (c)(iii) below, the
Book-Entry Certificates shall at all times remain registered in the name of
the Depository or its nominee and at all times: (A) registration of the
Certificates may not be transferred by the Trustee except to another
Depository; (B) the Depository shall maintain book-entry records with respect
to the Certificate Owners and with respect to ownership and transfers of such
Book-Entry Certificates; (C) ownership and transfers of registration of the
Book-Entry Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (D) the Depository may
collect its usual and customary fees, charges and expenses from its
Depository Participants; (E) the Trustee shall deal with the Depository as
the representative of the Certificate Owners of the Book-Entry Certificates
for purposes of exercising the rights of Holders under this Agreement, and
requests and directions for and votes of the Depository shall not be deemed
to be inconsistent if they are made with respect to different Certificate
Owners; and (F) the Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
(ii) All transfers by Certificate Owners of Book-Entry
Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall
only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
(iii) If (A) (1) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (2) the
Trustee or the Depositor is unable to locate a qualified successor,
(B) the Depositor at its option advises the Trustee in writing that it
elects to terminate the book-entry system through the Depository or (C)
after the occurrence of an Event of Default, Certificate Owners
representing at least 51% of the aggregate Class Certificate Balances
of the Book-Entry Certificates together advise the Trustee and the
Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer
in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the
occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee
of the related Class of Certificates by the Depository (or by the
Certificate Custodian, if it holds such Class on behalf of the
Depository), accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates.
None of the Servicer, the Depositor or the Trustee shall be liable for
any delay in delivery of such instruction and may conclusively rely on,
and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon
the issuance of Definitive Certificates, the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders
hereunder.
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(d) No transfer of a Private Certificate shall be made unless
such transfer is exempt from the registration requirements of the 1933 Act
and any applicable state securities laws or is made in accordance with the
1933 Act and such laws. In the event of any such transfer, (i) unless such
transfer is made in reliance on Rule 144A under the 1933 Act, the Trustee or
the Depositor may require a written Opinion of Counsel (which may be in-house
counsel) acceptable to and in form and substance reasonably satisfactory to
the Trustee and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
the 1933 Act and such laws or is being made pursuant to the 1933 Act and such
laws, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor and (ii) the Trustee shall require a certificate from the
Certificateholder desiring to effect such transfer substantially in the form
attached hereto as Exhibit G-1 and a certificate from such
Certificateholder's prospective transferee substantially in the form attached
hereto either as Exhibit G-2A or as Exhibit G-2B, which certificates shall
not be an expense of the Trustee or the Depositor; provided that the
foregoing requirements under clauses (i) and (ii) shall not apply to a
transfer of a Private Certificate between or among the Depositor, the Seller,
their affiliates or both. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferees designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such certificate
without registration thereof under the 1933 Act pursuant to the registration
exemption provided by Rule 144A. The Holder of a Private Certificate
desiring to effect such transfer shall, and does hereby agree to, indemnify
the Trustee and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
(e) No transfer of an ERISA Restricted Certificate shall be
made unless the transferee delivers to the Trustee either (i) a
representation letter in the form of Exhibit H from the transferee of such
Certificate, which representation letter shall not be an expense of the
Depositor, the Trustee or the Servicer, or (ii) in the case of any ERISA
Restricted Certificate presented for registration in the name of an employee
benefit plan or arrangement, including an individual retirement account,
subject to ERISA, the Code, or any federal, state or local law ("Similar
Law") which is similar to ERISA or the Code (collectively, a "Plan"), or a
trustee or custodian of any of the foregoing, an Opinion of Counsel in form
and substance satisfactory to the Trustee and the Servicer to the effect that
the purchase or holding of such ERISA Restricted Certificate by or on behalf
of such Plan will not result in the assets of the Trust Estate being deemed
to be "plan assets" and subject to the prohibited transaction provisions of
ERISA, the Code or Similar Law and will not subject the Trustee, the
Depositor or the Servicer to any obligation in addition to those undertaken
in this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee or the Servicer. Any transferee of an ERISA Restricted Certificate
that does not comply with either clause (i) or (ii) of the preceding sentence
will be deemed to have made one of the representations set forth in Exhibit
H. Notwithstanding anything else to the contrary herein, any purported
transfer of an ERISA Restricted Certificate to or on behalf of a Plan without
the delivery to the Trustee and the Servicer of an Opinion of Counsel
satisfactory to the Trustee and the Servicer as described above shall be void
and of no effect.
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Neither the Trustee nor the Certificate Registrar shall have any
liability for transfers of Book-Entry Certificates made through the
book-entry facilities of the Depository or between or among any Depository
Participants or Certificate Owners, made in violation of applicable
restrictions. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and Persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA Restricted Certificate that is in
fact not permitted by this Section 6.02 or for making any payments due on
such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Trustee in accordance with the foregoing
requirements.
(f) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
a Residual Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Residual
Certificate shall be a Permitted Transferee and shall promptly notify
the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Residual Certificate
unless such Ownership Interest is a pro rata undivided interest.
(iii) In connection with any proposed transfer of any Ownership Interest in a
Residual Certificate, the Trustee shall require delivery to it, in form
and substance satisfactory to it, of an affidavit in the form of
Exhibit I hereto from the proposed transferee.
(iv) Notwithstanding the delivery of an affidavit by a proposed transferee
under clause (iii) above, if a Responsible Officer of the Trustee has
actual knowledge that the proposed transferee is not a Permitted
Transferee, no transfer of any Ownership Interest in a Residual
Certificate to such proposed transferee shall be effected.
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(v) No Ownership Interest in a Residual Certificate may be purchased by or
transferred to any Person that is not a U.S. Person, unless (A) such
Person holds such Residual Certificate in connection with the conduct
of a trade or business within the United States and furnishes the
transferor and the Trustee with an effective Internal Revenue Service
Form W-8ECI (or successor thereto) or (B) the transferee delivers to
both the transferor and the Trustee an Opinion of Counsel from a
nationally-recognized tax counsel to the effect that such transfer is
in accordance with the requirements of the Code and the regulations
promulgated thereunder and that such transfer of a Residual Certificate
will not be disregarded for federal income tax purposes.
(vi) Any attempted or purported transfer of any Ownership Interest in a
Residual Certificate in violation of the provisions of this Section
6.02 shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation
of the provisions of this Section 6.02, become a Holder of a Residual
Certificate, then the prior Holder of such Residual Certificate that is
a Permitted Transferee shall, upon discovery that the registration of
transfer of such Residual Certificate was not in fact permitted by this
Section 6.02, be restored to all rights as Holder thereof retroactive
to the date of registration of transfer of such Residual Certificate.
