Real
estate mortgage investment conduits —Pooling and servicing agreement.
TABLE OF CONTENTS
ARTICLE I.
Definitions
Agreement
Appraised Value
Bankruptcy Bond
Business Day
Buydown Earnings
Buydown Funds
Buydown Mortgage Loan
Certificate
Certificate Account
Certificateholder or Holder
Certificate Register and Certificate Registrar
Company
Corporate Trust Office
Custodial Agreement
Custodian
Cut-off Date
Determination Date
Distribution Date
Due Date
Dwelling
Eligible Account
Event of Default
FHLMC
FNMA
Fractional Undivided Interest
Insurance Policy
Insurance Proceeds
Insured Expenses
Insurer
Liquidation Expenses
Liquidation Proceeds
Loan-to-Value Ratio
Master Servicer
Monthly Advance
Mortgage
Mortgage File
Mortgage Loans
Mortgage Note
Mortgaged Property
Mortgagor
Nonrecoverable Advance
Officers' Certificate
Opinion of Counsel
[Parent]
Pass-Through Rate
Permitted Investments
Person
Primary Insurance Policy
Principal Balance
Principal Prepayment
Program Guide
Qualified Insurer
Rating Agency
Record Date
Required Insurance Policies
Residential Funding
Responsible Officer
Servicing Accounts
Servicing Officer
Single Certificate
Special Hazard Insurance Policy
Special Hazard Insurers
Sub-Servicer
Sub-Servicing Account
Sub-Servicing Agreements
Trustee
Trust Fund
Trust Receipt
Uninsured Cause
ARTICLE II.
Conveyance of Mortgage Loans; Original Issuance of Certificates
2.01. Conveyance of Mortgage Loans
2.02. Acceptance by Trustee
2.03. Representations, Warranties and Covenants of
the Master Servicer
2.04. Authentication of Certificates
ARTICLE III.
Administration and Servicing of Mortgage Loans
3.01. Master Servicer to Act as Servicer
3.02. Sub-Servicing Agreements Between Master Servicer
and Sub-Servicers
3.03. Successor Sub-Servicers
3.04. Liability of the Master Servicer
3.05. No Contractual Relationship Between
Sub-Servicer and Trustee or Certificateholders
3.06. Assumption or Termination of Sub-Servicing
Agreement by Trustee
3.07. Collection of Certain Mortgage Loan Payments;
Certificate Account
3.08. Collection of Taxes, Assessments and Similar
Items; Servicing Accounts
3.09. Access to Certain Documentation and
Information Regarding the Mortgage Loans
3.10. Permitted Withdrawals From the Certificate
Account
3.11. Maintenance of the Insurance Policy and
Primary Insurance Policies; Collections under them
3.12. Maintenance of Hazard Insurance, the Special
Hazard Insurance Policy and Errors and Omissions and Fidelity Coverage
3.13. Enforcement of Due-On-Sale Clauses; Assumption
Agreements
3.14. Realization Upon Defaulted Mortgage Loans
3.15. Trustee to Cooperate; Release of Mortgage
Files
3.16. Servicing Compensation
3.17. Reports to the Trustee and the Company;
Certificate Account Statements
3.18. Annual Statement as to Compliance
3.19. Annual Independent Public Accountants'
Servicing Report
3.20. Application of Buydown Funds
3.21. Maintenance of the Bankruptcy Bond; Collections
under it
3.22. Rights of the Company In Respect of the Master
Servicer
ARTICLE IV.
Payments to Certificateholders
4.01. Distributions
4.02. Statements to Certificateholders
4.03. Distribution of Reports to the Trustee and the
Company; Advances by the Master Servicer
4.04. Reports of Foreclosures and Abandonments of
Mortgaged Property
ARTICLE V.
The Certificates
5.01. The Certificates
5.02. Registration of Transfer and Exchange of
Certificates
5.03. Mutilated, Destroyed, Lost or Stolen
Certificates
5.04. Persons Deemed Owners
ARTICLE VI.
The Company and the Master Servicer
6.01. Respective Liabilities of the Company and the
Master Servicer
6.02. Merger or Consolidation of the Company, and
the Master Servicer
6.03. Limitation on Liability of the Company, the
Master Servicer and Others
6.04. Company and Master Servicer Not to Resign
6.05. Appointment of Office or Agency
ARTICLE VII.
Default
7.01. Events of Default
7.02. Trustee or Company to Act; Appointment of
Successor
7.03. Notification to Certificateholders
ARTICLE VIII.
Concerning the Trustee
8.01. Duties of Trustee
8.02. Certain Matters Affecting the Trustee
8.03. Trustee Not Liable for Certificates or
Mortgage Loans
8.04. Trustee May Own Certificates
8.05. Master Servicer to Pay Trustee's Fees and
Expenses
8.06. Eligibility Requirements for Trustee
8.07. Resignation and Removal of the Trustee
8.08. Successor Trustee
8.09. Merger or Consolidation of Trustee
8.10. Appointment of Co-Trustee or Separate Trustee
8.11. Appointment of Custodians
ARTICLE IX.
Termination
9.01. Termination Upon Repurchase by the Company or
Liquidation of All Mortgage Loans
ARTICLE X.
Miscellaneous Provisions
10.01. Amendment
10.02. Recordation of Agreement
10.03. Limitation on Rights of Certificateholders
10.04. Governing Law
10.05. Notices
10.06. Severability of Provisions
10.00. Signatures
10.00. Acknowledgments
This Pooling and Servicing Agreement, effective as
of _________ 1, _________[year], between _________, as Seller (the
"Company"), _________, as Master Servicer (the "Master
Servicer"), and _________, as Trustee (the "Trustee"), provides:
In consideration of the mutual agreements contained
in this agreement, the Company, the Master Servicer and the Trustee agree as
follows:
ARTICLE I.
Definitions
Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. [This Agreement relates to two Trust Funds
interests in which are evidenced by Certificates designated as Series
_________[year] – — and Series _________[year] – —, respectively, each such series having its own
Pass-Through Rate. Accordingly, the following definitions as well as all other
provisions of this Agreement should be construed as relating separately to each
Trust Fund and the Certificates evidencing interests in such Trust Fund.]
Agreement: This Pooling and Servicing Agreement and
all amendments of and supplements to it.
Appraised Value: The appraised value of the
Mortgaged Property based upon the appraisal made for the originator at the time
of the origination of the related Mortgage Loan, or the sales price of the
Mortgaged Property, whichever is less.
Bankruptcy Bond: The bankruptcy bond for proceedings
under the federal Bankruptcy Code, a form of which is attached as Exhibit D to
this Agreement.
Business Day: Any day other than (i) a Saturday or a
Sunday, or (ii) a day on which banking institutions in _________ are authorized
or obligated by law or executive order to be closed.
Buydown Earnings: Earnings from the investment of
buydown Funds while the same are held in an interest-bearing custodial account
pursuant to Section 3.20.
Buydown Funds: Any amount contributed by the seller
of a Mortgaged Property, the Company or another source in order to enable the
Mortgagor to reduce the payments required to be made by the Mortgagor from the
Mortgagor's funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan as to which
a specified amount of interest is paid out of related Buydown Funds in
accordance with a related buydown agreement.
Certificate: Any one of the certificates executed by
the Company and authenticated by the Certificate Registrar in substantially the
following form, with the blanks therein appropriately completed, for Series
198— – —, the bracketed material indicating the changes therefrom for
Series 198— – —.
[Form
of Face of Certificate]
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Series _________[year]–—
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Fractional Undivided Interest
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[Series _________[year]–—]
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—/—th [—/—th]
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Date of Pooling and Servicing
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— _____% Pass-Through Rate]
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Agreement and Cut-off Date
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[— _____% Pass-Through Rate]
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_________ 1, _________[year]
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[Variable Pass-Through Rate]
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First Distribution Date _________ 25, _________[year]
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Aggregate Principal Balance of the Mortgage Loans
after deducting payments due on the Cut-off Date
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Master Servicer
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$_____ [$_____]
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...................................................................................................
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CONDUIT MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a fractional undivided interest in a pool of conventional
single-family mortgage loans formed and sold by
_________(Name of Business)
This Certificate does not represent an obligation of
or interest in (Company), or the Master Servicer or any of their affiliates.
Neither this Certificate nor the underlying Mortgage Loans are guaranteed by
any governmental agency or instrumentality.
This certifies that _________ is the registered
owner of a —/—th fractional undivided interest in a pool (the
"Pool") of conventional single-family mortgage loans (the
"Mortgage Loans"), formed and sold by the "Company", which
term includes any successor entity under the Agreement referred to below. The
Pool was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Company, the Master
Servicer and _________, as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not defined in this Certificate, the capitalized terms used in this Certificate
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the holder of this Certificate by virtue of the acceptance of
this Certificate assents and by which such holder is bound. Terms which are
defined in the Agreement and which are used but not defined in this Certificate
shall have the respective meanings in this Certificate as they have in the
Agreement.
The Master Servicer promises to distribute on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the month next preceding the month of such distribution (the
"Record Date"), an amount equal to the product of the fractional
undivided interest evidenced by this Certificate and the aggregate of all
previously undistributed (a) payments on account of principal (including
Principal Prepayments, if any) and interest on the Mortgage Loans subject at
any time to the Agreement received by the Master Servicer after the Cut-off
Date as specified above and prior to the 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of such distribution (the "Determination Date"), (b) any Buydown
Funds and Buydown Earnings deposited in the Certificate Account on or before
the Distribution Date and (c) certain funds required by the Agreement to be
deposited by the Master Servicer due to the operation of certain deductible
clauses in blanket policies maintained by the Master Servicer, if any, against
hazard losses, except: (i) all payments which were due on or before the Cut-off
Date; (ii) all Principal Prepayments received during the month of distribution
and all payments of interest representing interest for the month of
distribution or any portion of it; (iii) all scheduled payments of principal
and interest due on a date or dates subsequent to the first day of the month of
distribution; (iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which there is an unreimbursed
advance; (v) amounts representing reimbursement for other advances which the
Master Servicer has determined to be otherwise nonrecoverable and amounts
representing reimbursement for certain losses and expenses incurred by the
Master Servicer or the Company and described in the Agreement; (vi) that
portion of each payment of interest on a particular Mortgage Loan which, when
deducted, will make the portion of that payment distributed equal to interest
at the Pass-Through Rate on the Principal Balance of such Mortgage Loan
outstanding during the period for which such payment was received; and (vii)
where permitted by the Agreement, that portion of the proceeds of the
liquidation of defaulted Mortgage Loans which represents unpaid servicing
compensation of the Master Servicer. For the purposes of this Certificate,
amounts received by the Master Servicer in connection with the liquidation of
defaulted Mortgage Loans through Insurance Proceeds, foreclosure or trustee's
sales proceeds or otherwise shall be deemed to be amounts received on Mortgage
Loans. In addition, the Master Servicer shall include with any such monthly
distribution an amount equal to principal payments and interest payments
(adjusted to the Pass-Through Rate) due on the first day of the month of
distribution and delinquent as of the close of business on the Business Day
prior to the Distribution Date, subject to the Master Servicer's determination
that such payments are recoverable from Insurance Proceeds or Liquidation
Proceeds.
Distributions on this Certificate will be made by
the Master Servicer by wire transfer in immediately available funds for the account
of the Person entitled to them if such Person shall have so notified the Master
Servicer, or by check mailed to the address of the Person entitled to them, as
such name and address shall appear on the Certificate Register. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Company of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
appointed by the Company for that purpose in the City and State of _________.
Reference is here made to the further provisions of
this Certificate set forth below, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication on this
Certificate has been executed by the Certificate Registrar, by manual
signature, this Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose.
In Witness of which, the Company has caused this
Certificate to be duly executed under its official seal.
Dated:
By _________, Vice President
[Seal]
Attest: _________, Assistant
Secretary
[Form of Certificate of
Authentication]
This is one of the Certificates
referred to in the within-mentioned Agreement.
_______________
Certificate Registrar
By _________, Authorized
Officer
[Form of Reverse of Certificate]
This Certificate is one of a duly authorized issue
of Certificates designated as Conduit Mortgage Pass-Through Certificates of the
Series and Pass-Through Rate specified on this Certificate (the
"Certificates") and representing the fractional undivided interest
set forth above in (i) the Mortgage Loans, (ii) such assets as from time to
time may be identified as deposited in the certificate account created by the
Master Servicer pursuant to the Agreement (the "Certificate
Account"), (iii) property which secured a Mortgage Loan and which has been
acquired by foreclosure or deed in lieu of foreclosure, (iv) the Insurance
Policy hereinafter referred to and the Primary Insurance Policies, if any, and
Bankruptcy Bond referred to in the Agreement and (v) the Special Hazard
Insurance Policy referred to in the Agreement (the Mortgage Loans, such assets
deposited in the Certificate Account, such property and such Insurance Policy,
Special Hazard Insurance Policy, Primary Insurance Policies and Bankruptcy Bond
being collectively called the "Trust Fund" below).
The Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth in this Certificate and in the Agreement. In the event
Master Servicer funds are advanced with respect to any Mortgage Loan, such
advance is reimbursable to the Master Servicer from related recoveries on such
Mortgage Loan or from other cash deposited in the Certificate Account to the
extent that such advance is not otherwise recoverable.
