SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
March 1, 2000
STRUCTURED ASSET SECURITIES CORPORATION (as Depositor under the Pooling and
Servicing Agreement, dated as of March 1, 2000, providing for the issuance of
Washington Mutual Mortgage Loan Trust Mortgage Pass-Through Certificates,
Series 2000-1)
Structured Asset Securities Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware 333-31252 74-2440850
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(State or Other Jurisdiction (Commission (I.R.S. Employer
Of Incorporation) File Number) Identification No.)
200 Vesey Street
New York, New York 10285
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(Address of Principal Executive (Zip Code)
Offices)
Registrant's telephone number, including area code: (212) 526-5594
No Change
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 5. Other Events
The Registrant registered issuances of Washington Mutual Mortgage Loan
Trust Mortgage Pass-Through Certificates, Series 2000-1 on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Act"), by a Registration Statement on Form S-3 (Registration
File No. 333-31252) (the "Registration Statement"). Pursuant to the
Registration Statement, the Registrant issued $5,017,776,000 in aggregate
principal amount of Class A1, Class A2, Class M1, Class M2, Class M3, Class
B1, Class B2, Class B3 and Class R Certificates of its Washington Mutual
Mortgage Loan Trust Mortgage Pass-Through Certificates, Series 2000-1 on March
31, 2000. This Current Report on Form 8-K is being filed to satisfy an
undertaking, contained in the definitive Prospectus dated April 10, 2000, as
supplemented by the Prospectus Supplement dated April 10, 2000 (the
"Prospectus Supplement"), to file a copy of the Pooling and Servicing
Agreement (as defined below) executed in connection with the issuance of the
Certificates, a form of which was filed as an exhibit to the Registration
Statement.
The Certificates were issued pursuant to a Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), attached hereto as Exhibit
99.2, dated as of March 1, 2000, among Structured Asset Securities
Corporation, as depositor (the "Depositor"), Washington Mutual Bank, FA, as
seller and servicer, and Bankers Trust Company of California, N.A., as trustee
(the "Trustee"). The "Certificates" consist of the following classes: Class
A1, Class A2, Class M1, Class M2, Class M3, Class B1, Class B2, Class B3 and
Class R. The Certificates evidence all the beneficial ownership interest in a
trust fund (the "Trust Fund") that consists primarily of a pool of
conventional, COFI-indexed adjustable rate, first lien residential mortgage
loans (the "Mortgage Loans") with an aggregate outstanding principal balance
of approximately $6,701,536,869 as of March 1, 2000. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in
the Pooling and Servicing Agreement.
<PAGE>
Item 7. Financial Statements; Pro Forma Financial Information and
Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
1.1 Terms Agreement, dated March 21, 2000, between Structured Asset
Securities Corporation, as Depositor, and Lehman Brothers Inc.,
as the Underwriter.
99.1 Mortgage Loan Purchase Agreement, dated as of March 1, 2000,
among Washington Mutual, FA, as Seller, Structured Asset
Securities Corporation, as Purchaser, and Lehman Brothers Inc.
99.2 Pooling and Servicing Agreement, dated as of March 1, 2000,
among Washington Mutual Bank, FA, as Seller and Servicer,
Structured Asset Securities Corporation, as depositor, and
Bankers Trust Company of California, N.A., as Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STRUCTURED ASSET SECURITIES
CORPORATION
By: /s/ Ellen Kiernan
------------------------
Name: Ellen Kiernan
Title: Vice President
Dated: April 12, 2000
<PAGE>
5
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
1.1 Terms Agreement, dated March 21, 2000, between Structured Asset
Securities Corporation, as Depositor, and Lehman Brothers Inc., as the
Underwriter.
99.1 Mortgage Loan Purchase Agreement, dated as of March 1, 2000, among
Washington Mutual, FA, as Seller, Structured Asset Securities
Corporation, as Purchaser, and Lehman Brothers Inc.
99.2 Pooling and Servicing Agreement, dated as of March 1, 2000, among
Washington Mutual Bank, FA, as Seller and Servicer, Structured Asset
Securities Corporation, as depositor, and Bankers Trust Company of
California, N.A., as Trustee.