The Trustee shall be under no liability to any Person for any
registration of transfer of a Residual Certificate that is in fact not
permitted by this Section 6.02 or for making any distributions due on
such Residual Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of the
Agreement so long as the transfer was registered in accordance with
this Section 6.02. The Trustee shall be entitled to recover from any
Holder of a Residual Certificate that was in fact not a Permitted
Transferee at the time such distributions were made all distributions
made on such Residual Certificate. Any such distributions so recovered
by the Trustee shall be distributed and delivered by the Trustee to the
prior Holder of such Residual Certificate that is a Permitted
Transferee.
(vii) If any Person other than a Permitted Transferee acquires any Ownership
Interest in a Residual Certificate in violation of the restrictions in
this Section 6.02, then the Trustee, based on information provided to
the Trustee by the Servicer, will provide to the Internal Revenue
Service, and to the Persons specified in Section 860E(e)(3) and (6) of
the Code, information needed to compute the tax imposed under Section
860E(e) of the Code on transfers of residual interests to disqualified
organizations. The expenses of the Trustee under this clause (vii)
shall be reimbursable by the Trust.
(viii) No Ownership Interest in a Residual Certificate shall be acquired
by a Plan or any Person acting on behalf of a Plan.
(g) [Reserved]
(h) No service charge shall be imposed for any transfer or
exchange of Certificates of any Class, but the Trustee may require payment of
a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
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(i) All Certificates surrendered for transfer and exchange
shall be destroyed by the Certificate Registrar.
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate is surrendered to the Certificate Registrar or the
Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate, and (b) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity reasonably satisfactory to each, to save each of them harmless,
then, in the absence of actual notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor, Class and Percentage Interest but bearing a number not
contemporaneously outstanding. Upon the issuance of any new Certificate
under this Section, the Trustee may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at
any time.
Section 6.04. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Depositor, the Servicer, the
Trustee, the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee or the Certificate Registrar may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.01 and for all
other purposes whatsoever, and none of the Depositor, the Servicer, the
Trustee, the Certificate Registrar or any agent of the Servicer, the Trustee
or the Certificate Registrar shall be affected by notice to the contrary.
ARTICLE VII
THE DEPOSITOR AND THE SERVICER
Section 7.01. Respective Liabilities of the Depositor and the Servicer.
The Depositor and the Servicer shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed
upon and undertaken by the Depositor and the Servicer herein. By way of
illustration and not limitation, the Depositor is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Section 8.01 to assume any obligations of the Servicer or to appoint a
designee to assume such obligations, nor is it liable for any other
obligation hereunder that it may, but is not obligated to, assume unless it
elects to assume such obligation in accordance herewith.
Section 7.02. Merger or Consolidation of the Depositor or the Servicer.
The Depositor and the Servicer will each keep in full effect its existence,
rights and franchises as a separate entity under the laws governing its
organization, and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage
Loans and to perform its respective duties under this Agreement.
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Any Person into which the Depositor or the Servicer may be merged
or consolidated, or any corporation or other organization resulting from any
merger or consolidation to which the Depositor or the Servicer shall be a
party, or any Person succeeding to the business of the Depositor or the
Servicer, shall be the successor of the Depositor or the Servicer, as the
case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor or surviving
Person to the Servicer shall be qualified to service mortgage loans on behalf
of FNMA or FHLMC.
Section 7.03. Limitation on Liability of the Depositor, the Servicer and
Others. None of the Depositor, the Servicer or any of the directors,
officers, employees or agents of the Depositor or of the Servicer shall be
under any liability to the Trust Estate or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Depositor, the Servicer or any such
Person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Depositor, the
Servicer and any director, officer, employee or agent of the Depositor or the
Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Servicer and any director, officer, employee
or agent of the Depositor or the Servicer shall be indemnified by the Trust
Estate and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any
specific Mortgage Loan or Mortgage Loans (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) and
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither of the
Depositor nor the Servicer shall be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its
respective duties under this Agreement and which in its opinion may involve
it in any expense or liability; provided, however, that the Depositor or the
Servicer may in its discretion undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder.
In such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust
Estate, and the Depositor and the Servicer shall be entitled to be reimbursed
therefor out of amounts attributable to the Mortgage Loans on deposit in the
Servicer Custodial Account as provided by Section 3.11.
Section 7.04. Depositor and Servicer Not to Resign. Subject to the
provisions of Section 7.02, neither the Depositor nor the Servicer shall
resign from its respective obligations and duties hereby imposed on it except
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination permitting the resignation of the
Depositor or the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation by the Servicer shall
become effective until the Trustee or a successor Servicer shall have assumed
the Servicer's responsibilities and obligations in accordance with Section
8.05 hereof.
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ARTICLE VIII
DEFAULT
Section 8.01. Events of Default. If any one of the following events
("Events of Default") shall occur and be continuing:
(a) any failure by the Servicer to deposit amounts in the
Servicer Custodial Account in the amount and manner provided herein so as to
enable the Trustee to distribute to Holders of Certificates any payment
required to be made under the terms of such Certificates and this Agreement
(other than the payments required to be made under Section 3.18) which
continues unremedied for a period of five days; or
(b) failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in the Certificates or in this Agreement, which covenants
and agreements continue unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee or the Depositor, or to
the Servicer, the Depositor and the Trustee by the Holders of Certificates
evidencing Voting Rights aggregating not less than 25% of all Certificates
affected thereby; or
(c) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the appointment
of a conservator, receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings against
the Servicer, or for the winding up or liquidation of the Servicer's affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(d) the consent by the Servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to substantially all of its
property; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations;
or
(e) the failure of the Servicer to remit any Periodic Advance
required to be remitted by the Servicer pursuant to Section 3.18 which
failure continues unremedied at 3:00 p.m. on the related Distribution Date;
then, and in each and every such case, so long as an Event of Default shall
not have been remedied by the Servicer, either the Trustee or the Depositor
may, and at the direction of the Holders of Certificates evidencing Voting
Rights aggregating not less than 51% of all Certificates affected thereby
shall, by notice then given in writing to the Servicer (and to the Trustee,
if given by the Depositor, and to the Depositor, if given by the Trustee),
terminate all of the rights and obligations of the Servicer under this
Agreement. If an Event of Default described in clause (e) hereof shall
occur, the Trustee shall, by notice to the Servicer, terminate all of the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and proceeds thereof and the Trustee or a successor Servicer
appointed pursuant to Section 8.05 shall make the Advance which the Servicer
failed to make. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Certificates or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee pursuant to and under this Section 8.01,
unless and until such time as the Trustee shall appoint a successor Servicer
pursuant to Section 8.05, and, without limitation, the Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer,
as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Mortgage Loans and related
documents, or otherwise, including, without limitation, the recordation of
the assignments of the Mortgage Loans to it. The Servicer agrees to cooperate
with the Trustee in effecting the termination of the responsibilities and
rights of the Servicer hereunder, including, without limitation, the transfer
to the Trustee for the administration by it of all cash amounts that have
been deposited by the Servicer in the Servicer Custodial Account or
thereafter received by the Servicer with respect to the Mortgage Loans. Upon
obtaining notice or knowledge of the occurrence of any Event of Default, the
Person obtaining such notice or knowledge shall give prompt written notice
thereof to Certificateholders at their respective addresses appearing in the
Certificate Register and to each Rating Agency. All costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Mortgage Files to the successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section 8.01 shall be
paid by the predecessor Servicer. Notwithstanding the termination of the
Servicer pursuant hereto, the Servicer shall remain liable for any causes of
action arising out of any Event of Default occurring prior to such
termination.