The Master Servicer has obtained, and has agreed to
exercise its best reasonable efforts, subject to certain limitations as to cost
in the case of any replacement policies for them, to maintain for as long as
Certificates shall be outstanding, a mortgage guaranty insurance policy or
policies (the "Insurance Policy") for the benefit of
Certificateholders. The Insurance Policy is limited in scope and amount and may
be examined, together with the Agreement, during normal business hours at the
principal office of the Master Servicer by any Certificateholder on request.
As provided in the Agreement, withdrawals from the
Certificate Account may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes
including reimbursement to the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions
provided in it, the amendment of the Agreement and the modification of the
rights and obligations of the Company and the Master Servicer and the rights of
the Certificateholders under the Agreement at any time by the Company, the
Master Servicer and the Trustee with the consent of the holders of Certificates
evidencing fractional undivided interests aggregating not less than 66% of the
Trust Fund. Any such consent by the holder of this Certificate shall be
conclusive and binding on such holder and upon all future holders of this
Certificate and of any Certificate issued upon the transfer of this certificate
or in exchange for or in lieu of it whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment of itself
in certain circumstances, without the consent of the holders of any of the
Certificates.
As provided in the Agreement and subject to certain
limitations set forth in the agreement, the transfer of this Certificate is
registrable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies appointed by the Company in
the City and State of _________, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Company and the Certificate Registrar duly executed by, the
holder of this certificate or such holder's attorney duly authorized in
writing, and one or more new Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest in the Trust Fund
will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations of one or any other positive
whole number divided by the denominator specified on this Certificate. As
provided in the Agreement and subject to certain limitations set forth in it,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate fractional undivided interest in the Trust Fund,
as requested by the holder surrendering the same.
No service charge will be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection with such registration.
The Company, the Trustee and the Certificate
Registrar and any agent of the Company, the Trustee or the Certificate
Registrar may treat the Person in whose name this Certificate is registered as
the owner of it for all purposes, and neither the Company, the Trustee, nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the
Trust Fund created by it shall terminate upon (i) the later of the maturity or
other liquidation (including repurchase by the Company) of the last Mortgage
Loan subject to it or the disposition of all property acquired upon foreclosure
or deed in lieu of foreclosure of any Mortgage Loan, and (ii) the payment to
Certificateholders of all amounts held by the Company and required to be paid
to them pursuant to the Agreement. The Agreement permits, but does not require,
the Company to repurchase from the Trust Fund all Mortgage Loans at the time
subject to it and all property acquired in respect of any Mortgage Loan at a
price equal to the greater of (a) the principal amount of such Mortgage Loans
plus the appraised value of such property as provided in the Agreement or (b)
the aggregate market value of the Certificates determined as provided in the
Agreement, in each case together with accrued interest on the Mortgage Loans at
the Pass-Through Rate as provided in the Agreement. The exercise of such right
will effect early retirement of the Certificates, the Company's right to
repurchase being subject to the aggregate Principal Balance of the Mortgage
Loans at the time of repurchase being less than 10% of the aggregate Principal
Balance of the Mortgage Loans at the Cut-off Date.
ASSIGNMENT
For Value Received the undersigned by this
instrument sell(s), assign(s) and transfer(s) unto _________(Please print or
typewrite name and address including postal zip code of assignee)
a fractional undivided interest equal to
—/—th of the Trust Fund evidenced by this Conduit Mortgage
Pass-Through Certificate and authorizes the transfer of registration of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the
Certificate Registrar to issue a new Certificate of a fractional undivided
interest equal to —/—th, to the above named assignee and deliver such
Certificate to the following address: _________
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Dated:
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_________, Signature by or
on behalf of assignor
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_________,
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the
information of _________:
Distributions shall be made by wire transfer in
immediately available funds to _________ for the account of _________ account
number _________, or, if mailed by check, to _________. Applicable statements
should be mailed to _________.
This information is provided by _________, the
assignee named above, or _________ as its agent.
Certificate Account: The custodial account or
accounts created and maintained pursuant to Section 3.07, which shall be
entitled "[Trustee]," Conduit Mortgage Pass-Through Certificates,
Series [as specified on the face of the Certificate] and which must be
an Eligible Account. Funds deposited in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
Sections 3.07, 3.10 and 4.03.
Certificateholder or Holder: 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 Company, the Master Servicer or any
Sub-Servicer or any affiliate of them shall be deemed not to be outstanding and
the Fractional Undivided Interest evidenced by the certificate shall not be
taken into account in determining whether the requisite percentage of Fractional
Undivided Interests necessary to effect any such consent has been obtained.
Certificate Register and Certificate Registrar: The
register maintained and the registrar appointed pursuant to Section 5.02.
Company: _________, a _________ corporation, or its
successor in interest.
Corporate Trust Office: The principal office of the
Trustee in the State of _________ at which at any particular time its corporate
business shall be administered, which office at the date of the execution of
this instrument is located at _________.
Custodial Agreement: An Agreement entered into among
the Company, the Master Servicer, the Trustee and a Custodian in the form of
Exhibit A to this agreement.
Custodian: A Custodian appointed pursuant to a
Custodial Agreement.
Cut-off Date: The date specified as the Cut-off Date
on the face of a Certificate.
Determination Date: The 15th day (or if such 15th
day is not a Business Day, the Business Day immediately preceding such 15th
day) of the month of the related Distribution Date.
Distribution Date: The 25th day of any month
beginning in the month immediately following the month of the initial issuance
of the Certificates or, if such 25th day is not a Business Day, the Business
Day immediately following.
Due Date: The first day of the month of the related
Distribution Date.
Dwelling: A residential property consisting of one
structure or unit or one primary structure along with structures or
outbuildings (which may include living quarters) subordinate to the primary
structure.
Eligible Account: An account that is either (i)
maintained with a depository institution the debt obligations of which have
been rated by each Rating Agency in one of its two highest rating categories,
or (ii) an account or accounts the deposits in which are fully insured by
either the Federal Deposit Insurance Corporation or the Federal Savings and
Loan Insurance Corporation, or (iii) an account or accounts, in a depository
institution in which such accounts are insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation (to the
limits established by such Corporations), the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee, the Certificateholders have a claim with respect to
the funds in such account or a perfected first 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 with which such account is maintained.
Event of Default: As defined in Section 7.01.
FHLMC: Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor to
it.
FNMA: Federal National Mortgage Association, a
federally chartered and privately owned corporation organized and existing
under the Federal National Mortgage Association Charter Act, or any successor
to it.
Fractional Undivided Interest: The fractional
undivided interest in the Trust Fund evidenced by a Certificate.
Insurance Policy: The pool mortgage guaranty
insurance policy, a form of which is attached as Exhibit C to this Agreement or
any replacement insurance policy obtained by the Master Servicer pursuant to
Section 3.11.
Insurance Proceeds: Proceeds paid pursuant to the
Insurance Policy, Bankruptcy Bond or Primary Insurance Policies, if any, and
pursuant to the Special Hazard Insurance Policy when the related property has
not been restored and amounts paid by any insurer pursuant to any other
insurance policy covering a Mortgage Loan.
Insured Expenses: Expenses covered by the Insurance
Policy, any Primary Insurance Policy, the Bankruptcy Bond or the Special Hazard
Insurance Policy or any replacement insurance policy or policies or any other
insurance policy.
Insurer: _________, a _________ corporation, or any
successor to it or the named insurer in any replacement policy obtained by the
Master Servicer pursuant to Section 3.11.
Liquidation Expenses: Reasonable expenses which are
incurred by the Master Servicer in connection with the liquidation of any
defaulted Mortgage Loan and not recovered by the Master Servicer under the
Insurance Policy or any Primary Insurance Policy, for reasons other than the
Master Servicer's failure to comply with Section 3.11, such expenses including,
without limitation, legal fees and expenses, any unreimbursed amount expended
by the Master Servicer pursuant to Section 3.12 respecting the related Mortgage
Loan and any related and unreimbursed expenditures for real estate property
taxes or for property restoration or preservation to the extent not previously
reimbursed under the Special Hazard Insurance Policy.
Liquidation Proceeds: Cash (other than Insurance
Proceeds) received in connection with the liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise.
Loan-to-Value Ratio: As of any date, the fraction,
expressed as a percentage, the numerator of which is the current 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.
Master Servicer: _________, a _________ corporation,
or its successor in interest, or any successor Master Servicer appointed as
provided in Section 7.02.
Monthly Advance: The aggregate of the advances made
on any Distribution Date pursuant to Section 4.03, the amount of any such
Monthly Advance being equal to the aggregate of payments of principal and
interest on the Mortgage Loans which were due on the Due Date and delinquent as
of the close of business on the Business Day next preceding such Distribution
Date, after adjustment of any delinquent interest payment to interest at the
Pass-Through Rate, less the amount of any advances which Master Servicer has
determined would constitute Nonrecoverable Advances if made.
Mortgage: The mortgage, deed of trust or other
instrument creating a first lien on an estate in fee simple interest in real
property securing a Mortgage Note.
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 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 Fund, the Mortgage Loans originally so
held being identified in Exhibit B to this agreement. Exhibit B shall identify
each Mortgage Loan by loan number, address of the Mortgaged Property and name of
the Mortgagor and shall set forth as to each Mortgage Loan the Appraised Value
of the Mortgaged Property, the Loan-to-Value Ratio at origination of the
Mortgage Loan, including any secondary financing, the Principal Balance as of
the Cut-off Date, the interest rate borne by the Mortgage Note, the current
scheduled monthly payment of principal and interest and the maturity of the
Mortgage Note.
Mortgage Note: The originally executed note or other
evidence of indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan.
Mortgaged Property: The underlying property securing
a Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: Any advance previously made
or proposed to be made by the Master Servicer pursuant to Section 4.03 which,
in the good faith judgment of the Master Servicer, will not or, in the case of
a proposed advance, would not be ultimately recoverable by the Master Servicer
from Insurance Proceeds or Liquidation Proceeds. The determination by the
Master Servicer that it has made a Nonrecoverable Advance or that any proposed
advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced
by an Officers' Certificate of the Master Servicer delivered to the Trustee and
detailing the reasons for such determination. In the event that the reasons
shall relate to a general inability to recover under the Insurance Policy (as
opposed to an inability so to recover for reasons peculiar to a particular
Mortgage Loan), notice of such determination shall be mailed by the Master
Servicer promptly to each Certificateholder.
Officers' Certificate: A certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President or Assistant Vice President, and by the Treasurer, the Secretary, or
one of the Assistant Treasurers or Assistant Secretaries of the Company or the
Master Servicer, as the case may be, and delivered to the Trustee, as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel,
who may be counsel for the Company or the Master Servicer, who is or are
acceptable to the Trustee.
[Parent: _________.]
Pass-Through Rate: [The annual rate of interest
specified on the face of the Certificates] [As to each Mortgage Loan,
the annual rate of interest borne by the Mortgage Loan minus _____% per annum
in the case of a Mortgage Loan contained in the Trust Fund interests in which
are evidenced by the Certificates designated as Series _________[year]–—
and minus _____% per annum in the case of a Mortgage Loan contained in the
Trust Fund interests in which are evidenced by the Certificates designated as
Series _________[year]–—], any regular monthly remittance of interest
at such rate being based upon annual interest at such rate on the Principal
Balance of the related Mortgage Loan divided by twelve and any partial
remittance of interest at such rate by reason of a Principal Prepayment being
based upon annual interest at such rate on the prepaid Principal Balance of the
related Mortgage Loan multiplied by a fraction the numerator of which is the
number of days elapsed since the last scheduled Due Date for a payment on the
related Mortgage Note such date of prepayment and the denominator of which is
365.
Permitted Investments: One or more of the following:
(i) obligations of, or guaranteed as to principal and interest by, the
United States or any agency or instrumentality thereof when such obligations
are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than three months from the date of its acquisition, provided
that the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in one of its two
highest rating categories;
(iii) federal funds, certificates of deposit, time deposits and
bankers' acceptances of any United States depository institution or trust
company incorporated under the laws of the United States or any state provided
that the debt obligations of such depository institution or trust company (or,
in the case of the principal depository institution in a depository institution
holding company) at the date of acquisition of it have been rated by each
Rating Agency in one of its two highest rating categories; and
(iv) commercial paper of any corporation incorporated under the laws of
the United States or any state of them which on the date of acquisition has
been rated by each Rating Agency in its highest rating category.
Person: Any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision of it.
Primary Insurance Policy: Each primary policy of
mortgage guaranty insurance or any replacement policy for it referred to in
Section 3.11, relating to (i) any Mortgage Loan with a Loan-to-Value Ratio at
origination in excess of 80%, [specify any other requirements].
Principal Balance: As of the time of any
determination, the principal balance of a Mortgage Loan remaining to be paid by
the Mortgagor or from any Buydown Funds at the close of business on the Cut-off
Date, after deduction of all payments due on or before the Cut-off Date and not
paid, reduced by all amounts distributed to Certificateholders and reported to
them as allocable to principal.
Principal Prepayment: Any payment or other recovery
of principal on a Mortgage Loan which is received in advance of its scheduled
Due Date and is not accompanied by an amount as to interest representing
scheduled interest due on any date or dates in any month or months subsequent
to the month of prepayment.
Program Guide: The Lender Operating Manual relating
to Residential Funding's mortgage loan purchase program and all program
bulletins published by Residential Funding from time to time.