Execution
WASHINGTON MUTUAL MORTGAGE LOAN TRUST
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-1
TERMS AGREEMENT
Dated: March 24, 2000
To: Structured Asset Securities Corporation, as Depositor under the Pooling
and Servicing Agreement dated as of March 1, 2000 (the "Pooling and
Servicing Agreement").
Re: Underwriting Agreement Standard Terms dated as of April 16, 1996 (the
"Standard Terms," and together with this Terms Agreement, the
"Agreement").
Series Designation: Washington Mutual Mortgage Loan Trust Mortgage
Pass-Through Certificates, Series 2000-1.
Cut-off Date: March 1, 2000.
Closing Date: 10:00 A.M., New York time, on or about March 31, 2000.
Settlement Date: 10:00 A.M., New York time, on or about April 12, 2000.
Terms of the Series 2000-1 Certificates: Washington Mutual Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2000-1, Class A1, Class A2, Class
M1, Class M2, Class M3, Class B1, Class B2, Class B3 and Class R (the
"Certificates") will evidence, in the aggregate, the entire beneficial
ownership interest in a trust fund (the "Trust Fund"). The primary assets of
the Trust Fund consist of 17,816 conventional, adjustable rate, first lien
residential mortgage loans (the "Mortgage Loans") having a Scheduled Principal
Balance as of the Cut-off Date of $6,701,536,869.34. Only the Class A1, Class
M1, Class M2 and Class M3 Certificates (the "Offered Certificates") are being
sold pursuant to the terms hereof.
Form of Certificates: Through the book-entry facilities of The Depository
Trust Company, Clearstream Banking, societe anonyme (formerly Cedelbank) and
the Euroclear System..
Registration Statement: File Number 333-31252.
Certificate Ratings: It is a condition to the issuance of the Class A1
Certificates that they be rated "Aaa" by Moody's Investors Service, Inc.
("Moody's") and "AAA" by each of Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc. ("S&P") and Fitch IBCA, Inc. ("Fitch," and
together with Moody's and S&P, the "Rating Agencies"). It is a condition to
the issuance of the Class M1 Certificates that they be rated "Aa2" by Moody's
and "AA" by each of S&P and Fitch. It is a condition to the issuance of the
Class M2 Certificates that they be rated "A2" by Moody's and "A" by each of
S&P and Fitch. It is a condition to the issuance of the Class M3 Certificates
that they be rated "Baa2" by Moody's and "BBB" by each of S&P and Fitch.
Terms of Sale of Offered Certificates: The Depositor agrees to sell to Lehman
Brothers Inc. (the "Underwriter") and the Underwriter agrees to purchase from
the Depositor, the Offered Certificates in the principal amounts and prices
set forth on Schedule 1 annexed hereto. The purchase price for the Offered
Certificates shall be the Purchase Price Percentage set forth in Schedule 1
plus accrued interest at the initial interest rate per annum from and
including the Cut-off Date up to, but not including, the Settlement Date.
The Underwriter will offer the Offered Certificates to the public from time to
time in negotiated transactions or otherwise at varying prices to be
determined at the time of sale.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
the Depositor and the Underwriter in accordance with its terms.
LEHMAN BROTHERS INC.
By:
------------------------------
Name:
Title:
Accepted:
STRUCTURED ASSET SECURITIES
CORPORATION
By:
-----------------------
Name:
Title:
Schedule 1
Initial Certificate
Principal Amount Purchase
(or Initial Component Certificate Price
Class Principal Amount) Interest Rate Percentage
Class A1 $4,799,976,000 (1) 100%
Class M1 100,523,000 (1) 100%
Class M2 83,769,000 (1) 100%
Class M3 33,508,000 (1) 100%
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(1) Interest will accrue on the Class A1, M1, M2 and M3 Certificates based
upon one-month LIBOR plus a specified margin, subject to limitation, as
described in the Prospectus Supplement.
EXECUTION
=============================================================================
WASHINGTON MUTUAL BANK, FA,
as SELLER
and
STRUCTURED ASSET SECURITIES CORPORATION,
as PURCHASER
and
LEHMAN BROTHERS INC.