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Section 8.02. Remedies of Trustee. During the continuance of any Event
of Default, so long as such Event of Default shall not have been remedied,
the Trustee, in addition to the rights specified in Section 8.01, shall have
the right, in its own name as trustee of an express trust, to take all
actions now or hereafter existing at law, in equity or by statute to enforce
its rights and remedies and to protect the interests, and enforce the rights
and remedies, of the Certificateholders (including the institution and
prosecution of all judicial, administrative and other proceedings and the
filing of proofs of claim and debt in connection therewith). Except as
otherwise expressly provided in this Agreement, no remedy provided for by
this Agreement shall be exclusive of any other remedy, and each and every
remedy shall be cumulative and in addition to any other remedy and no delay
or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
Section 8.03. Directions by Certificateholders and Duties of Trustee
During Event of Default. During the continuance of any Event of Default,
Holders of Certificates evidencing Voting Rights aggregating not less than
25% of each Class of Certificates affected thereby may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under
this Agreement; provided, however, that the Trustee shall be under no
obligation to pursue any such remedy, or to exercise any of the trusts or
powers vested in it by this Agreement (including, without limitation, (a) the
conducting or defending of any administrative action or litigation hereunder
or in relation hereto, and (b) the terminating of the Servicer or any
successor Servicer from its rights and duties as servicer hereunder) at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby and, provided further, that, subject to the provisions of
Section 9.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee, based upon an Opinion of Counsel, determines that
the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith determines that the action or proceeding so directed
would involve it in personal liability or be unjustly prejudicial to the
non-assenting Certificateholders.
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Section 8.04. Action upon Certain Failures of the Servicer and upon Event
of Default. In the event that the Trustee shall have actual knowledge of any
failure of the Servicer specified in Section 8.01(a) or (b) which would
become an Event of Default upon the Servicer's failure to remedy the same
after notice, the Trustee shall give notice thereof to the Servicer. If the
Trustee shall have knowledge of an Event of Default, the Trustee shall give
prompt written notice thereof to the Certificateholders.
Section 8.05. Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.01, the Trustee shall be the successor in
all respects to the Servicer in its capacity as servicer under this Agreement
and the transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto placed on
the Servicer by the terms and provisions hereof or shall appoint a successor
pursuant to Section 3.07. Notwithstanding anything provided herein to the
contrary, under no circumstances shall any provision of this Agreement be
construed to require the Trustee, acting in its capacity as successor to the
Servicer in its obligation to make Advances, to advance, expend or risk its
own funds or otherwise incur any financial liability in the performance of
its duties hereunder if it shall have reasonable grounds for believing that
such funds are non-recoverable. Subject to Section 8.05(b), as compensation
therefor, the Trustee shall be entitled to such compensation as the
terminated Servicer would have been entitled to hereunder if no such notice
of termination had been given. Notwithstanding the above, the Trustee may,
if it shall be unwilling so to act, or shall, if it is legally unable so to
act, appoint, or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution having a net worth of not
less than $10,000,000 as the successor to the terminated Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder; provided, however, that any such
institution appointed as successor Servicer shall not, as evidenced in
writing by each Rating Agency, adversely affect the then current rating of
any Class of Certificates immediately prior to the termination of the
terminated Servicer. The appointment of a successor Servicer shall not
affect any liability of the predecessor Servicer which may have arisen under
this Agreement prior to its termination as Servicer, nor shall any successor
Servicer be liable for any acts or omissions of the predecessor Servicer or
for any breach by the Servicer of any of its representations or warranties
contained herein or in any related document or agreement. Pending
appointment of a successor to the terminated Servicer hereunder, unless the
Trustee is prohibited by law from so acting, the Trustee shall act in such
capacity as provided above. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate
any such succession.
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(b) In connection with the appointment of a successor Servicer
or the assumption of the duties of the Servicer, as specified in Section
8.05(a), the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans serviced by the predecessor
Servicer as it and such successor shall agree; provided, however, that any
Person assuming the duties of the Servicer shall pay to such predecessor an
amount equal to the market value of the portion of the Servicing Fee that
will accrue in the future due to the Servicing Fee Rate exceeding % per
annum with respect to any Mortgage Loan. The "market value" of such portion
of the Servicing Fee shall be determined by , on the basis of at least
two quotations from third parties actively engaged in the servicing of
single-family mortgage loans. If the successor Servicer does not agree that
such market value is a fair price, such successor shall obtain two quotations
of market value from third parties actively engaged in the servicing of
single-family mortgage loans. The market value of the excess portion of the
Servicing Fee will then be equal to the average of (i) the lowest figure
obtained by , and (ii) the highest figure obtained by the successor
Servicer. Payment of the amount calculated above shall be made to , by
the successor Servicer no later than the last Business Day of the month in
which such successor Servicer becomes entitled to receive the Servicing Fee
under this Agreement. In no event will any portion of the Trust Estate be
used to pay amounts due to under this Section 8.05(b).
(c) Any successor, including the Trustee, to the Servicer as
servicer shall during the term of its service as servicer maintain in force
(i) a policy or policies of insurance covering errors and omissions in the
performance of its obligations as servicer hereunder and (ii) a fidelity bond
in respect of its officers, employees and agents to the same extent as the
Servicer is so required pursuant to Section 3.03.
Section 8.06. Notification to Certificateholders. Upon any termination
or appointment of a successor to the Servicer pursuant to this Article VIII,
the Trustee shall give prompt written notice thereof to Certificateholders at
their respective addresses appearing in the Certificate Register and to each
Rating Agency.
ARTICLE IX
THE TRUSTEE
Section 9.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred of which a Responsible Officer of the Trustee shall have actual
knowledge (which has not been cured or waived), the Trustee shall exercise
such of the rights and powers vested in it by this Agreement, and use the
same degree of care and skill in their exercise as a reasonably prudent
investor would exercise or use under the circumstances in the conduct of such
investor's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement.