Qualified Insurer: A mortgage guaranty insurance
company duly qualified as such under the laws of the state of its principal
place of business and each other state having jurisdiction over such company in
connection with the Insurance Policy duly authorized and licensed by the
insurance regulatory authority of the state of its principal place of business
and, to the extent required by applicable law, each such other state to
transact a mortgage guaranty insurance business in such state and each such
other state and to write the insurance provided by the Insurance Policy and
approved as an insurer by FHLMC or FNMA.
Rating Agency: Any statistical credit rating agency
that rated the Certificates at the request of the Company at the time of the
initial issuance of the Certificates. References in this agreement to the two
highest rating categories of a Rating Agency shall mean such ratings without
any plus or minus—e.g., AAA and AA in the case of Standard & Poor's
Corporation.
Record Date: The last day of the month (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) next preceding the month of the related Distribution Date.
Required Insurance Policies: With respect to any
Mortgage Loan, all insurance policies which are required to be maintained from
time to time under this Agreement, the Program Guide or the related
Sub-Servicing Agreement.
Residential Funding: Funding Corporation, a
_________ corporation affiliated with the Company.
Responsible Officer: When used with respect to the
Trustee, the Chairman or Vice Chairman of the Board of Directors or Trustees,
the Chairman or Vice Chairman of the Executive or Standing Committee of the
Board of Directors or Trustees, the President, the Chairman of the Committee on
Trust Matters, any Vice President, any Assistant Vice President, the Secretary,
any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier,
any Assistant Cashier, any Trust Officer or Assistant Trust Officer, the
Controller and any Assistant Controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
Servicing Accounts: account or accounts created and
maintained pursuant to Section 3.08.
Servicing Officer: Any officer of the Master
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 Master Servicer, as such list may from time to time be
amended.
Single Certificate: A Certificate evidencing a
Fractional Undivided Interest having a numerator of one and the denominator
specified on the face of the Certificate.
Special Hazard Insurance Policy: The Special Hazard
Insurance Policy, a form of which is attached as Exhibit E to this Agreement or
any replacement policy obtained by the Master Servicer pursuant to Section
3.12.
Special Hazard Insurers: _________ or the named
insurer in any replacement policy obtained by the Master Servicer pursuant to
Section 3.12.
Sub-Servicer: Any Person with whom the Master
Servicer has entered into a Sub-Servicing Agreement and who satisfies any
requirements set forth in the Program Guide in respect of the qualification of
a Sub-Servicer.
Sub-Servicing Account: An account established by a
Sub-Servicer, which must be an Eligible Account and is otherwise acceptable to
the Master Servicer.
Sub-Servicing Agreements: The written contract
between the Master Servicer and any Sub-Servicer relating to servicing and/or
administration of certain Mortgage Loans as provided in Section 3.02, a form of
which is attached to this agreement as Exhibit F.
Trustee: _________, or its successor in interest, or
any successor trustee as provided in this agreement.
Trust Fund: The corpus of each trust created by this
agreement, consisting of the Mortgage Loans, such assets as shall from time to
time be identified as deposited in the Certificate Account, property which
secured a Mortgage Loan and which has been acquired by foreclosure or deed in
lieu of foreclosure, the Insurance Policy, the Special Hazard Insurance Policy,
the Bankruptcy Bond and the Primary Insurance Policies, if any.
Trust Receipt: A trust receipt the form of which is
attached as Exhibit H to this agreement.
Uninsured Cause: Any cause of damage to property subject
to a Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or the Special Hazard Insurance
Policy required to be maintained pursuant to Section 3.12.
ARTICLE II.
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. Conveyance of Mortgage Loans. The
Company, concurrently with the execution and delivery of this agreement, by
this agreement assigns to the Trustee without recourse all the right, title and
interest of the Company in and to the Mortgage Loans, including all interest
and principal received by the Company on or with respect to the Mortgage Loans
after the Cut-off Date (other than payments of principal and interest due on
the Mortgage Loans on or before the Cut-off Date).
In connection with such assignment, the Company by
this agreement delivers to, and deposits with, the Trustee, or to one or more
Custodians, as the duly appointed agent or agents of the Trustee for such
purpose, the following documents or instruments with respect to each Mortgage
Loan so assigned:
(i) The Mortgage Note, endorsed without recourse to the order of the
Trustee and showing an unbroken chain of endorsements from the originator of it
to the Person endorsing it to the Trustee;
(ii) The Mortgage with evidence of recording indicated on it or a
certified copy of the Mortgage in those instances where the public recording
office retains the original; and
(iii) An assignment (which may be included in a blanket assignment) of
the Mortgage in recordable form to the Trustee, together with all recorded
intervening assignments of it.
In the event that in connection with any Mortgage
Loan the Company cannot deliver the Mortgage with evidence of recording thereon
concurrently with the execution and delivery of this Agreement solely because
of a delay caused by the public recording office where such Mortgage has been
delivered for recordation, the Company shall deliver or cause to be delivered
to the Trustee or the respective Custodian an Officers' Certificate or a
certificate of the related Sub-Servicer, with a photocopy of such Mortgage
attached to it, stating that such Mortgage has been delivered to the
appropriate public recording official for recordation. The Company shall
promptly deliver or cause to be delivered to the Trustee or the respective
Custodian such Mortgage with evidence of recording indicated on it upon receipt
of it from the public recording official or from the related Sub-Servicer.
The Master Servicer shall promptly cause to be
recorded in the appropriate public office for real property records each
assignment referred to in this Section 2.01 unless the Master Servicer shall
furnish to the Trustee an unqualified Opinion of Counsel to the effect that
recordation of such assignment is not necessary 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 Company
or the originator of such Mortgage Loan. While each assignment to be recorded
is being recorded, the Company shall leave with the Trustee or the respective
Custodian a photocopy of such assignment.
Section 2.02. Acceptance by Trustee. The Trustee
acknowledges receipt (or, with respect to Mortgage Loans subject to a Custodial
Agreement, receipt by the respective Custodian as the duly appointed agent of
the Trustee) of the documents referred to in Section 2.01 above and declares
that it, or a Custodian as its agent, holds and will hold such documents and
the other documents constituting a part of the Mortgage Files delivered to it
in trust for the use and benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of Certificateholders, to review each
Mortgage File delivered to it within 45 days after the conveyance of the
related Mortgage Loan to the Trustee (and each Mortgage that is not delivered
upon such conveyance because of a delay at the recording office but is
delivered at least 38 days after such conveyance, within seven days after the
delivery of it to the Trustee) to ascertain that all required documents have
been executed and received, and that such documents relate to the Mortgage
Loans identified in Exhibit B annexed to this agreement, as supplemented, that
have been delivered to it. If the Trustee finds any document or documents
constituting a part of a Mortgage File to be defective in any material respect,
the Trustee shall promptly so notify the Master Servicer. Pursuant to Section
2.3 of the Custodial Agreement, the Custodian will notify the Master Servicer
of any such defect found by it in respect of any Mortgage File held by it. The
Master Servicer shall have a period of 60 days after such notice within which
to correct or cure any such defect. The Master Servicer covenants and agrees
that, if any material defect cannot be corrected or cured, the Master Servicer
will, not later than 90 days after the Trustee's or Custodian's notice to it
respecting such defect, purchase the related Mortgage Loan from the Trustee at
a price equal to (i) 100% of the Principal Balance of such Mortgage Loan as of
the date of repurchase; plus (ii) accrued interest at the Pass-Through Rate to
the first day of the month following repurchase. The purchase price for the repurchased
Mortgage Loan shall be deposited by the Master Servicer in the Certificate
Account maintained by it pursuant to Section 3.07 and, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee, or the Custodian, as the case may be, shall release to the Master
Servicer the related Mortgage File and the Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse, as
shall be necessary to vest in the Master Servicer or its designee any Mortgage
Loan released pursuant to this agreement. It is understood and agreed that the
obligation of the Master Servicer to repurchase any Mortgage Loan as to which a
material defect in a constituent document exists shall constitute the sole
remedy respecting such defect available to Certificateholders or the Trustee on
behalf of Certificateholders.
Section 2.03. Representations, Warranties and
Covenants of the Master Servicer.
(a). The Master Servicer by this agreement represents,
warrants and covenants to the Trustee that:
(i). The Master Servicer is a corporation duly
organized, validly existing and in good standing under the laws governing its
creation and existence and is duly authorized and qualified to transact any and
all business contemplated by this agreement and possesses all requisite
authority, power, licenses, permits and franchises to conduct its business and
to execute, deliver and comply with its obligations under the terms of this
Agreement, the execution, delivery and performance of which have been duly
authorized by all necessary action.
(ii). The Master Servicer will remain subject to
supervision and examination by any state or Federal authorities as may be
applicable (including Federal Housing Administration, FNMA and FHLMC
authorities); will remain in good standing and qualified to do business under
the laws of the state of its organization and of any other state where so
required by applicable law, and will not dissolve or dispose of a substantial
portion of its assets and will not voluntarily consolidate with or merge into
any other entity or permit one or more other entities to consolidate with or
merge into it. Notwithstanding the foregoing, the Master Servicer may
consolidate with or merge into another entity, or permit one or more entities
to consolidate with or merge into it, or sell or otherwise transfer to another
such entity all or substantially all of its assets as an entirety and dissolve,
and the merger, consolidation, sale or transfer shall not constitute a breach
of or default under this agreement if the surviving, resulting or transferee
entity, as the case may be (A) is a direct or indirect wholly owned subsidiary
of _________, a _________ corporation, (B) assumes in writing all of the
obligations of the Master Servicer under this Agreement and (C) is a part to a
support letter agreement with Parent that is satisfactory to the Company.
(iii). The execution and delivery of this Agreement
by the Master Servicer and its performance and compliance with the terms of
this Agreement will not (A) violate the Master Servicer's Articles of
Incorporation or Bylaws, (B) violate any law or regulation or any
administrative decree or order to which it is subject or (C) constitute a
default) under, (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any material
contract, agreement or other instrument to which the Master Servicer is a party
or which may be applicable to the Master Servicer or any of its assets.
(iv). This Agreement, assuming due authorization,
execution and delivery by the Trustee and the Company, constitutes a valid,
legal and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms of this agreement, except as the enforcement of it
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other laws affecting creditors' rights generally.
(v). The Master Servicer is not in default with
respect to any order or decree of any court or any order, regulation or demand
of any Federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its properties or
might have consequences that would affect its performance under this agreement.
(vi). The Master Servicer is not a party to or bound
by any agreement or instrument or subject to any articles of incorporation,
bylaws or any other corporate restriction of any judgment, order, writ,
injunction, decree, law or regulation which now or in the future may materially
and adversely affect the ability of the Master Servicer to perform its
obligations under this agreement or which requires the consent of any third
person to the execution of this agreement or the performance by the Master
Servicer of its obligations under this agreement.
(vii). No litigation is pending or, to the best of
the Master Servicer's knowledge, threatened against the Master Servicer which
would prohibit its entering into this Agreement or performing its obligations
under this agreement.
(viii). The Master Servicer is and will at all times
be an FNMA and FHLMC-approved servicer and will comply in the performance of
this agreement with all reasonable rules and requirements of each insurer under
each Required Insurance Policy.
(ix). No information, certificate of an officer,
statement furnished in writing or report delivered to the Company, any
affiliate of the Company, or the Trustee by the Master Servicer will, to the
knowledge of the Master Servicer, contain any untrue statement of a material
fact or omit a material fact necessary to make the information, certificate,
statement or report not misleading.
(x). The Master Servicer has examined each existing
and will examine each new Sub-Servicing Agreement and is or will be familiar
with the terms of it. The terms of each existing Sub-Servicing Agreement and
each designated Sub-Servicer have been approved by and are acceptable to the
Master Servicer and any new Sub-Servicing Agreements or Sub-Servicers will be
so approved and will comply with the provisions of Section 3.02. Each approved
Sub-Servicer is or will be a mortgage loan servicing company approved by FNMA
and FHLMC as an approved seller and servicer of single-family conventional,
residential mortgage loans.