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March 1, 2000
WASHINGTON MUTUAL MORTGAGE LOAN TRUST
MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2000-1
=============================================================================
TABLE OF CONTENTS
MORTGAGE LOAN PURCHASE AGREEMENT
<TABLE>
<CAPTION>
<S> <C>
RECITALS...........................................................................1
AGREEMENT....................................................................... 2
1. PURCHASE AND SALE OF MORTGAGE LOANS AND CERTIFICATES................... 2
2. REPRESENTATIONS AND WARRANTIES......................................... 4
3. SURVIVAL OF REPRESENTATIONS............................................ 7
4. COVENANTS.............................................................. 7
5. SUCCESSORS AND ASSIGNS, ADDITIONAL INFORMATION........................ 8
6. INDEMNIFICATION....................................................... 8
7. NOTICES............................................................... 11
8. REPRESENTATIONS AND INDEMNITIES TO SURVIVE............................ 11
9. MISCELLANEOUS......................................................... 11
10. SEVERABILITY OF PROVISIONS............................................ 11
SCHEDULE I - MORTGAGE LOAN SCHEDULE............................................ SC-1
</TABLE>
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (the "Agreement"), dated as of
March 1, 2000, is executed on the Closing Date (as defined below) by and among
Structured Assets Securities Corporation, a Delaware corporation (such entity,
and its successors and assigns, being referred to herein as the "Purchaser"),
Washington Mutual Bank, FA, a federally chartered savings association
("Seller"), as seller, and Lehman Brothers Inc. ("Lehman") in its capacity as
underwriter of the Registered Certificates or placement agent of the
Privately-Offered Certificates (each as defined below).
The Purchaser, the Seller and Lehman hereby recite and agree as
follows:
RECITALS
1. Schedule I attached hereto and made a part hereof (the "Mortgage
Loan Schedule") lists certain conventional, adjustable rate, first lien
residential mortgage loans (collectively, the "Mortgage Loans") owned by
the Seller that the Seller desires to sell, without recourse, to the
Purchaser, exclusive of the Seller's Retained Interest and the Seller's
servicing rights with respect thereto.
2. The Purchaser desires to purchase such Mortgage Loans and intends
immediately thereafter to transfer all of its rights, title and interest
in and to the Mortgage Loans to the Washington Mutual Mortgage Loan Trust
(the "Trust") pursuant to the terms of a Pooling and Servicing Agreement,
dated as of March 1, 2000 (the "Pooling and Servicing Agreement"), by and
among the Purchaser, the Seller, as seller and servicer, and Bankers
Trust Company of California, N.A., as trustee of the Trust (the
"Trustee").
3. In exchange for the Mortgage Loans, the Trust shall issue to the
Purchaser Mortgage-Backed Pass-Through Certificates, Series 2000-1, Class
A1, Class M1, Class M2 and Class M3 (collectively, the "Registered
Certificates") and the Class A2, Class B1, Class B2, Class B3 and Class R
Certificates (the "Privately-Offered Certificates" and together with the
Registered Certificates, the "Certificates") pursuant to the terms of the
Pooling and Servicing Agreement.
4. Lehman and the Seller have entered into a pricing letter dated as
of March 24, 2000 (the "Pricing Letter") pursuant to which Lehman has
agreed to purchase from the Seller and the Seller has agreed to sell to
Lehman all of the Certificates, other than the Class A2 Certificates, the
Class B3 Certificates and the Class R Certificate (the "Offered
Certificates"), on the terms and conditions set forth therein.
5. The Registered Certificates will be offered and sold by Lehman as
sole underwriter pursuant to the terms and conditions of an Underwriting
Agreement (Standard Terms) between the Purchaser and Lehman, dated April
16, 1996 (the "Underwriting Agreement (Standard Terms)"), as supplemented
by a terms agreement, dated March 24, 2000 (the "Terms Agreement," and
together with the Underwriting Agreement (Standard Terms), the
"Underwriting Agreement") through the use of a prospectus supplement to
be dated as of the date of its printing but not later than the Settlement
Date (the "Prospectus Supplement") and a related prospectus dated of even
date, the ("Base Prospectus" and together with the Prospectus Supplement,
the "Prospectus"). The Privately-Offered Certificates will be offered by
Lehman as sole Placement Agent pursuant to a Purchase Agreement, dated as
of March 24, 2000 (the "Purchase Agreement"), between the Purchaser and
Lehman through the use of a confidential private placement memorandum
dated as of the date of its first use but not later than the Settlement
Date, which private placement memorandum will incorporate the Base
Prospectus (the "Private Placement Memorandum").