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(b) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own grossly negligent action, its
own grossly negligent failure to act or its own willful misfeasance;
provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the curing or
waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee by the Depositor or the Servicer and
which on their face, do not contradict the requirements of this
Agreement;
(ii) The Trustee (in its individual capacity) shall not be personally liable
for an error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was grossly negligent in ascertaining the pertinent facts;
(iii) The Trustee (in its individual capacity) shall not be personally liable
with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with the direction of Certificateholders as
provided in Section 8.03;
(iv) The Trustee shall not be charged with knowledge of any default (other
than a default in payment to the Trustee) specified in clauses (a) and
(b) of Section 8.01 or an Event of Default under clauses (c), (d) and
(e) of Section 8.01 unless a Responsible Officer of the Trustee
assigned to and working in the Corporate Trust Office obtains actual
knowledge of such failure or event or any officer of the Trustee
receives written notice of such failure or event at its Corporate Trust
Office from the Servicer, the Depositor or any Certificateholder; and
(v) Except to the extent provided in Section 8.05, no provision in this
Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance as successor
Servicer) or otherwise incur any personal financial liability in the
performance of any of its duties as Trustee hereunder, or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that repayment of funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
Section 9.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 9.01:
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(i) The Trustee may request and rely upon and shall be protected in acting
or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel shall
be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and
in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the trusts
or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default (which
has not been cured or waived), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent investor would exercise
or use under the circumstances in the conduct of such investor's own
affairs;
(iv) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after the
curing or waiving of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by
Holders or Certificate or any Class evidencing, as to such Class,
Percentage Interests, aggregating not less than 50%; provided, however,
that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability or payment of such estimated expenses
as a condition to so proceeding; and
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.
Section 9.03. Trustee Not Liable for Certificates or Mortgage Loans. The
recitals contained herein and in the Certificates (other than the execution
of, and the counter-signature on the Certificates) shall be taken as the
statements of the Depositor or Servicer, as applicable, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or any Mortgage Loans save that the Trustee represents that,
assuming due execution and delivery by the other parties hereto, this
Agreement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms, subject, as to enforcement of remedies, to
applicable insolvency, receivership, moratorium and other laws affecting the
rights of creditors generally, and to general principles of equity and the
discretion of the court (regardless of whether enforcement of such remedies
is considered in a proceeding in equity or at law). The Trustee shall not be
accountable for the use or application by the Depositor of funds paid to the
Depositor in consideration of the assignment of the Mortgage Loans hereunder
by the Depositor, or for the use or application of any funds paid to
Subservicers or the Servicer in respect of the Mortgage Loans or deposited
into the Servicer Custodial Account, or any other account hereunder (other
than the Certificate Account) by the Servicer.
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The Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any
Mortgage or any Mortgage Loan, or the perfection and priority of any Mortgage
or the maintenance of any such perfection and priority or for or with respect
to the sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than
if the Trustee shall assume the duties of the Servicer pursuant to Section
8.05 and thereupon only for the acts or omissions of the successor Servicer);
the validity of the assignment of any Mortgage Loan to the Trustee or of any
intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee
shall assume the duties of the Servicer pursuant to Section 8.05 and
thereupon only for the acts or omissions of the Trustee as successor
Servicer); the compliance by the Depositor or the Servicer with any warranty
or representation made under this Agreement or in any related document or the
accuracy of any such warranty or representation; any investment of monies by
or at the direction of the Servicer or any loss resulting therefrom, it being
understood that the Trustee shall remain responsible for any Trust property
that it may hold in its individual capacity; the acts or omissions of any of
the Depositor, the Servicer (other than if the Trustee shall assume the
duties of the Servicer pursuant to Section 8.05 and thereupon only for the
acts or omissions of the Trustee as successor Servicer), any Subservicer or
any Mortgagor; any action of the Servicer (other than if the Trustee shall
assume the duties of the Servicer pursuant to Section 8.05 and thereupon only
for the acts or omissions of the Trustee as successor Servicer) or any
Subservicer taken in the name of the Trustee; the failure of the Servicer or
any Subservicer to act or perform any duties required of it as agent of the
Trustee hereunder; or any action by the Trustee taken at the instruction of
the Servicer (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 8.05 and thereupon only for the acts or
omissions of the Trustee as successor Servicer); provided, however, that the
foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement, including, without limitation, the Trustee's
review of the Mortgage Files pursuant to Section 2.02. The Trustee shall
file any financing or continuation statement in any public office at any time
required to maintain the perfection of any security interest or lien granted
to it hereunder.
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Section 9.04. Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee and
may otherwise deal with the Servicer, any Subservicer or any of their
respective affiliates with the same right it would have if it were not the
Trustee.
Section 9.05. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (a) an institution the deposits of which are
fully insured by the FDIC and (b) a corporation or banking association
organized and doing business under the laws of the United States of America
or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of not less than $50,000,000
and subject to supervision or examination by Federal or State authority and
(c) with respect to every successor trustee hereunder either an institution
(i) the long-term unsecured debt obligations of which are rated at least
" " by and or (ii) whose serving as Trustee hereunder would
not result in the lowering of the ratings originally assigned to any Class of
Certificates. The Trustee shall not be an affiliate of the Depositor or the
Servicer. If such corporation or banking association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.05, the combined capital and surplus of such corporation or banking
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provision
of this Section 9.05, the Trustee shall resign immediately in the manner and
with the effect specified in Section 9.06.
Section 9.06. Resignation and Removal of Trustee. The Trustee may at any
time resign and be discharged from the trust hereby created by giving written
notice thereof to the Servicer and mailing a copy of such notice to all
Holders of record. The Trustee shall also mail a copy of such notice of
resignation to each Rating Agency. Upon receiving such notice of
resignation, the Servicer shall use their best efforts to promptly appoint a
mutually acceptable successor Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Trustee and
one copy to the successor Trustee. If no successor Trustee shall have been
so appointed and shall have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.05 and shall fail to resign after
written request therefor by the Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation,
then the Servicer may remove the Trustee and appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor.
The Holders of Certificates evidencing not less than 50% of the
Voting Rights may at any time remove the Trustee by written instrument or
instruments delivered to the Servicer and the Trustee; the Servicer shall
thereupon use their best efforts to appoint a mutually acceptable successor
Trustee in accordance with this Section 9.06.
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Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.06
shall become effective upon acceptance of appointment by the successor
Trustee as provided in Section 9.07.
Section 9.07. Successor Trustee. Any successor Trustee appointed as
provided in Section 9.06 shall execute, acknowledge and deliver to the
Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee herein. The predecessor
Trustee shall duly assign, transfer, deliver and pay over to the successor
Trustee the whole of the Mortgage Files and related documents and statements
held by it hereunder, together with all instruments of transfer and
assignment or other documents properly executed as may be reasonably required
to effect such transfer and such of the records or copies thereof maintained
by the predecessor Trustee in the administration hereof as may be reasonably
requested by the successor Trustee and shall thereupon be discharged from all
duties and responsibilities under this Agreement; provided, however, that if
the predecessor Trustee has been terminated pursuant to the third paragraph
of Section 9.06, all reasonable expenses of the predecessor Trustee incurred
in complying with this Section 9.07 shall be reimbursed by the Trust.
No successor Trustee shall accept appointment as provided in this
Section 9.07 unless at the time of such appointment such successor Trustee
shall be eligible under the provisions of Section 9.05.