(b). The Master Servicer by this agreement makes the
representations and warranties set forth in Exhibit G to this agreement and the
following representations and warranties:
(i). The information set forth in Exhibit B to this
agreement is true and correct in all material respects at the date or dates
respecting which such information is furnished;
(ii). The property subject to each Mortgage is a
one- to four-family residence [owner-occupied], as of the date of
origination of the related Mortgage Loan, consisting of one Dwelling, and
located in the state indicated on Exhibit B and each Mortgagor as of the date
of origination of the related Mortgage Loan is a natural person, except that,
with respect to certain Mortgage Loans secured by property located in the State
of Illinois, the related Mortgagor may be a trust;
(iii). No Mortgage Loan had a Loan-to-Value Ratio at
origination in excess of 95%, [and no Mortgage Loan which is secured by a
second or vacation home had a Loan-to-Value Ratio at origination in excess of
80%]; each Mortgage Loan with a Loan-to-Value Ratio at origination in
excess of 80% is insured by a Primary Insurance Policy which insures the
portion of the principal amount of such Mortgage Loan which is in excess of 75%
of the Appraised Value of the related Mortgage Property; [specify
requirements] and as of the date of the initial issuance of the
Certificates, the claims-paying ability of each insurer under each such Primary
Insurance Policy is acceptable to each Rating Agency for mortgage pass-through
certificates rated in one of its two highest rating categories;
(iv). No
Mortgage Loan had an original principal balance greater than $500,000 or less
than $30,000, and each Mortgage Loan complied with the following Loan-to-Value
Ratios at origination based on the Appraised Value of the related Mortgaged
Property:
|
Maximum Original Principal
Balance
|
Maximum Original
Loan-to-Value Ratio
|
|
[$300,001 to $500,000
|
80%
|
|
$200,001 to $300,000
|
85%
|
|
$150,001 to $200,000
|
90%
|
|
$150,000 or less
|
95%]
|
and no Mortgage Loan secured by a Mortgaged Property
subject to secondary financing at the origination of such Mortgage Loan had a
combined Loan-to-Value Ratio at origination in excess of 90% for primary
residences or _____% in the case of second or vacation homes properties;
(v). [specify type of Mortgage Loan];
(vi). As of the date of the initial issuance of the
Certificates, no more than 5% of the Mortgage Loans by Principal Balance are
secured by units located in one condominium project or in a single housing
development or in any one zip code area;
(vii). As of the date of the initial issuance of the
Certificates, no more than _____% of the Mortgage Loans by Principal Balance
are secured by property located in the State of California and, with respect to
Mortgage Loans secured by property located in the State of California, no more
than 1% of the Mortgage Loans by Principal Balance are secured by Mortgaged
Properties located in one condominium project or in a single housing
development or any one zip code area;
(viii). With respect to each Mortgaged Property that
is a condominium unit in a newly constructed condominium project and on the
basis of representations of the developer of such project or the appraiser for
such Mortgaged Property, at least 70%, or such lesser percentage, not less than
51%, as the Master Servicer deems appropriate on the basis of information
provided to it, of the condominium units in such project have been sold or
committed for sale at the time of the origination of the Mortgage Loan secured
by such Mortgaged Property; and with respect to each Mortgaged Property that is
a condominium unit in a condominium project that is not newly constructed and
on the basis of representations of the condominium association or the appraiser
for such Mortgaged Property, no more than 30% of the units in such project were
for sale at the origination of the related Mortgage Loan; at the time of
origination of each Mortgage Loan secured by a condominium unit, 70% of the
condominium units in a newly constructed condominium project have been sold or
committed for purchase and 60% of the condominium units in an existing
condominium project have been represented by the condominium association,
project developer or the appraiser of the related Mortgaged Property to be
owner-occupied;
(ix). No Buydown Mortgage Loan with a Loan-to-Value
Ratio at origination of 90% or less involves Buydown Funds contributed by the
seller of the related Mortgaged Property in excess of 15% of the Appraised
Value of such property, no Buydown Mortgage Loan with a Loan-to-Value Ratio at
origination of more than 90% involves Buydown Funds contributed by the seller
of the related Mortgaged Property in excess of 10% of the Appraised Value of
such property, and no Buydown Mortgage Loan involves Buydown Funds in excess of
_____% of its Principal Balance at the Cut-off Date;
(x). No Buydown Mortgage Loan provides for a
reduction in interest rate of more than five percentage points in any given
year, and no buydown period exceeds five years; and
(xi). Buydown Mortgage Loans do not represent in
excess of _____% of the aggregate Principal Balance of the Mortgage Loans at
the Cut-off Date.
It is understood and agreed that the representations
and warranties set forth in this Section 2.03(b) (including those set forth in
Exhibit G to this agreement) shall survive delivery of the respective Mortgage
Files to the Trustee or any Custodian. Upon discovery by either the Company,
the Master Servicer, the Trustee or any Custodian of a breach of any of the
foregoing representations and warranties which 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.
Within 90 days of its discovery or its receipt of notice of breach, the Master
Servicer shall cure such breach in all material respects or shall repurchase
the Mortgage Loan from the Trustee. Any such repurchase by the Master Servicer
shall be accomplished in the manner and at the repurchase price set forth in
Section 2.02. It is understood and agreed that the obligation of the Master
Servicer to repurchase any Mortgage Loan as to which a breach has occurred and
is continuing shall constitute the sole remedy respecting such breach available
to Certificateholders or the Trustee on behalf of Certificateholders.
Section 2.04. Authentication of Certificates. The
Trustee acknowledges the assignment to it of the Mortgage Loans and the
delivery of the Mortgage Files to it or any Custodian on its behalf, and,
concurrently with such delivery, has caused to be authenticated and delivered
to or upon the order of the Company, in exchange for the Mortgage Loans,
Certificates duly authenticated by the Certificate Registrar in authorized
denominations evidencing the entire ownership of the Trust Fund.
ARTICLE III.
Administration and Servicing of Mortgage Loans
Section 3.01. Master Servicer to Act as Servicer.
The Master Servicer shall service and administer the Mortgage Loans and shall
have full power and authority, acting alone and/or through Sub-Servicers as
provided in Section 3.02, to do any and all things which 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 of this
agreement, (i) to execute and deliver customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this agreement), (iii) to collect any Insurance
Proceeds and Liquidation Proceeds, and (iv) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property securing any Mortgage
Loan; provided that the Master Servicer shall take no action which is
inconsistent with or prejudices the interest of the Trustee or the
Certificateholders in any Mortgage Loan or the rights and interest of the
Trustee or the Certificateholders under this agreement. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the name
of a Sub-Servicer is hereby authorized and empowered by the Trustee when the
Master Servicer or the Sub-Servicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and
all other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. The Trustee shall furnish the Master
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to service and administer the
Mortgage Loans. In servicing and administering any Mortgage Loan respecting
which there is no Sub-Servicer, the Master Servicer shall, to the extent not
inconsistent with this agreement, comply with the Program Guide as if it were
the originator of such Mortgage Loan and had retained the servicing rights and
obligations in respect of it.
All costs incurred by the Master Servicer or by
Sub-Servicers in effecting the timely payment of taxes and assessments on the
properties subject to the Mortgage Loans shall not, for the purpose of
calculating monthly distributions to Certificateholders, be added to the amount
owing under the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loan so permit, and such costs shall be recoverable by the Master
Servicer.
Section 3.02. Sub-Servicing Agreements Between
Master Servicer and Sub-Servicers. The Master Servicer may enter into
Sub-Servicing Agreements with Sub-Servicers for the servicing and
Administration of certain of the Mortgage Loans. In the event that such
Sub-Servicing Agreements exist, each Sub-Servicer will represent and warrant
that it is duly organized and existing under any applicable laws of the United
States or any state and is duly qualified and licensed to do business in each
state in which property subject to a Mortgage to be serviced under the related
Sub-Servicing Agreement is located. Each Sub-Servicing Agreement will be upon
such terms and conditions as are required or permitted by the Program Guide and
are not inconsistent with this agreement and as the Master Servicer and the
Sub-Servicer have agreed and shall be effective as of the date of conveyance of
the mortgage Loans by the Company to the Trustee. A representative form of
Sub-Servicing Agreement is attached to this agreement as Exhibit F. The Master
Servicer and the Sub-Servicer may enter into amendments to it or different
forms of Sub-Servicing agreements and the attached form is merely provided for
information and shall not be deemed to limit in any respect the discretion of
the Master Servicer to modify or enter into different Sub-Servicing Agreements;
provided, however, that any such amendments or different forms shall be
consistent with and not violate the provisions of this Agreement or the Program
Guide and provided further that the substance of any such material amendment or
material change shall be transmitted promptly to the Trustee.
Section 3.03. Successor Sub-Servicers. The Master
Servicer shall be entitled to terminate any Sub-Servicing Agreement that may
exist in accordance with the terms and conditions of such Sub-Servicing
Agreement and without any limitation by virtue of this agreement; provided,
however, that in the event of termination of any Sub-Servicing Agreement by the
Master Servicer or the Sub-Servicer, the Master Servicer shall either act as
servicer of the related Mortgage Loan or enter into a Sub-Servicing Agreement
with a successor Sub-Servicer which will be bound by the terms of the related
Sub-Servicing Agreement.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement, any of the provisions of this
agreement relating to agreements or arrangements between the Master Servicer or
a Sub-Servicer or reference to actions taken through Residential Funding or a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of
Section 3.01 without diminution of such obligation or liability by virtue of
such Sub-Servicing Agreements or arrangements or by virtue of indemnification
from the Sub-Servicer, Residential Funding or the Company and to the same
extent and under the same terms and conditions as if the Master Servicer alone
were servicing and administering the Mortgage Loans. The Master Servicer shall
be entitled to enter into any agreement with Residential Funding, the Company
or a Sub-Servicer for indemnification of the Master Servicer and nothing
contained in this agreement shall be deemed to limit or modify such
indemnification.
Section 3.05. No Contractual Relationship Between
Sub-Servicer and Trustee or Certificateholders. Any Sub-Servicing Agreement
that may be entered into and any other transactions or services relating to the
Mortgage Loans involving a Sub-Servicer in its capacity as such and not as an
originator shall be deemed to be between the Sub-Servicer and the Master
Servicer alone and the Trustee and Certificateholders shall not be deemed
parties to it and shall have no claims, rights, obligations, duties or liabilities
with respect to the Sub-Servicer except as set forth in Section 3.06.
Section 3.06. Assumption or Termination of
Sub-Servicing Agreement by Trustee. In the event the Master Servicer shall for
any reason no longer be the servicer (including by reason of an Event of
Default), the Trustee or its designee shall assume all of the rights and
obligations of the Master Servicer under each Sub-Servicing Agreement that may
have been entered into. The Trustee, its designee or the successor servicer for
the Trustee shall be deemed to have assumed all of the Master Servicer's
interest in it and to have replaced the Master Servicer as a party to the
Sub-Servicing Agreement to the same extent as if the Sub-Servicing Agreement
had been assigned to the assuming party except that the Master Servicer shall
not be relieved of any liability or obligations under the Sub-Servicing
Agreement.
The Master Servicer shall, upon request of the
Trustee but at the expense of the Master Servicer, deliver to the assuming
party all documents and records relating to the Sub-Servicing Agreement and the
Mortgage Loans then being serviced and an accounting of amounts collected and
held by it and otherwise use its best efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan
Payments; Certificate Account. The Master Servicer shall make reasonable effort
to collect all payments called for under the terms and provisions of the
Mortgage Loans, and shall, to the extent such procedures shall be consistent
with this Agreement and the terms and provisions of the Insurance Policy, the
Bankruptcy Bond and any related Primary Insurance Policy, follow such
collection procedures as it follows with respect to mortgage loans comparable
to the Mortgage Loans and held in its own portfolio. Consistent with the
foregoing, the Master 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 and (ii) only upon determining that the coverage of such
Mortgage Loan by the Insurance Policy, the Bankruptcy Bond and any related
Primary Insurance Policy will not be affected, extend the Due Dates for
payments due on a Mortgage Note for a period not greater than 125 days. In the
event of any such arrangement, the Master Servicer shall make timely advances
on the related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification of it by
reason of such arrangements.
The Master Servicer shall establish and maintain a
separate Certificate Account or Accounts in which the Master Servicer shall
deposit on a daily basis, except as otherwise specifically provided in this
agreement, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal of and
interest on the Mortgage Loans due on the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) All payments on account of interest on the Mortgage Loans;
(iii) All Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the Master
Servicer's normal servicing procedures;
(iv) All Monthly Advances made by the Master Servicer pursuant to
Section 4.03;
(v) Any amounts required to be deposited by the Master Servicer
pursuant to the first paragraph of Section 3.12;
(vi) All proceeds of any Mortgage Loans or property acquired in respect
thereof repurchased pursuant to Sections 2.02, 2.03 or 9.01; and
(vii) Any Buydown Funds and Buydown Earnings required to be deposited
by the Master Servicer in the Certificate Account pursuant to Section 3.20.
The foregoing requirements for deposit in the
Certificate Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
prepayment or late payment charges or assumption fees need not be deposited by
the Master Servicer in the Certificate Account. In the event the Master
Servicer shall deposit in the Certificate Account any amount not required to be
deposited in it, the Master Servicer may at any time withdraw such amount from
the Certificate Account, any provision in this agreement to the contrary
notwithstanding.
The Company may cause the institution maintaining
the Certificate Account to invest the funds in the Certificate Account in
Permitted Investments, which shall mature not later than the Business Day next
preceding the Distribution Date next following the date of such investment
(except that if such Permitted Investment is an obligation of the institution
that maintains the Certificate Account, then such Permitted Investment shall
mature not later than such Distribution Date) and shall not be sold or disposed
of prior to its maturity. All such Permitted Investments shall be made in the
name of the Trustee (in its capacity as such) or its nominee. All income and
gain realized from any such investment shall be for the benefit of the Company
and shall be subject to its withdrawal or order from time to time. The amount
of any losses incurred in respect of any such investments shall be deposited in
the Certificate Account by the Company out of its own funds immediately as
realized.
The Master Servicer shall give notice to the Trustee
of the location of the Certificate Account, and of any change of it, prior to
the use of it.
In those cases where a Sub-Servicer is servicing a
Mortgage Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will
establish and maintain a Sub-Servicing Account. The Sub-Servicer is required to
deposit into the Sub-Servicing Account on a daily basis all proceeds of
Mortgage Loans received by the Sub-Servicer, less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement. On the 20th day of each
month the Sub-Servicer shall remit to the Master Servicer for deposit in the
Certificate Account all funds held in the Sub-Servicing Account with respect to
each Mortgage Loan serviced by such Sub-Servicer. The Sub-Servicer shall also
remit on the scheduled date of remittance any monthly installments of principal
and interest less its servicing fee on any Mortgage Loan for which payment was
not received. This obligation to advance with respect to each Mortgage Loan
shall be subject to a maximum of 6 delinquent installments, at which point no
additional advances shall be necessary until such time as the Mortgage Loan has
been reinstated and thereafter is again in default. Any installments as to
which the Sub-Servicer has not made an advance will be subject to the Master
Servicer's limited obligation to advance set forth in this agreement.
Section 3.08. Collection of Taxes, Assessments and
Similar Items; Servicing Accounts. In addition to the Certificate Account, the
Master Servicer and the Sub-Servicers shall establish and maintain one or more
Servicing Accounts and shall deposit and retain in them all collections from
the Mortgagors for the payment of taxes, assessments, hazard insurance
premiums, Primary Insurance Policy premiums, if applicable, or comparable items
for the account of the Mortgagors. Servicing Accounts shall be Eligible
Accounts. Withdrawals of amounts so collected from the Servicing Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance
premiums, Primary Insurance Policy premiums, if applicable, or comparable
items, to reimburse the Master Servicer out of related collections for any
payments made pursuant to Sections 3.11 (with respect to the Primary Insurance
Policy) and 3.12 (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required, to Mortgagors on balances in the Servicing Account or to clear and
terminate the Servicing Account at the termination of this Agreement in
accordance with Section 9.01. As part of its servicing duties, the Master
Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in this
account, to the extent required by law.
Section 3.09. Access to Certain Documentation and
Information Regarding the Mortgage Loans. In the event that compliance with
this Section 3.09 shall make the Certificates legal for investment by federally
insured savings and loan associations, the Master Servicer shall provide to the
Trustee,the Federal Home Loan Bank Board, the Federal Savings and Loan
Insurance Corporation and the Supervisory Agents and examiners of such Board
and such Corporation access to the documentation regarding the Mortgage Loans
required by applicable regulations of the Federal Home Loan Bank Board, such
access being afforded without charge but only upon reasonable request and
during normal business hours at the offices of the Master Servicer designated by
it. The Master Servicer shall permit such representatives to photocopy any such
documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. Permitting Withdrawals From the
Certificate Account. The Master Servicer may, from time to time, make
withdrawals from the Certificate Account for the following purposes:
(i) to make payments to Certificateholders in the amounts and in the
manner provided for in Section 4.01;
(ii) to reimburse itself for advances of Master Servicer funds made
pursuant to Section 4.03, the Master Servicer's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on particular
Mortgage Loans (including, for this purpose, Insurance Proceeds and Liquidation
Proceeds which represent late recoveries of payments of principal and/or
interest respecting which any such advance was made);
(iii) to reimburse itself from Insurance Proceeds and Liquidation
Proceeds for amounts expended by it pursuant to Section 3.14 in good faith in
connection with the restoration of property damaged by an Uninsured Cause;
(iv) to reimburse itself from Insurance Proceeds for Insured Expenses
and to pay to itself from Insurance Proceeds any unpaid servicing compensation
on the related Mortgage Loan, such payment of servicing compensation being
limited to the amount, if any, by which the aggregate of Liquidation Proceeds
and Insurance Proceeds received in connection with the liquidation of a
defaulted Mortgage Loan is, after the deduction of Insured Expenses and any
amounts deducted pursuant to subclause (iii) above, in excess of the Principal
Balance of such Mortgage Loan together with accrued and unpaid interest on it
at the Pass-Through Rate;
(v) to reimburse itself from Liquidation Proceeds for Liquidation
Expenses and, to the extent that Liquidation Proceeds after such reimbursement
and any other reimbursement pursuant to subclause (iii) above are in excess of
the Principal Balance of the related Mortgage Loan together with accrued and
unpaid interest on it at the Pass-Through Rate, to pay, first, to itself out of
such excess the amount of any unpaid servicing compensation on the related
Mortgage Loan and, second, to the Company the balance of any such excess;
(vi) to pay to itself as servicing compensation that portion of any
payment as to interest which, when deducted, will result in the remaining
amount of such interest being interest at the Pass-Through Rate on the
Principal Balance of such Mortgage Loan;
(vii) to pay to itself or the Company with respect to each Mortgage
Loan or property acquired in respect of it that has been repurchased pursuant
to Section 2.02, 2.03, or 9.01 all amounts received on it and not distributed
as of the date on which the related Principal Balance is determined;
(viii) to reimburse itself for any Nonrecoverable Advance or Advances;
(ix) to reimburse itself or the Company for expenses incurred by and
reimbursable to it or the Company pursuant to Section 6.03; and
(x) to clear and terminate the Certificate Account pursuant to Section
9.01.
Since, in connection with withdrawals pursuant to
subclauses (ii) through (vii), inclusive, the Master Servicer's entitlement to
them is limited to collections or other recoveries on the related Mortgage
Loan, the Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (ii)
through (vii), inclusive.
Section 3.11. Maintenance of the Insurance Policy
and Primary Insurance Policies; Collections under them. The Master Servicer
covenants and agrees to exercise its best reasonable efforts to maintain and
keep the Insurance Policy in full force and effect throughout the term of this
agreement, unless coverage under it has been exhausted through payment of
claims. The Master Servicer as servicer agrees to pay the premiums for the
Insurance Policy on a timely basis. In the event that the Insurer shall cease
to be a Qualified Insurer because it shall not be qualified to transact a
mortgage guaranty insurance business under the laws of the state of its
principal place of business or any other state which has jurisdiction over the
Insurer in connection with the Insurance Policy or the Insurance Policy is
cancelled or terminated for any reason (other than the exhaustion of the total
coverage), the Master Servicer shall exercise its best reasonable efforts to
obtain from another Qualified Insurer a replacement policy comparable to the
Insurance Policy with a total coverage which is equal to the then existing
coverage of the Insurance Policy; provided, however, that if the cost of any
such replacement policy shall be greater than the cost of the Insurance Policy,
the amount of coverage of such replacement policy may be reduced to a level
such that the premium rate for it shall not exceed 150% of the premium rate on
such Insurance Policy. In the event the Insurer shall cease to be a Qualified Insurer
because it is approved as an insurer by neither FHLMC or FNMA, the Master
Servicer agrees to review, not less often than monthly, the financial condition
of the Insurer with a view towards determining whether recoveries under the
Insurance Policy are jeopardized for reasons related to the financial condition
of the Insurer. If the Master Servicer determines that recoveries are so
jeopardized, it shall exercise its best reasonable efforts to obtain from
another Qualified Insurer a replacement insurance policy subject to the cost
limitation set forth above.
The Master Servicer shall not take, or permit any
Sub-Servicer to take, any action which would result in non-coverage under any
applicable Primary Insurance Policy of any loss which, but for the actions of
the Master Servicer or Sub-Servicer, would have been covered under that policy.
The Master Servicer shall use its best reasonable efforts to be named a loss
payee under each Primary Insurance Policy. The Master Servicer shall use its
best reasonable efforts to keep in full force and effect each such Primary
Insurance Policy until (i) the related Mortgage Loan is liquidated in the case
of a Mortgage Loan secured by a second or vacation home or property located in
the State of California, (ii) the principal balance of the related Mortgage
Loan is reduced to 80% or less of the Appraised Value in the case of a Mortgage
Loan having a Loan-to-Value Ratio at origination in excess of 80%, and (iii)
the principal balance of the related Mortgage Loan is reduced to 60% or less of
its Appraised Value in the case of a Mortgage Loan the original principal
amount of which exceeded $250,000 [specify any other requirements]. The
Master Servicer shall not cancel or refuse to renew any such Primary Insurance
Policy in effect at the date of the initial issuance of the Certificates that
is required to be kept in force under this agreement unless the replacement
Primary Insurance Policy for such cancelled or non-renewed policy is maintained
with an insurer whose claims-paying ability is acceptable to each Rating Agency
for mortgage pass-through certificates [having a rating equal to or better
than the rating currently assigned to the Certificates by such Rating Agency].
In connection with its activities as administrator
and servicer of the Mortgage Loans, the Master Servicer agrees to present, on
behalf of itself, the Trustee and Certificateholders, claims to the Insurer
under the Insurance Policy and to the insurer under any Primary Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under the Insurance Policy and any Primary
Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section
3.07, any amounts collected by the Master Servicer under the Insurance Policy
and any Primary Insurance Policies shall be deposited in the Certificate
Account, subject to withdrawal pursuant to Section 3.10. In those cases in
which a Mortgage Loan is serviced by a Sub-Servicer, the Sub-Servicer, on
behalf of itself, the trustee, and the Certificateholders, will present claims to
the insurer under the Primary Insurance Policy and all collections under that
policy shall be deposited initially in the Sub-Servicing Account.
Section 3.12. Maintenance of Hazard Insurance, the
Special Hazard Insurance Policy and Errors and Omissions and Fidelity Coverage.
The Master Servicer shall cause to be maintained for each Mortgage Loan fire
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements securing such Mortgage Loan or its
principal balance, whichever is less. The Master Servicer shall also maintain
on property acquired upon foreclosure, or deed in lieu of foreclosure, of any
Mortgage Loan, fire 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. The Master Servicer shall use its best efforts to be named a
loss payee under such policies. Pursuant to Section 3.07, any amounts collected
by the Master Servicer under any such policies (other than amounts to be
applied to the restoration or repair of the property subject to the related
Mortgage or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Certificate Account, subject to withdrawal pursuant to Section
3.10. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating monthly distributions to
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of related late payments by the
Mortgagor or out of Insurance Proceeds or Liquidation Proceeds to the extent
permitted by Section 3.10. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage other than pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance. When the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area, the Master Servicer shall cause flood insurance (to the extent available)
to be maintained. In the event that the Master Servicer shall obtain and
maintain a blanket policy insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first sentence of this Section 3.12, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Master Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence of
this Section 3.12, and there shall have been a loss which would have been
covered by such policy, deposit in the Certificate Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In connection with its activities as administrator and servicer of the Mortgage
Loans, the Master Servicer agrees to present, on behalf of itself, the Trustee
and Certificateholders, claims under any such blanket policy.
As long as the Insurance Policy is in effect, the
Master Servicer covenants and agrees to exercise its best reasonable efforts to
maintain and keep the Special Hazard Insurance Policy in full force and effect
unless coverage under that policy has been exhausted through payment of claims.
The Master Servicer as servicer agrees to pay the premium for the Special
Hazard Insurance Policy on a timely basis. In the event that the Special Hazard
Insurance Policy shall be cancelled or terminated for any reason (other than
the exhaustion of total policy coverage), the Master Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to the Special Hazard Insurance Policy with a total coverage which
is equal to the then existing coverage of the Special Hazard Insurance Policy;
provided, however, that if the cost of any replacement policy shall be greater
than the cost of the Special Hazard Insurance Policy, the amount of coverage of
such replacement policy may be reduced to a level such that the cost of such
replacement policy shall not exceed the cost of the Special Hazard Insurance
Policy. In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present, on behalf of itself, the
Trustee and Certificateholders, claims to the Special Hazard Insurers under the
Special Hazard Insurance Policy and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under the Special Hazard
Insurance Policy respecting defaulted Mortgage Loans. Pursuant to Section 3.07,
any amounts collected by the Master Servicer under the Special Hazard Insurance
Policy which are in the nature of Insurance Proceeds shall be deposited in the
Certificate Account, subject to withdrawal pursuant to Section 3.10. Any other
amounts collected by the Master Servicer under the Special Hazard Insurance
Policy shall be applied by it towards the restoration of the related property
to a condition requisite to the presentation of claims on the related Mortgage
Loan to the Insurer under the Insurance Policy.
The Master Servicer shall obtain and maintain at its
own expense and keep in full force and effect throughout the term of this
Agreement a blanket fidelity bond and an errors and omissions insurance policy
covering the Master Servicer's officers and employees and other persons acting
on behalf of the Master Servicer in connection with its activities under this
Agreement. The amount of coverage shall be at least equal to the coverage that
would be required by FNMA or FHLMC, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for FNMA or FHLMC in addition to other mortgage loans being
serviced and administered by the Master Servicer. In the event that any such
bond or policy ceases to be in effect, the Master Servicer shall obtain a
comparable replacement bond or policy from an issuer or insurer, as the case
may be, meeting the requirements, if any, of the Program Guide and acceptable
to the Company.
Section 3.13. Enforcement of Due-On-Sale Clauses;
Assumption Agreements.
(a). When any property subject to a Mortgage is
conveyed by the Mortgagor, the Master Servicer shall 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, (i) the Master
Servicer shall not be deemed to be in default under this Section 3.13(a) by
reason of any transfer or assumption which the Master Servicer is restricted by
law from preventing and (ii) if the Master Servicer determines that it is
reasonably likely that any Mortgagor will bring, or if any Mortgagor does
bring, legal action to declare invalid or otherwise avoid enforcement of a due
on sale clause contained in any Mortgage Note or Mortgage, the Master Servicer
shall not be required to contest such action.