Upon acceptance of appointment by a successor Trustee as provided
in this Section 9.07, the Servicer shall cooperate to mail notice of the
succession of such Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to each Rating Agency. If
the Servicer fail to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Servicer.
Section 9.08. Merger or Consolidation of Trustee. Any corporation or
banking association into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation or banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or banking association succeeding to all
or substantially all of the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, if such corporation or banking
association is eligible under the provisions of Section 9.05, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 9.09. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any of the provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any Mortgaged
Property may at the time be located or for any other reason, the Servicer and
the Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Trustee as
co-trustee or separate trustee of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity, such title to the Trust
Estate, or any part thereof, and, subject to the other provision of this
Section 9.09, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within ten days after the
receipt by it of a request to do so, the Trustee alone shall have the power
to make such appointment. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor Trustee under
Section 9.05 and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.07.
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In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 9.09, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or
imposed upon and exercised or performed by the Trustee and such separate
trustee or co-trustee jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether
as Trustee hereunder or as successor to the Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Trust Estate or any portion thereof in any such jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at
the direction of the Trustee. No trustee hereunder shall be held personally
liable by reason of any act or omission of any other trustee hereunder;
provided, however, that no appointment of a co-trustee or separate trustee
hereunder shall relieve the Trustee of its obligations hereunder.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article IX. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall become incapable of acting, resign or be removed, or shall
be adjudged a bankrupt or insolvent, or a receiver of its property shall be
appointed, or any public officer shall take charge or control of such trustee
or co-trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee.
Section 9.10. Authenticating Agents. The Trustee may appoint one or more
authenticating agents ("Authenticating Agents") which shall be authorized to
act on behalf of the Trustee in authenticating or countersigning
Certificates. Initially, the Authenticating Agent shall be . Wherever
reference is made in this Agreement to the authentication or countersigning
of Certificates by the Trustee or the Trustee's certificate of authentication
or countersigning, such reference shall be deemed to include authentication
or countersigning on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication or countersignature executed on behalf of the
Trustee by an Authenticating Agent. Each Authenticating Agent must be
acceptable to the Servicer and must be a corporation or banking association
organized and doing business under the laws of the United States of America
or of any State, having a principal office and place of business in New York,
New York, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to do a trust business and subject to supervision
or examination by Federal or State authorities.
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Any corporation or banking association into which any
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or banking association resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall
be a party, or any corporation or banking association succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Servicer. The Trustee may at
any time terminate the agency of any Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Servicer. Upon
receiving a notice of resignation or upon such a termination, or in case, at
any time any Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section 9.10, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the
Servicer and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers,
duties and responsibilities of its predecessor hereunder, with like effect as
if originally named as Authenticating Agent.
Section 9.11. Trustee's Fees and Expenses. The Trustee, as compensation
for its activities hereunder, shall be entitled to receive on each
Distribution Date an amount equal to the Trustee Fee for such Distribution
Date pursuant to Section 5.02(a). The Trustee and any director, officer,
employee or agent of the Trustee shall be indemnified by the Trust and held
harmless against any loss, liability or expense (including reasonable
attorney's fees) (a) incurred in connection with any claim or legal action
relating to (i) this Agreement, (ii) the Certificates, or (iii) the
performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of any of the Trustee's duties hereunder,
(b) resulting from any tax or information return which was prepared by, or
should have been prepared by, the Servicer and (c) arising out of the
transfer of any Private Certificate not in compliance with ERISA. Such
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee hereunder. Without limiting the foregoing, except
as otherwise agreed upon in writing by the Depositor and the Trustee, and
except for any such expense, disbursement or advance as may arise from the
Trustee's gross negligence, bad faith, willful misconduct or breach of this
Agreement, the Trust shall reimburse the Trustee for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Agreement to the extent permitted by Treasury
Regulations Section 1.860G-1(b)(3)(ii) and (iii); provided, however, that the
Depositor and the Trustee intend to enter into a separate agreement for
custody-related services. Except as otherwise provided herein, the Trustee
shall not be entitled to payment or reimbursement for any routine ongoing
expenses incurred by the Trustee in the ordinary course of its duties as
Trustee, Certificate Registrar or Paying Agent hereunder or for any other
expenses.
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Section 9.12. Appointment of Custodian. The Trustee may at any time on
or after the Closing Date, with the consent of the Depositor and the
Servicer, appoint one or more Custodians to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a custodial
agreement in a form acceptable to the Depositor and the Servicer. Subject to
this Article IX, the Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against
the Custodian for the benefit of the Certificateholders. Each Custodian shall
be a depository institution subject to supervision by federal or state
authority, shall have a combined capital and surplus of at least $10,000,000
and shall be qualified to do business in the jurisdiction in which it holds
any Mortgage File.
Section 9.13. Paying Agents. The Trustee may appoint one or more Paying
Agents (each, a "Paying Agent") which shall be authorized to act on behalf of
the Trustee in making withdrawals from the Certificate Account and
distributions to Certificateholders as provided in Section 3.08 and Section
5.02. Wherever reference is made in this Agreement to the withdrawal from
the Certificate Account by the Trustee, such reference shall be deemed to
include such a withdrawal on behalf of the Trustee by a Paying Agent.
Initially, the Paying Agent shall be . Whenever reference is made in
this Agreement to a distribution by the Trustee or the furnishing of a
statement to Certificateholders by the Trustee, such reference shall be
deemed to include such a distribution or furnishing on behalf of the Trustee
by a Paying Agent. Each Paying Agent shall provide to the Trustee such
information concerning the Certificate Account as the Trustee shall request
from time to time. Each Paying Agent must be reasonably acceptable to the
Servicer and must be a corporation or banking association organized and doing
business under the laws of the United States of America or of any state,
having (except in the case of the Trustee) a principal office and place of
business in New York, New York, having a combined capital and surplus of at
least $15,000,000, authorized under such laws to do a trust business and
subject to supervision or examination by federal or state authorities.
Any corporation into which any Paying Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Paying Agent shall
be a party, or any corporation succeeding to the corporate agency business of
any Paying Agent, shall continue to be the Paying Agent provided that such
corporation after the consummation of such merger, conversion, consolidation
or succession meets the eligibility requirements of this Section 9.13.
Any Paying Agent may at any time resign by giving written notice
of resignation to the Trustee and to the Servicer; provided that the Paying
Agent has returned to the Certificate Account or otherwise accounted, to the
reasonable satisfaction of the Trustee, for all amounts it has withdrawn from
the Certificate Account. The Trustee may, upon prior written approval of the
Servicer, at any time terminate the agency of any Paying Agent by giving
written notice of termination to such Paying Agent and to the Servicer. Upon
receiving a notice of resignation or upon such a termination, or in case at
any time any Paying Agent shall cease to be eligible in accordance with the
provisions of the first paragraph of this Section 9.13, the Trustee may
appoint, upon prior written approval of the Servicer, a successor Paying
Agent, shall give written notice of such appointment to the Servicer and
shall mail notice of such appointment to all Certificateholders. Any
successor Paying Agent upon acceptance of its appointment hereunder shall
become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Paying
Agent. The Trustee shall remain liable for any duties and obligations assumed
by its appointed Paying Agent.
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Section 9.14. Limitation of Liability. The Certificates are executed by
the Trustee, not in its individual capacity but solely as Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it
by this Agreement. Each of the undertakings and agreements made on the part
of the Trustee in the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the
purpose of binding only the Trust.
Section 9.15. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such preceding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee. Any recovery
of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Certificateholders in respect
of which such judgment has been recovered.
Section 9.16. Suits for Enforcement. In case an Event of Default or
other default by the Servicer or the Depositor hereunder shall occur and be
continuing, the Trustee, in its discretion, may proceed to protect and
enforce its rights and the rights of the Holders of Certificates under this
Agreement by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained
in this Agreement or in aid of the execution of any power granted in this
Agreement or for the enforcement of any other legal, equitable or other
remedy, as the Trustee, being advised by counsel, shall deem most effectual
to protect and enforce any of the rights of the Trustee and the
Certificateholders.
Section 9.17. Waiver of Bond Requirement. The Trustee shall be relieved
of, and each Certificateholder hereby waives, any requirement of any
jurisdiction in which the Trust, or any part thereof, may be located that the
Trustee post a bond or other surety with any court, agency or body whatsoever.
Section 9.18. Waiver of Inventory, Accounting and Appraisal Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby waives,
any requirement of any jurisdiction in which the Trust, or any part thereof,
may be located that the Trustee file any inventory, accounting or appraisal
of the Trust with any court, agency or body at any time or in any manner
whatsoever.
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ARTICLE X
TERMINATION
Section 10.01. Termination upon Purchase by the Depositor or Liquidation
of All Mortgage Loans. Subject to Section 10.02, the respective obligations
and responsibilities of the Depositor, the Servicer and the Trustee created
hereby (other than the obligation of Trustee to make certain payments to
Certificateholders after the Final Distribution Date and to send certain
notices as hereinafter set forth and the obligations of the Trustee pursuant
to Sections 5.04(b) and 5.05(b)) shall terminate upon the last action
required to be taken by the Trustee on the Final Distribution Date pursuant
to this Article X following the earlier of (a) the purchase by the Depositor
of all Mortgage Loans and all REO Property remaining in the Trust Estate at a
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan (other than any Mortgage Loan as to which REO Property has been
acquired and whose fair market value is included pursuant to clause (ii)
below) and (ii) the fair market value of such REO Property (as determined by
the Depositor as of the close of business on the third Business Day next
preceding the date upon which notice of any such termination is furnished to
Certificateholders pursuant to the fourth paragraph of this Article X), plus
any Class Unpaid Interest Shortfall for any Class of Certificates as well as
one month's interest at the related Mortgage Rate on the Stated Principal
Balance of each Mortgage Loan (including any Mortgage Loan as to which REO
Property has been acquired) or (b) the final payment or other liquidation (or
any advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Estate or the disposition of all REO Property.
Regardless of the foregoing, in no event shall the Trust created
hereby continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the
United States to the Court of St. ▇▇▇▇▇, living on the date hereof.
The right of the Depositor to repurchase all of the Mortgage
Loans is conditioned upon the Pool Stated Principal Balance as of the Final
Distribution Date being less than 1% of the Cut-off Date Pool Principal
Balance. If such right is exercised, the Trustee shall, promptly following
payment of the purchase price, release to the Depositor or its designee the
Mortgage Files pertaining to the Mortgage Loans being purchased.
Notice of any termination, specifying the Final Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon
which the Certificateholders may surrender their Certificates to the Trustee
for payment of the final distribution and for cancellation, shall be given
promptly by the Depositor (if exercising its right to purchase the assets of
the Trust) or by the Trustee (in any other case) by letter to
Certificateholders mailed not earlier than the 15th day and not later than
the 20th day of the month next preceding the month of such final distribution
specifying (1) the Final Distribution Date upon which final payment of the
Certificates will be made upon presentation and surrender of Certificates at
the office or agency of the Trustee therein designated, (2) the amount of any
such final payment and (3) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office or agency of the
Trustee therein specified. If the Depositor is obligated to give notice to
Certificateholders as aforesaid, it shall give such notice to the Trustee and
the Certificate Registrar at the time such notice is given to
Certificateholders. In the event such notice is given by the Depositor, the
Depositor shall deposit in the Certificate Account on or before the Final
Distribution Date in immediately available funds an amount equal to the
amount necessary to make the amount, if any, on deposit in the Certificate
Account on the Final Distribution Date equal to the purchase price for the
related assets of the Trust computed as above provided together with a
statement as to the amount to be distributed on each Class of Certificates
pursuant to the next succeeding paragraph.
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Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to Certificateholders of each Class, in the
order set forth in Section 5.02 hereof, on the Final Distribution Date and in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (I) as to each Class
of Certificates, the Class Certificate Balance thereof plus (a) accrued
interest thereon in the case of an interest bearing Certificate and (b) the
Class A-PO Deferred Amount with respect to the Class A-PO Certificates, and
(II) as to the Class A-R and A-LR Certificates, the amounts, if any, which
remain on deposit in the Upper-Tier Certificate Account and the Certificate
Account, respectively (other than the amounts retained to meet claims) after
application pursuant to clause (I) above. An amount shall be distributed in
respect of interest and principal to the Uncertificated Lower-Tier Interests
in the same amounts as distributed to their Corresponding Upper-Tier Class or
Classes.
If all of the Certificateholders do not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to
Certificateholders to continue to be held by the Trustee in an Eligible
Account for the benefit of such Certificateholders and the Depositor (if it
exercised its right to purchase the assets of the Trust Estate) or the
Trustee (in any other case) shall give a second written notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice all the Certificates shall not have been surrendered
for cancellation, the Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be
paid out of the funds on deposit in such Eligible Account.
Section 10.02. Additional Termination Requirements.
(a) If the Depositor exercises its purchase option as provided
in Section 10.01, the Trust shall be terminated in accordance with the
following additional requirements, unless the Trustee has received an Opinion
of Counsel to the effect that the failure of the Trust to comply with the
requirements of this Section 10.02 will not (i) result in the imposition of
taxes on "prohibited transactions" of the Trust as defined in Section 860F of
the Code, or (ii) cause the Trust Estate to fail to qualify as two separate
REMICs at any time that any Certificates are outstanding:
(i) within 90 days prior to the Final Distribution Date set forth in the
notice given by the Depositor under Section 10.01, the Trustee shall
sell all of the assets of the Trust Estate to the Depositor for cash;
and
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(ii) the notice given by the Depositor or the Trustee pursuant to Section
10.01 shall provide that such notice constitutes the adopting of a plan
of complete liquidation of the Upper-Tier REMIC and the Lower-Tier
REMIC as of the date of such notice (or, if earlier, the date on which
such notice was mailed to Certificateholders). The Trustee shall also
specify such date in the final tax return of the Upper-Tier REMIC and
Lower-Tier REMIC.