(b). Subject to the Master 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 is to be 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 which
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 Master Servicer shall deliver or cause to be delivered to the Trustee
for signature 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. The Master Servicer shall also deliver or cause to be
delivered to the Trustee with the foregoing documents a letter explaining the
nature of such documents and the reason or reasons why the Trustee's signature
is required. With such letter the Master Servicer shall deliver to the Trustee
a certificate of a Servicing Officer certifying that: (i) a Servicing Officer
has examined and approved such documents as to form and substance, (ii) the
Trustee's execution and delivery of the documents will not conflict with or
violate any terms of this agreement or cause the unpaid balance and interest on
the Mortgage Loan to be uncollectible in whole or in part, (iii) any required
consents of insurers under any Required Insurance Policies have been obtained
and (iv) subsequent to the closing of the transaction involving the assumption
or transfer (A) the Mortgage Loan will continue to be secured by a first
mortgage lien pursuant to the terms of the Mortgage, (B) such transaction will
not adversely affect the coverage under any Required Insurance Policies, (C)
the Mortgage Loan will fully amortize over its remaining term, (D) the interest
rate on the Mortgage Loan will not be altered nor will the term of the Mortgage
Loan be increased and (E) if the seller/transferor of the Mortgaged Property is
to be released from liability on the Mortgage Loan, such release will not
(based on the Master Servicer's good faith determination) adversely affect the
collectibility of the Mortgage Loan. Upon receipt of such certificate, the
Trustee shall execute any necessary instruments for such assumption or
substitution of liability. Upon the closing of the transactions contemplated by
such documents, the Master Servicer shall cause the originals of the assumption
agreement, the release (if any), or the modification or supplement to the
Mortgage Note or Mortgage to be delivered to the Trustee and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the Master Servicer
for entering into an assumption or substitution of liability agreement will be
retained by the Master Servicer as additional servicing compensation.
Section 3.14. Realization Upon Defaulted Mortgage
Loans. The Master Servicer shall foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into
and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07. In
connection with such foreclosure or other conversion, the Master Servicer
shall, consistent with Section 3.11, follow such practices and procedures as it
shall deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities and as shall be required or permitted by the
Program Guide. The foregoing is subject to the proviso that the Master Servicer
shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses and (ii) that such expenses will be
recoverable to it either through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Certificate Account
pursuant to Section 3.10) or through Insurance Proceeds (respecting which it
shall have similar priority).
Section 3.15. Trustee to Cooperate; Release of
Mortgage Files.
(a). Upon the payment in full of any Mortgage Loan,
or the receipt by the Master Servicer of a notification that payment in full
will be escrowed in a manner customary for such purposes, the Master Servicer
will immediately notify the Trustee (if it holds the related Mortgage File) by
a certification (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Certificate Account pursuant to
Section 3.07 have been or will be so deposited) of a Servicing Officer and
shall request delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release the related
Mortgage File to the Master Servicer and execute and deliver to the Master
Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage,
together with the Mortgage Note with written evidence of cancellation on it. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account.
(b). From time to time as is appropriate for the
servicing or foreclosure of any Mortgage Loan, the Master Servicer shall
deliver to the Trustee a certificate of a Servicing Officer requesting that
possession of all, or any document constituting part of, the Mortgage File to
be released to the Master Servicer and certifying as to the reason for such
release and that such release will not invalidate any insurance coverage
provided in respect of the Mortgage Loan under any of the Required Insurance
Policies. With such certificate, the Master Servicer shall deliver to the
Trustee a Trust Receipt signed by a Servicing Officer on behalf of the Master
Servicer in substantially the form attached as Exhibit H to this agreement, and
upon receipt of the foregoing, the Trustee shall deliver the Mortgage File to
the Master Servicer. The Master Servicer shall cause each Mortgage File or any
document in it so released to be returned to the Trustee when the need for it
by the Master Servicer no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Certificate Account or (ii) the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal
action or other proceedings for the foreclosure of the Mortgaged Property
either judicially or non-judicially, and the Master Servicer has delivered to
the Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. In the event of the
liquidation of a Mortgage Loan, the Trustee shall deliver the Trust Receipt
with respect to it to the Master Servicer upon deposit of the related
Liquidation Proceeds in the Certificate Account.
(c). The Trustee shall execute and deliver to the
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. Together with such
documents or pleadings, the Master Servicer shall deliver to the Trustee a
certificate of a Servicing Officer requesting that such pleadings or documents
be executed by the Trustee and certifying as to the reason such documents or
pleadings are required and that the execution and delivery of them by the
Trustee will not invalidate any insurance coverage under the Required Insurance
Policies or invalidate or otherwise affect the lien of the Mortgage, except for
the termination of such a lien upon completion of the foreclosure or trustee's
sale.
Section 3.16. Servicing Compensation. As
compensation for its activities under this agreement, the Master Servicer shall
be entitled to withdraw from the Certificate Account the amounts provided for
by Section 3.10(vi). In addition, the Master Servicer shall be entitled to
servicing compensation out of Insurance Proceeds or Liquidation Proceeds to the
extent permitted by Section 3.10. Additional servicing compensation in the form
of prepayment charges, assumption fees, late payment charges or otherwise shall
be retained by the Master Servicer to the extent not required to be deposited
in the Certificate Account pursuant to Section 3.07. The Master Servicer shall
be required to pay all expenses incurred by it in connection with its servicing
activities under this agreement (including payment of premiums for Primary
Insurance Policies, if any, to the extent such premiums are not paid by the
related Mortgagors, payment of the premiums for the Insurance Policy, payment
of the premiums for the Bankruptcy Bond, maintenance of the insurance required
by Section 3.12 and compensation of Sub-Servicers) and shall not be entitled to
reimbursement for them except as specifically provided in Sections 3.10 and
3.14.
Section 3.17. Reports to the Trustee and the
Company; Certificate Account Statements. Not later than fifteen days after each
Distribution Date, the Master Servicer shall forward to the Trustee and the Company
a statement, certified by a Servicing Officer, setting forth the status of the
Certificate Account as of the close of business on such Distribution Date and
showing, for the period covered by such statement, the aggregate of deposits in
or withdrawals from the Certificate Account for each category of deposit
specified in Section 3.07 and each category of withdrawal specified in Section
3.10.
Section 3.18. Annual Statement as to Compliance. The
Master Servicer will deliver to the Trustee on or before _________ of each
year, beginning with the first _________ that occurs at least months after the
Cut-off Date, an Officers' Certificate stating, as to each signer of it, that
(i) a review of the activities of the Master Servicer during the preceding
calendar year and of 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 Master Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status of it, (iii) a Servicing Officer has
conducted an examination of the activities of each Sub-Servicer during the
immediately preceding year and its performance under its Sub-Servicing
Agreement, (iv) a Servicing Officer has examined each Sub-Servicer fidelity
bond and Sub-Servicer errors and omissions insurance policy and that each such
bond and policy are in effect and conform to the requirements of the
Sub-Servicer's Sub-Servicing Agreement and (v) to the best of such Servicing
Officer's knowledge, based on such examination, each Sub-Servicer has performed
and fulfilled its duties, responsibilities and obligations under its
Sub-Servicing Agreement in all material respects throughout such year, or if
there has been a default in the performance or fulfillment of any such duties,
responsibilities or obligations, specifying each such default known to such Servicing
Officer and the nature and status of it.
Section 3.19. Annual Independent Public Accountants'
Servicing Report. On or before _________ of each year, beginning with the first
_________ that occurs at least _________ months after the Cut-off Date, the Master
Servicer at its expense shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Trustee to the effect that such firm has examined
certain documents and records relating to the servicing of the mortgage loans
under pooling and servicing agreements substantially similar one to another
(such statement to have attached to it a schedule setting forth the pooling and
servicing agreements covered by it, including this agreement) and that, on the
basis of such examination conducted substantially in compliance with the
Uniform Single Audit Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC, such servicing has been conducted in compliance
with such pooling and servicing agreements except for such significant
exceptions or errors in records that, in the opinion of such firm, the Uniform
Single Audit Program for Mortgage Bankers or the Audit Program for Mortgages
serviced for FHLMC requires it to report. In rendering such statement, such
firm may rely, as to matters relating to direct servicing of mortgage loans by
Sub-Servicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Audit Program for Mortgage
Bankers or the Audit Program for Mortgages serviced for FHLMC (rendered within
one year of such statement) of independent public accountants with respect to
the related Sub-Servicer. For purposes of such statement, such firm may
conclusively assume that all pooling and servicing agreements among the
Company, the Master Servicer and the Trustee relating to Conduit Mortgage
Pass-Through Certificates evidencing an interest in first mortgage loans are
substantially similar one to another except for any such pooling and servicing
agreement which, by its terms, specifically states otherwise.
Section 3.20. Application of Buydown Funds. With
respect to each Buydown Mortgage Loan, the Master Servicer has deposited
Buydown Funds in an interest-bearing custodial account (the "Buydown
Account"), which shall be an Eligible Account. In the case of a Buydown
Mortgage Loan in respect of which the buydown plan requires that only the
Buydown Funds (and not any earnings thereon) be applied to payments of interest
on such Buydown Mortgage Loan, such Buydown Funds shall be equal to an
aggregate amount of payments that, when added, as required by such buydown
plan, to the amount required to be paid by the related mortgagor on each Due
Date in accordance with such buydown plan, is equal to the full monthly payment
due on such Due Date. In the case of a Buydown Mortgage Loan in respect of
which the amount of the Buydown Funds is determined through a discounting
process set forth in the related buydown plan, such Buydown Funds shall be
equal to an aggregate amount of payments that, together with Buydown Earnings
on them computed at the rate of 6% per annum [compounded monthly], when
added, as required by such buydown plan, to the amount required to be paid by
the related Mortgagor on each Due Date in accordance with such buydown plan, is
equal to the full monthly payment due on such Due Date. The Master Servicer
will withdraw from the Buydown Account and deposit in the Certificate Account
on or before each Distribution Date the amount, if any, of the Buydown Funds
and Buydown Earnings on them, if any, for each Buydown Mortgage Loan that, when
added to the amount due on such date from the Mortgagor on such Buydown
Mortgage Loan, equals the full monthly payment due on such Buydown Mortgage
Loan.
If the Mortgagor on a Buydown Mortgage Loan prepays
such loan in its entirety during the period (the "Buydown Period")
when Buydown Funds are required to be applied to such Buydown Mortgage Loan,
the Master Servicer shall withdraw from the Buydown Account and deposit in the
Certificate Account the Buydown Funds for such Buydown Mortgage Loan remaining
in the Buydown Account. The Buydown Earnings, if any, in respect of such
Buydown Mortgage Loan remaining in such Buydown Account shall be withdrawn and
disbursed to the Company. The amount of Buydown Funds deposited in the
Certificate Account pursuant to the preceding sentence will reduce the amount
required to be paid by the Mortgagor to fully prepay the related Mortgage Loan.
If the Mortgagor on a Buydown Mortgage Loan defaults on such loan during the
Buydown Period and the property securing such Buydown Mortgage Loan is sold in
the liquidation of it (either by the Master Servicer, the Insurer or the
insurer under any related Primary Insurance Policy), the Master Servicer shall
withdraw from the Buydown Account and deposit in the Certificate Account or pay
to (i) the Insurer if the Mortgaged Property has been transferred to the
Insurer pursuant to the Insurance Policy and 100% of the related claim under
the Insurance Policy is paid or (ii) the insurer under any related Primary
Insurance Policy if the Mortgaged Property is transferred to such insurer and
such insurer pays all of the loss incurred in respect of such default, the Buydown
Funds for such Buydown Mortgage Loan still held in the Buydown Account. Any
amount deposited in the Certificate Account pursuant to the preceding sentence
will reduce the amount owed on the Mortgage Loan. Any Buydown Earnings in
respect of such Buydown Funds shall be disbursed to the Company.
Section 3.21. Maintenance of the Bankruptcy Bond;
Collections under it. The Master Servicer covenants and agrees to exercise its
best reasonable efforts to maintain and keep the Bankruptcy Bond in full force
and effect throughout the term of this Agreement unless coverage has been
exhausted through payment of claims. The Master Servicer as servicer agrees to
pay the premiums for the Bankruptcy Bond on a timely basis. Coverage under the
Bankruptcy Bond may be cancelled or reduced by the Master Servicer to the
extent permitted by each Rating Agency, provided the then current rating on the
Certificates by each Rating Agency is maintained.
In connection with its activities as administrator
and servicer of the Mortgage Loans, the Master Servicer agrees to present, on
behalf of itself, the Trustee and Certificateholders, claims to the issuer of
the Bankruptcy Bond and, in this regard, to take such reasonable action as
shall be necessary to permit recovery under the Bankruptcy Bond. Pursuant to
Section 3.07, any amounts collected by the Master Servicer under the Bankruptcy
Bond shall be deposited in the Certificate Account, subject to withdrawal
pursuant to Section 3.10.
Section 3.22. Rights of the Company In Respect of the
Master Servicer. The Master Servicer shall afford the Company, upon reasonable
notice, during normal business hours access to all records maintained by the
Master Servicer in respect of its rights and obligations and under this
agreement and access to officers of the Master Servicer responsible for such
obligations. Upon request, the Master Servicer shall furnish the Company with
its most recent financial statements and such other information as the Master
Servicer possesses regarding its business, affairs, property and condition,
financial or otherwise. The Company may, but is not obligated to, enforce the
obligations of the Master Servicer under this agreement and may, but is not
obligated to, perform, or cause a designee to perform, any defaulted obligation
of the Master Servicer under this agreement or exercise the rights of the
Master Servicer under this agreement; provided that the Master Servicer shall
not be relieved of any of its obligations under this agreement by virtue of
such performance by the Company or its designee. The Company shall not have any
responsibility or liability for any action or failure to act by the Master and
is not obligated to supervise the performance of the Master Servicer under this
agreement or otherwise.
ARTICLE IV.
Payments to Certificateholders
Section 4.01. Distributions. On each Distribution
Date the Master Servicer shall distribute to each Certificateholder of record
on the next preceding Record Date (other than as provided in Section 9.01
respecting the final distribution) either by wire transfer in immediately
available funds to the account of such Certificateholder at a bank or other
entity having appropriate facilities for such transfers, if such
Certificateholder has so notified the Master Servicer, or, if such
Certificateholder has not so notified the Master Servicer, by check mailed to
such Certificateholder at the address of such holder appearing in the
Certificate Register such Certificateholder's pro rata share (based on the
aggregate Fractional Undivided Interest represented by Certificates held by
such holder) of all amounts deposited in the Certificate Account which
represent payments of the nature required to be distributed on such
Distribution Date pursuant to the form of Certificate hereinbefore set forth
and all amounts, if any, which the Master Servicer may become obligated to
distribute pursuant to Section 4.03 in respect of such Distribution Date.
Section 4.02. Statements to Certificateholders.
Concurrently with each distribution charged to the Certificate Account the
Master Servicer shall forward by mail to each Certificateholder and the Company
a statement setting forth:
(i) the amount of such distribution allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments included in it;
(ii) the amount of such distribution allocable to interest;
(iii) the amount of related servicing compensation received by the
Master Servicer and such other customary information as the Master Servicer
deems necessary or desirable to enable Certificateholders to prepare their tax
returns;
(iv) the aggregate Principal Balance of the Mortgage Loans at the close
of business on such Distribution Date;
(v) the number and aggregate principal balances of Mortgage Loans
delinquent (a) one month and (b) two or more months;
(vi) the book value (within the meaning of 12 CFR §571.13 or comparable
provision) of any real estate acquired through foreclosure or grant of a deed
in lieu of foreclosure;
(vii) the amount of coverage under the Insurance Policy as of the close
of business on the applicable Determination Date;
(viii) the amount of coverage under the Special Hazard Insurance Policy
as of the close of business on the applicable Determination Date;
(ix) the amount of coverage under the Bankruptcy Bond as of the close
of business on the applicable Determination Date; and
[(x) the weighted average Pass-Through Rate.]
In the case of information furnished pursuant to
subclauses (i)–(iii) above, the amounts shall be expressed as a dollar amount
per Single Certificate.
Within a reasonable period of time after the end of
each calendar year, the Master Servicer shall furnish to each person who at any
time during the calendar year was a Certificateholder a statement containing
the information set forth in subclauses (i)–(iii) above aggregated for such
calendar year or applicable portion of it during which such person was a
Certificateholder. Such obligation of the Master Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Master Servicer pursuant to any requirements of the
Internal Revenue Code as from time to time in force.
Section 4.03. Distribution of Reports to the Trustee
and the Company; Advances by the Master Servicer. Prior to the close of
business on each Determination Date the Master Servicer shall furnish a
statement to the Trustee and the Company (the information in such statement to
be made available to Certificateholders by the Master Servicer on request)
setting forth the amount to be distributed on the next succeeding Distribution
Date per Single Certificate on account of (a) principal and (b) interest. On or
before each Distribution Date, the Master Servicer shall either (i) deposit in
the Certificate Account an amount equal to the Monthly Advance, if any, or (ii)
cause to be made an appropriate entry in the records of the Certificate Account
that funds in such account being held for future distribution or withdrawal
have been, as permitted by this Section 4.03, used by the Master Servicer in
discharge of any such Monthly Advance or (iii) make advances in the form of any
combination of (i) and (ii) aggregating the amount of such Monthly Advance. Any
funds being held for future distribution to Certificateholders and so used
shall be replaced by the Master Servicer by deposit in the Certificate Account
on or before any future Distribution Date to the extent that funds in the
Certificate Account on such Distribution Date shall be less than payments to
Certificateholders required to be made on such date. Any advance made by a
Sub-Servicer as described in Section 3.07 that has been deposited in the
Certificate Account on or before such Distribution Date shall be deemed to be
part of the Monthly Advance made by the Master Servicer pursuant to this
Section 4.03.
Section 4.04. Reports of Foreclosures and
Abandonment of Mortgaged Property. Each year beginning in 198— the Trustee
shall make the reports of foreclosures and abandonments of any Mortgaged
Property required by Section 6050J of the Internal Revenue Code of 1954, as
amended. In order to facilitate this reporting process, the Master Servicer, on
or before January 15th of each year, shall provide to the Trustee reports
relating to each instance occurring during the previous calendar year in which
the Master Servicer (i) on behalf of the Trustee acquires an interest in a
Mortgaged Property through foreclosure or other comparable conversion in full
or partial satisfaction of a Mortgage Loan, or (ii) knows or has reason to know
that a Mortgaged Property has been abandoned. The reports from the Master
Servicer shall be in form and substance sufficient to enable the Trustee to
meet the reporting requirements imposed by Section 6050J.
ARTICLE V.
The Certificates
Section 5.01. The Certificates. The Certificates
shall be substantially in the form set forth in Article I and shall, on
original issue, be executed and delivered by the Company to the Certificate
Registrar for authentication and redelivery to or upon the order of the Company
upon receipt by the Trustee or one or more Custodians of the documents
specified in Section 2.01. The Certificates shall be issued in denominations
representing Fractional Undivided Interests equal to that of a Single
Certificate or integral multiples of it and shall be executed by manual or
facsimile signature on behalf of the Company by its Chairman of the Board, its
President or one of its Vice Presidents or Assistant Vice Presidents under its
seal imprinted on the Certificate and attested by the manual or facsimile
signature of its Secretary or one of its Assistant Secretaries. Certificates
bearing the manual or facsimile signatures of individuals who were at any time
the proper officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificate or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Certificate Registrar by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered under
this agreement. All Certificates shall be dated the date of their
authentication.
Section 5.02. Registration of Transfer and Exchange
of Certificates. The Company shall cause to be kept at one of the offices or
agencies to be appointed by the Company in accordance with the provisions of
Section 6.05 a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Certificates and of transfers and exchanges of Certificates as provided in
this agreement. _________ is initially appointed Certificate Registrar for the
purpose of registering Certificates and transfers and exchanges of Certificates
as provided in this agreement.
Upon surrender for registration of transfer of any
Certificate at any office or agency of the Company maintained for such purpose
pursuant to Section 6.05, the Company shall execute and the Certificate Registrar
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like aggregate Fractional
Undivided Interest.
At the option of the Certificateholders,
Certificates may be exchanged for other Certificates of authorized
denominations of a like aggregate Fractional Undivided Interest, upon surrender
of the Certificates to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange the Company shall execute and the
Certificate Registrar shall authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Company or the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Certificate Registrar duly executed by, the holder of it or h— attorney
duly authorized in writing.
No service charge shall be made for any transfer or
exchange of Certificates, but the Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
All Certificates surrendered for transfer and
exchange shall be destroyed by the Certificate Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates. If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Company and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) there is delivered to the Company and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Company shall execute and the Certificate Registrar shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Fractional Undivided Interest.
Upon the issuance of any new Certificate under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation to it and any other expenses (including
the fees and expenses of the Certificate Registrar) connected with it. Any
duplicate Certificate issued pursuant to this Section shall constitute complete
and indefeasible evidence of ownership in the Trust Fund, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
Section 5.04. Persons Deemed Owners. Prior to due presentation
of a Certificate for registration of transfer, the Company, the Master
Servicer, the Trustee, the Certificate Registrar and any the agent of the
Company, the Master 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
4.01 and for all other purposes whatsoever, and neither the Company, the Master
Servicer, the Trustee, the Certificate Registrar nor any agent of the Company,
the Master Servicer, the Trustee or the Certificate Registrar shall be affected
by notice to the contrary.
ARTICLE VI.
The Company and the Master Servicer
Section 6.01. Respective Liabilities of the Company
and the Master Servicer. The Company and the Master Servicer shall each be
liable in accordance with this agreement only to the extent of the obligations
specifically and respectively imposed upon and undertaken by the Company and
the Master Servicer in this agreement. By way of illustration and not
limitation, the Company is not liable for the servicing and administration of
the Mortgage Loans, nor is it obligated by Section 7.01 to assume any
obligations of the Master Servicer or to appoint a designee to assume such obligations,
nor is it liable for any other obligation under this agreement that it may, but
is not obligated to, assume unless it elects to assume such obligation in
accordance with this agreement.
Section 6.02. Merger or Consolidation of the Company
and the Master Servicer. The Company and, subject to Section 2.03(a)(ii), the
Master Servicer will each keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation,
and will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
Certificates or any of the Mortgage Loans and to perform its respective duties
under this Agreement.
Any Person into which the Company or the Master
Servicer may be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Company or the Master Servicer shall be a
party, or any Person succeeding to the business of the Company or the Master
Servicer, shall be the successor of the Company or the Master Servicer, as the
case may be, under this agreement, without the execution or filing of any paper
or any further act on the part of any of the parties to this agreement,
anything in this agreement to the contrary notwithstanding; provided, however,
that the successor or surviving Person to the Master Servicer shall be
qualified to sell mortgage loans to, and service mortgage loans on behalf of,
FNMA.
Section 6.03. Limitation on Liability of the
Company, the Master Servicer and Others. Neither the Company, the Master
Servicer nor any of the directors, officers, employees or agents of the Company
or the Master Servicer shall be under any liability to the Trust Fund 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 Company, the
Master Servicer or any such person against any breach of warranties or
representations made in this agreement 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 under this agreement. The Company, the Master Servicer and any director,
officer, employee or agent of the Company or the Master Servicer may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising under this agreement.
The Company, the Master Servicer and any director, officer, employee or agent
of the Company or the Master Servicer shall be indemnified by the Trust Fund
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 under this agreement or by reason of
reckless disregard of obligations and duties under this agreement. Neither the
Company nor the Master 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 Company or the Master
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 to this agreement and the interests of the Certificateholders
under this agreement. In such event, the legal expenses and costs of such
action and any liability resulting from it shall be expenses, costs and
liabilities of the Trust Fund and the Company and the Master Servicer shall be
entitled to be reimbursed for them out of the Certificate Account as provided
by Section 3.10.
Section 6.04. Company and Master Servicer Not to
Resign. Neither the Company nor the Master Servicer shall resign from its
respective obligations and duties imposed by this agreement on it except upon
determination that its duties under this agreement are no longer permissible
under applicable law. Any such determination permitting the resignation of the
Company or the Master Servicer shall be evidenced by an Opinion of Counsel to
such effect delivered to the Trustee. No such resignation by the Master
Servicer shall become effective until the Trustee or a successor servicer shall
have assumed the Master Servicer's responsibilities and obligations in
accordance with Section 7.02 of this agreement.
Section 6.05. Appointment of Office or Agency. The
Company will appoint at its expense an office or agency in the city of
_________ where Certificates may be surrendered for registration of transfer or
exchange. The Company initially designates the corporate trust office of
_________ for the purpose of keeping the Certificate Register. The Company will
maintain an office at the address stated in Section 10.05(a) of this agreement
where notices and demands to or upon the Company in respect of the Certificates
and this agreement may be served. The Company will give prompt written notice
to the Trustee of any change in the location of the Certificate Register or any
such office or agency. If at any time the Company shall fail to furnish the
Trustee with the address of such office, such surrenders may be made at the
address of the Company stated in Section 10.05(a) of this agreement.
ARTICLE VII.
Default
Section 7.01. Events of Default. "Event of
Default", wherever used in this agreement, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute to Certificateholders
any payment required to be made under the terms of the Certificates and this
agreement and such failure shall continue unremedied for a period of 5 days
after the date upon which written notice of such failure, requiring such
failure to be remedied, shall have been given to the Master Servicer by the
Trustee or the Company or to the Master Servicer, the Company and the Trustee
by the holders of Certificates evidencing Fractional Undivided Interests
aggregating not less than 25% of the Trust Fund; or
(ii) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Master Servicer in the Certificates or contained in this agreement and such
failure such continue unremedied for a period of 15 days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Trustee or the Company, or to the
Master Servicer, the Company and the Trustee by the holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25% of the
Trust Fund; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or appointing a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer or the Parent and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
(iv) the Master Servicer or the Parent shall consent to the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or the Parent or of relating to all or
substantially all of the property of the Master Servicer or the Parent; or
(v) the Master Servicer or Parent shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations.
If an Event of Default shall occur, then, and in
each and every such case, so long as such Event of Default shall not have been
remedied, either the Company or the holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund,
by notice in writing to the Master Servicer (and to the Trustee and the Company
if given by the Certificateholders) may terminate all of the rights and
obligations of the Master Servicer under this agreement and in and to the
Mortgage Loans and the proceeds of them. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master 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 or, if the
Company so notifies the Trustee and the Master Servicer, to the Company or its
designee pursuant to and under this Section; and, without limitation, the
Trustee, the Company and any such designee of the Company is by this agreement
authorized and empowered to execute and deliver, on behalf of the Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise. The Master Servicer agrees to cooperate with the
Trustee, the Company and any such designee of the Company in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee or the Company or
its designee, as the case may be, for administration by it of all cash amounts
which shall at the time be credited to the Certificate Account or may later be
received with respect to the Mortgage Loans.