(b) By their acceptance of the Residual Certificates, the
Holders thereof hereby agree to take such other action in connection with
such plan of complete liquidation as may be reasonably requested by the
Depositor.
ARTICLE XI
COMPLIANCE WITH REGULATION AB
Section 11.01. Intent of the Parties; Reasonableness.
The Depositor, the Trustee and the Servicer acknowledge and agree
that the purpose of this Article XI is to facilitate compliance by the
Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. The Depositor shall not exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the 1933
Act, the 1934 Act and the rules and regulations of the Commission under the
1933 Act and the 1934 Act. Each of the Servicer and the Trustee acknowledges
that interpretations of the requirements of Regulation AB may change over
time, whether due to interpretive guidance provided by the Commission or its
staff, consensus among participants in the mortgage-backed securities
markets, advice of counsel, or otherwise, and agrees to comply with requests
made by the Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. Each
of the Servicer and the Trustee shall cooperate fully with the Depositor to
deliver to the Depositor (including any of its assignees or designees), any
and all disclosure, statements, reports, certifications, records and any
other information necessary in the reasonable, good faith determination of
the Depositor to permit the Depositor to comply with the provisions of
Regulation AB.
Section 11.02. Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent and warrant to the
Depositor as of the date hereof and on each date on which information is
provided to the Depositor under Article XI that, except as disclosed in
writing to the Depositor prior to such date: (i) it is not aware and has not
received notice that any default, early amortization or other performance
triggering event has occurred as to any other Securitization Transaction due
to any act or failure to act of the Trustee; (ii) there are no aspects of its
financial condition that could have a material adverse effect on the
performance by it of its trustee obligations under this Agreement or any
other Securitization Transaction as to which it is the trustee; (iii) there
are no material legal or governmental proceedings pending (or known to be
contemplated) against it that would be material to Certificateholders; (iv)
there are no relationships or transactions (as described in Item 1119(b) of
Regulation AB) relating to the Trustee with respect to the Depositor or any
sponsor, issuing entity, servicer, trustee, originator, significant obligor,
enhancement or support provider or other material transaction party (as each
of such terms are used in Regulation AB) relating to the Securitization
Transaction contemplated by this Agreement (each, a "Transaction Party") that
are outside the ordinary course of business or on terms other than would be
obtained in an arm's length transaction with an unrelated third party, apart
from the Securitization Transaction, and that are material to the investors'
understanding of the Certificates; and (v) the Trustee is not an affiliate
(as contemplated by Item 1119(a) of Regulation AB) of any Transaction Party.
The Depositor shall notify the Trustee of any change in the identity of a
Transaction Party after the Closing Date.
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(b) If so requested by the Depositor on any date following the
Closing Date, the Trustee shall, within five Business Days following such
request, confirm in writing the accuracy of the representations and
warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such
confirmation, provide the pertinent facts, in writing, to the Depositor.
Section 11.03. Information to Be Provided by the Trustee.
For so long as the Certificates are outstanding, the Trustee
shall provide to the Depositor a written description of (a) any litigation or
governmental proceedings pending against the Trustee that would be material
to Certificateholders, and (b) any affiliations or relationships (as
described in Item 1119 of Regulation AB) that develop following the Closing
Date between the Trustee and any Transaction Party. Any descriptions
required with respect to legal proceedings, as well as updates to previously
provided descriptions, under this Section 11.03 shall be given no later than
five Business Days prior to the Determination Date following the month in
which the relevant event occurs, and any notices and descriptions required
with respect to affiliations, as well as updates to previously provided
descriptions, under this Section 11.03 shall be given no later than January
31 of the calendar year following the year in which the relevant event
occurs. As of the date that any Form 10-D or Form 10-K relating to the
Certificates is filed with the Commission, the Trustee shall be deemed to
represent and warrant that any information previously provided by the Trustee
under this Article XI is materially correct and does not have any material
omissions unless the Trustee has provided an update to such information.
Section 11.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Depositor a report (in form and substance
reasonably satisfactory to the Depositor) regarding the Trustee's assessment
of compliance with the applicable Servicing Criteria during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
1934 Act and Item 1122 of Regulation AB. Such report shall be signed by an
authorized officer of the Trustee, and shall address each of the Servicing
Criteria specified on Exhibit O hereto; and
(b) deliver to the Depositor a report of a registered public
accounting firm satisfying the requirements of Rule 2-01 of Regulation S-X
under the 1933 Act and the 1934 Act that attests to, and reports on, the
assessment of compliance made by the Trustee and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the 1933 Act and the 1934 Act.
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Section 11.05. Indemnification Remedies.
(a) The Trustee shall indemnify the Depositor, each affiliate
of the Depositor, the Servicer and each affiliate of the Servicer, and the
respective present and former directors, officers, employees and agents of
each of the foregoing, and shall hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses that any
of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact
contained or alleged to be contained in any information, report,
certification, accountants' attestation or other material provided under this
Article XI by or on behalf of the Trustee (collectively, the "Trustee
Information"), or (B) the omission or alleged omission to state in the
Trustee Information a material fact required to be stated in the Trustee
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or
(ii) any failure by the Trustee to deliver any
information, report, certification, accountant's attestation or other
material when and as required under this Article XI.
(b) In the case of any failure of performance described in
clause (ii) of Section 11.05(a), the Trustee shall promptly reimburse the
Depositor for all costs reasonably incurred by the Depositor in order to
obtain the information, report, certification, accountants' attestation or
other material not delivered as required by the Trustee.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment. This Agreement may be amended from time to time
by the Depositor, the Servicer and the Trustee without the consent of any of
the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to correct
or supplement any provisions herein or therein which may be inconsistent with
any other provisions of this Agreement, any amendment to this Agreement or
the related Prospectus Supplement, (iii) to modify, eliminate or add to any
of its provisions to such extent as shall be necessary to maintain the
qualification of the Upper-Tier REMIC and the Lower-Tier REMIC as REMICs at
all times that any Certificates are outstanding or to avoid or minimize the
risk of the imposition of any tax on the REMIC pursuant to the Code that
would be a claim against the Trust Estate, provided that (a) the Trustee has
received an Opinion of Counsel to the effect that such action is necessary or
desirable to maintain such qualification or to avoid or minimize the risk of
the imposition of any such tax and (b) such action shall not, as evidenced by
such Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder, (iv) to change the timing and/or nature
of deposits into the Certificate Account provided that (a) such change shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder and (b) such change shall not
adversely affect the then-current rating of the Senior Certificates, the
Class B-1 Certificates, the Class B-2 Certificates, the Class B-3
Certificates, the Class B-4 Certificates or the Class B-5 Certificates as
evidenced by a letter from each Rating Agency rating such Certificates to
such effect, (v) to reduce the percentage of the Pool Principal Balance at
which the Depositor will have the option to purchase all the remaining
Mortgage Loans in accordance with Section 10.01, provided that such reduction
is considered necessary by the Depositor, as evidenced by an Officer's
Certificate delivered to the Trustee, to preserve the treatment of the
transfer of the Mortgage Loans to the Depositor by the Seller or to the Trust
by the Depositor as sale for accounting purposes, and (vi) to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be materially inconsistent with the provisions of this
Agreement, provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder, provided that the amendment shall not be deemed to
adversely affect in any material respect the interests of the
Certificateholders and no Opinion of Counsel to that effect shall be required
if the Person requesting the amendment obtains a letter from each Rating
Agency stating that the amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates.