Section 7.02. Trustee or Company to Act; Appointment
of Successor. On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, the Trustee or the Company or its
designee, as the case may be, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this agreement and the
transactions set forth or provided for in this agreement and shall be subject
to all the responsibilities, duties and liabilities relating to them placed on
the Master Servicer by the terms and provisions of this agreement (except that
if the Trustee is prohibited by law from obligating itself to make advances
regarding delinquent Mortgage Loans, then the Trustee shall not be obligated to
make Monthly Advances pursuant to Section 4.03). As compensation for this, the
Trustee or the Company or its designee, as the case may be, shall be entitled
to all funds relating to the Mortgage Loans which the Master Servicer would
have been entitled to charge to the Certificate Account if the Master Servicer
had continued to act under this agreement. If the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01, then
notwithstanding the above, the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act (exclusive of the obligations set forth in
Section 4.03), 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 Master Servicer
under this agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
agreement. Pending appointment of a successor to the Master Servicer under this
agreement, the Trustee, unless the Company has notified it pursuant to Section
7.01 that the Company or its designee will become the successor to the Master
Servicer, shall act in such capacity as provided above. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of that permitted the Master Servicer under this agreement. The Company,
the Trustee, any Custodian and such successor shall take such action,
consistent with this agreement, as shall be necessary to effectuate any such
succession.
Section 7.03. Notification to Certificateholders.
(a). Upon any such termination or appointment of a
successor to the Master Servicer, the Trustee shall give prompt written notice
of it to Certificateholders at their respective addresses appearing in the
Certificate Register.
(b). Within 60 days after the occurrence of any
Event of Default, the Trustee shall transmit by mail to all holders of
Certificates notice of each such Event of Default under this agreement known to
the Trustee, unless such Event of Default shall have been cured or waived.
ARTICLE VIII.
Concerning the Trustee
Section 8.01. Duties of Trustee. The Trustee, prior
to the occurrence of an Event of Default and after the curing 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 (which has not been cured), the Trustee shall exercise
such of the rights and powers vested in it by this agreement, and use the same
degree of care and skill in their exercise as a prudent 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.
No provision of this agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing 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 in them, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
agreement;
(ii) The Trustee shall 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 negligent in
ascertaining the pertinent facts; and
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Certificateholders holding Certificates which evidence
Fractional Undivided Interests aggregating not less than 25% of the Trust Fund
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this agreement.
Section 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, certificate of auditors
or any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document 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 under this agreement 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 under this agreement or in relation to this agreement 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 in or by such litigation;
nothing contained in this agreement shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (which has not been
cured), 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 under this agreement
and after the curing 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 of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the Trust Fund;
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
as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Master Servicer or, if paid by the Trustee,
shall be repaid by the Master Servicer upon demand; and
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties under this agreement either directly or by or through agents
or attorneys.
Section 8.03. Trustee Not Liable for Certificates or
Mortgage Loans. The recitals contained in this agreement and in the
Certificates (other than the certificate of authentication on the Certificates)
shall be taken as the statements of the Company or the Master Servicer as the
case may be, 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 of any Mortgage Loan or related document.
The Trustee shall not be accountable for the use or application by the Company
or the Master Servicer of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Company or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Company or the Master Servicer.
Section 8.04. 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.
Section 8.05. Master Servicer to Pay Trustee's Fees
and Expenses. The Master Servicer covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) for all services rendered by
it in the execution of the trusts created by this agreement and in the exercise
and performance of any of the powers and duties under this agreement of the
Trustee, and the Master Servicer will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this agreement
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee under this agreement shall at all times be a corporation having its
principal office in a state and city acceptable to the Company and organized
and doing business under the laws of such state or the United States of
America, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or state authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then for the purposes
of this Section the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.07.
Section 8.07. Resignation and Removal of the
Trustee. The Trustee may at any time resign and be discharged from the trusts
by this agreement created by giving written notice of it to the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
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
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 8.06 and shall fail to
resign after written request for it by the Company, 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 Company 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 trustee.
The holders of Certificates evidencing Fractional
Undivided Interests aggregating more than 50% of the Trust Fund may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
the Company, one complete set to the Trustee so removed and one complete set to
the successor so appointed.
Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 8.08.
Section 8.08. Successor Trustee. Any successor
trustee appointed as provided in Section 8.07 shall execute, acknowledge and
deliver to the Company and to its predecessor trustee an instrument accepting
such appointment under this agreement, and the resignation or removal of the
predecessor trustee shall then become effective and such successor 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 under this agreement, with the like
effect as if originally named as trustee in this agreement. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it under this agreement (other than any
Mortgage Files at the time held by a Custodian, which shall become the agent of
any successor trustee under this agreement), and the Company, the Master
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations.
No successor trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 8.06.
Upon acceptance of appointment by a successor
trustee as provided in this Section, the Company shall mail notice of the
succession of such trustee under this agreement to all holders of Certificates
at their addresses as shown in the Certificate Register. If the Company fails
to mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Company.
Section 8.09. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the
Trustee under this agreement, provided such corporation shall be eligible under
the provisions of Section 8.06, without the execution or filing of any paper or
any further act on the part of any of the parties to this agreement, anything
in this agreement to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate
Trustee. Notwithstanding any other provisions of this agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing the same may at the time be
located, the Company 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 to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part of it, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Company and the Trustee may consider necessary or desirable. If the Company
shall not have joined in such appointment within 15 days after the receipt by
it of a request so to do, or in case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this agreement shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 under this agreement and no notice to holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under Section
8.08 of this agreement.
In the case of any appointment of a co-trustee or
separate trustee pursuant to this Section 8.10 all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly, except to the extent that under any law of any jurisdiction
in which any particular act or acts are to be performed (whether as Trustee
under this agreement or as successor to the Master Servicer under this
agreement), the Trustee shall be incompetent or unqualified to perform such act
or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Fund or any portion thereof in any jurisdiction)
shall be exercised and performed by such separate trustee or co-trustee at the
direction of the Trustee.
Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
agreement and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided in the instrument,
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.
The right of the Company to repurchase all Mortgage
Loans pursuant to (i) above shall be conditioned upon the Principal Balances of
such Mortgage Loans at the time of any such repurchase aggregating less than
10% of the aggregate Principal Balance of the Mortgage Loans at the Cut-off
Date. If such right is exercised, the Company shall provide to the Trustee the
certification required by Section 3.15 and the Trustee and any Custodians shall
promptly release to the Company the Mortgage Files pertaining to the Mortgage
Loans being repurchased.
Notice of any termination, specifying the
Distribution Date upon which the Certificateholders may surrender their
Certificates to the Company for payment of the final distribution and
cancellation, shall be given promptly by the Company by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the month of such final distribution
specifying (A) the Distribution Date upon which final payment of the
Certificates will be made upon presentation and surrender of Certificates at
the office of the Company designated in it, (B) the amount of any such final
payment and (C) 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 of the Company specified in it. The
Company shall give such notice to the Certificate Registrar at the time such
notice is given to Certificateholders. In the event such notice is given, the
Company shall deposit in the Certificate Account on the applicable Distribution
Date an amount equal to the repurchase price for the Mortgage Loans and all
property acquired in respect of any Mortgage Loan remaining in the Trust Fund.
Upon presentation and surrender of the Certificates, the Company shall cause to
be distributed to Certificateholders an amount equal to (i) the amount
otherwise distributable on such Distribution Date but for such repurchase and
(ii) the repurchase price for the Mortgage Loans and all property acquired in
respect of any Mortgage Loan remaining in the Trust Fund calculated as above
provided. Upon certification to the Trustee by a Servicing Officer, following
such final deposit, the Trustee and any Custodians shall promptly release to
the Company the Mortgage Files for the repurchased Mortgage Loans.
In the event that all of the Certificateholders
shall not surrender their Certificates for cancellation within six months after
the time specified in the above-mentioned written notice, the Company shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect to them. If within one year after the second notice all the
Certificates shall not have been surrendered for cancellation, the Company 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 of them shall be paid out of the funds and other
assets which remain subject to this agreement.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties rights, remedies and trusts shall vest
in and be exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.11. Appointment of Custodians. The Trustee
may, with the consent of the Company, 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. Subject to Article VIII, the Trustee agrees to
comply with the terms of each Custodial Agreement and to enforce the terms and
provisions of it 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. Each Custodial Agreement may be amended only
as provided in Section 10.01.
ARTICLE IX.
Termination
Section 9.01. Termination Upon Repurchase by the
Company or Liquidation of All Mortgage Loans. The respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created by
this agreement (other than the obligation of the Company to make payments to
Certificateholders as set forth below) shall terminate upon (i) the repurchase
by the Company of all Mortgage Loans and all property acquired in respect of
any Mortgage Loan remaining in the Trust Fund at a price equal to the greater
of (a) 100% of the Principal Balance of each Mortgage Loan as of the day of
repurchase plus accrued interest on it at the Pass-Through Rate to the first
day of the month following repurchase plus the appraised value of any such
property, such appraisal to be conducted by an appraiser mutually agreed upon
by the Company and the Trustee, and (b) the then fair market value of the Certificates
(as defined below), or (ii) the later of the final payment or other liquidation
(or any advance with respect to it) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure or deed
in lieu of foreclosure of any Mortgage Loan; provided, however, that in no
event shall the trust created by this agreement continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date of this agreement.
For purposes of this Section 9.01, the fair market
value of the Certificates shall be deemed to be (1) the most recent bid price
for the Certificates in the over-the-counter securities market if the
Certificates are traded in such market, or (2) if the Certificates are traded
on a securities exchange, the average closing sale price for the Certificates
on such securities exchange for the last five trading days of such exchange
immediately preceding such repurchase, or (3) if the Certificates are not so
traded, a value determined on the basis of current prices of securities deemed
by the Company to be most comparable to the Certificates, in each case together
with accrued interest at the Pass-Through Rate on the aggregate Principal
Balance of the Mortgage Loans to the first day of the month following
repurchase.
ARTICLE X.
Miscellaneous Provisions
Section 10.01. Amendment. This agreement or any
Custodial Agreement may be amended from time to time by the Company, the Master
Servicer and the Trustee, without the consent of any of the Certificateholders,
to cure any ambiguity, to correct or supplement any provisions in them, which
may be inconsistent with any other provisions in them, or to make any other
provisions with respect to matters or questions arising under this agreement or
such Custodial Agreement which shall not be 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.
This Agreement or any Custodial Agreement may also
be amended from time to time by the Company, the Master Servicer and the
Trustee with the consent of the holders of Certificates evidencing Fractional
Undivided Interests aggregating not less than 66% of the Trust Fund for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this agreement or such Custodial Agreement or of
modifying in any manner the rights of the holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, payments received on Mortgage Loans which are required
to be distributed on any Certificate without the consent of the holder of such
Certificate or (ii) reduce the percentage of Certificates the holders of which
are required to consent to any such amendment, without the consent of the
holders of all Certificates then outstanding.
Promptly after the execution of any such amendment
the Trustee shall furnish written notification of the substance of such
amendment to each Certificateholder.
It shall not be necessary for the consent of
Certificateholders under this Section 10.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance of it. The manner of obtaining such consents and of
evidencing the authorization of the execution of them by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe.
Section 10.02. Recordation of Agreement. To the
extent permitted by applicable law, this agreement is subject to recordation in
all appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the properties subject to
the Mortgages are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected by the Master Servicer and
at its expense on direction by the Trustee, but only upon direction accompanied
by an Opinion of Counsel to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of
this agreement as provided in this agreement 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 10.03. Limitation on Rights of
Certificateholders. The death or incapacity of any Certificateholder shall not
operate to terminate this agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties to this agreement or any of them.
No Certificateholder shall have any right to vote
(except as provided in Section 10.01) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
to this agreement nor shall anything here set forth in this agreement, 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 of it.
No Certificateholder shall have any right by virtue
of any provision of this agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this agreement, unless
such holder previously shall have given to the Trustee a written notice of
default and of the continuance of it, as provided above, and unless also the
holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 25% of the Trust Fund shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
under this agreement and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred in or by it, 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 of any
provision of this Agreement to affect, disturb or prejudice the rights of the
holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this agreement, except in the manner provided it and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
Section 10.04. Governing Law. This agreement and the
Certificates shall be construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties under this
agreement shall be determined in accordance with such laws.
Section 10.05. Notices. All demands and notices
under this agreement shall be in writing and shall be deemed to have been duly
given if personally delivered at or mailed by registered mail, postage prepaid,
to (a) in the case of the Company, _________, Attention: President, or such
other address as may hereafter be furnished to the Master Servicer and the
Trustee in writing by the Company, (b) in the case of the Master Servicer,
_________, or such other address as may be hereafter furnished to the Company
and the Trustee by the Master Servicer in writing, (c) in the case of the
Trustee, _________, or such other address as may hereafter be furnished to the
Company and the Master Servicer in writing by the Trustee. Any notice required
or permitted to be mailed to a Certificateholder shall be given by registered
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 10.06. Severability of Provisions. If any
one or more of the covenants, agreements, provisions or terms of this agreement
shall be for any reason whatever 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 of them.
In Witness of which, the
Company, the Master Servicer and the Trustee have caused their names to be
signed to this agreement by their respective officers duly authorized to do so
and their respective seals, duly attested, to be affixed to this agreement, all
as of the day and year first above written.
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Mortgage Securities Inc.
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[Seal]
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By: _________, Vice
President
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Attest: _________, Assistant Secretary
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[Seal]
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[Master Servicer]
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Attest: _________, Assistant Secretary
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By: _________, Vice
President
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[Seal]
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[Trustee]
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Attest: _________, Assistant Secretary
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By: _________, Vice
President
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