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This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Trustee, with the consent of the Holders of
Certificates of each Class of Certificates which is affected by such
amendment, evidencing, as to each such Class of Certificates, Percentage
Interests aggregating not less than 66-2/3%, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
such Certificates; provided, however, that no such amendment shall (A) reduce
in any manner the amount of, or delay the timing of, collections of payments
on Mortgage Loans or distributions which are required to be made on any
Certificate without the consent of the Holder of such Certificate or (B)
reduce the aforesaid percentage required to consent to any such amendment,
without the consent of the Holders of all Certificates then Outstanding.
Prior to the solicitation of consent of Certificateholders in
connection with any such amendment, the party seeking such amendment shall
furnish the Trustee with an Opinion of Counsel stating whether such amendment
would adversely affect the qualification of the Upper-Tier REMIC or the
Lower-Tier REMIC as REMICs and notice of the conclusion expressed in such
Opinion of Counsel shall be included with any such solicitation. An
amendment made with the consent of all Certificateholders and executed in
accordance with this Section 12.01 shall be permitted or authorized by this
Agreement notwithstanding that such Opinion of Counsel may conclude that such
amendment would adversely affect the qualification of the Upper-Tier REMIC or
the Lower-Tier REMIC as REMICs.
Promptly after the execution of any such amendment or consent the
Trustee shall furnish written notification of the substance of or a copy of
such amendment to each Certificateholder and to each Rating Agency.
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It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.
Section 12.02. Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer and at its expense on direction by the Trustee, who
will act at the direction of Holders of Certificates evidencing not less than
50% of all Voting Rights, but only upon direction of the Trustee accompanied
by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and such counterparts shall constitute but
one and the same instrument.
Section 12.03. Limitation on Rights of Certificateholders. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Certificates, be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to
this Agreement, unless such Holder previously shall have given to the Trustee
a written notice of default and of the continuance thereof, as provided
herein, and unless also the Holders of Certificates evidencing Percentage
Interests aggregating not less than 25% of each Class of Certificates
affected thereby shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to
any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit
of all Certificateholders. For the protection and enforcement of the
provisions of this Section 12.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
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Section 12.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT APPLICATION OF THE
CONFLICTS OF LAWS PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 12.05. Notices. All demands, notices, instructions, directions,
requests and communications required to be delivered hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered
at or mailed by certified mail, return receipt requested, (provided, however,
that notices to the Trustee may be delivered by facsimile and shall be deemed
effective upon receipt ) to (a) in the case of the Depositor, Wachovia
Mortgage Loan Trust, LLC, [address], Attention: , (b) in the case of the
Servicer, [address], Attention: , (c) in the case of the Trustee,
[address], Attention: , (d) in the case of , [address], Attn ,
and (e) in the case of , [address], Attn: , or, as to each party,
at such other address as shall be designated by such party in a written
notice to each other party. Any notice required or permitted to be mailed to
a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder
receives such notice.
Section 12.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 12.07. Certificates Nonassessable and Fully Paid. It is the
intention of the Trustee that Certificateholders shall not be personally
liable for obligations of the Trust Estate, that the beneficial ownership
interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust Estate or for any reason whatsoever, and that
Certificates upon execution, countersignature and delivery thereof by the
Trustee pursuant to Section 6.01 are and shall be deemed fully paid.
Section 12.08. Access to List of Certificateholders. The Certificate
Registrar will furnish or cause to be furnished to the Trustee, within 15
days after the receipt of a request by the Trustee in writing, a list, in
such form as the Trustee may reasonably require, of the names and addresses
of the Certificateholders as of the most recent Record Date for payment of
distributions to Certificateholders.
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If three or more Certificateholders apply in writing to the
Trustee, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and is accompanied by a copy of the
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the most recent
list of Certificateholders held by the Trustee. If such a list is as of a
date more than 90 days prior to the date of receipt of such applicants'
request, the Trustee shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such applicants access to
such list promptly upon receipt.
Every Certificateholder, by receiving and holding such list,
agrees with the Certificate Registrar and the Trustee that neither the
Certificate Registrar nor the Trustee shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 12.09. Recharacterization. The parties to this Agreement intend
the conveyance by the Depositor to the Trustee of all of its right, title and
interest in and to the Mortgage Loans pursuant to this Agreement to
constitute a purchase and sale and not a loan. Notwithstanding the
foregoing, to the extent that such conveyance is held not to constitute a
sale under applicable law, it is intended that this Agreement shall
constitute a security agreement under applicable law and that the Depositor
shall be deemed to have granted to the Trustee a first priority security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
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IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee
have caused this Agreement to be duly executed by their respective officers
thereunto duly authorized to be hereunto affixed, all as of the day and year
first above written.
WACHOVIA MORTGAGE LOAN TRUST, LLC,
as Depositor
By:_______________________________
Name:
Title:
[ ],
as Servicer
By:_______________________________
Name:
Title:
[ ],
as Trustee
By:_______________________________
Name:
Title:
STATE OF )
) ss:
COUNTY OF )
)
On the th day of , 200 , before me, a notary public in
and for the State of , personally appeared , known to me who, being
by me duly sworn, did depose and say that s/he is a of , a ,
one of the parties that executed the foregoing instrument; and that s/he
signed his/her name thereto by order of the Board of Directors of such
corporation.
_____________________________
Notary Public
[Notarial Seal]
My commission expires ___________.
STATE OF )
) ss:
COUNTY OF )
On the th day of , 200_, before me, a notary public in and
for the State of , personally appeared , known to me who, being by
me duly sworn, did depose and say that s/he is a ________________ of , a
, one of the parties that executed the foregoing instrument; and that
s/he signed his/her name thereto by order of the Board of Directors of such
corporation.
______________________________
Notary Public
[Notarial Seal]
My commission expires ___________.
STATE OF )
) ss:
COUNTY OF )
On the th day of , 200_, before me, a notary public in and
for the State of , personally appeared , known to me who, being by
me duly sworn, did depose and say that s/he is the of Wachovia Mortgage
Loan Trust, LLC, a Delaware statutory trust, one of the parties that executed
the foregoing instrument; and that she signed her name thereto by order of
the Board of Directors of such limited liability company.
______________________________
Notary Public
[Notarial Seal]
My commission expires ___________.