6. Capitalized terms used herein and not defined herein shall have
the meanings assigned to them in the Pooling and Servicing Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises herein made
and other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Purchase and Sale of Mortgage Loans and Certificates.
(a) Concurrently with the execution and delivery hereof on March 31,
2000 (the "Closing Date"), the Seller hereby sells, assigns, transfers and
otherwise conveys to the Purchaser, without recourse, all of its right, title
and interest in and to the Mortgage Loans, including all interest and
principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date (other than any such payments that were due on or prior to such
date) and all payments due after such date but received prior to such date and
intended by the related Mortgagors to be applied after such date, together
with all of the Seller's right, title and interest in and to any related
escrow account and all amounts from time to time credited to and the proceeds
of such account, any REO Property and the proceeds thereof, the Seller's
rights under any insurance policies related to the Mortgage Loans and the
Seller's security interest in any collateral pledged to secure the Mortgage
Loans, including the Mortgaged Properties. In consideration of such assignment
and the covenants of the Seller set forth in Section 4 below, the Seller shall
receive from the Purchaser on the Closing Date the Certificates in full
consideration for the transfer of the Mortgage Loans to the Purchaser.
(b) Lehman hereby agrees to purchase, or to cause the Purchaser to
purchase, from the Seller and the Seller hereby agrees to sell to the
Purchaser or Lehman all of the Offered Certificates at the prices agreed to by
Lehman and the Seller in accordance with the terms of the Pricing Letter, but
in no event at prices less than the "Take-Down" prices set forth in the
Pricing Letter. The purchase and sale of all of the Offered Certificates shall
settle on the Settlement Date and, if less than all the Offered Certificates
are purchased and sold on the Settlement Date, on a subsequent date in no
event later than the "Take-Down Date" specified in the Pricing Letter. On the
Settlement Date and any such subsequent date, the Seller shall deliver to
Lehman all of the Offered Certificates to be purchased and sold on such date,
together with the certificate referred to in Section 2(b), against receipt of
payment of the purchase price therefor as set forth in the Pricing Letter. On
the Settlement Date, the Seller shall pay and/or reimburse to the Purchaser
the costs and expenses incurred in connection with the issuance of the
Certificates, including but not limited to the fees and expenses relating to
rating agencies, accountants, underwriting fees, law firms, the printing and
distribution of the Prospectus and the Private Placement Memorandum, the
Trustee, the due diligence review of the Mortgage Loans and that portion of
the registration fee paid by the Purchaser to the Securities and Exchange
Commission (the "Commission") allocable to the registration of the Registered
Certificates.
(c) In connection with such transfer and assignment of the Mortgage
Loans hereunder, the Seller does hereby deliver, or cause to be delivered, to
the Purchaser (or its designee) each Trustee Mortgage File relating to the
Mortgage Loans. In the case of Mortgage Loans (if any) that have been prepaid
in full after the Cut-off Date and prior to the execution of this Agreement,
the Seller, in lieu of delivering the related Trustee Mortgage Files, shall
herewith deliver to the Purchaser an Officer's Certificate which shall include
a statement to the effect that all amounts received in connection with such
prepayment that are required to be deposited in the Custodial Account have
been so deposited. The Seller hereby convenants not take any action
inconsistent with the ownership interest of the Purchaser or the holders of
the Certificates in the Trustee Mortgage Files.
(d) The Purchaser and the Seller intend that the conveyance by the
Seller to the Purchaser of all its right, title and interest in and to the
Mortgage Loans on the Closing Date pursuant to this Agreement shall be, and be
construed as, a sale of the Mortgage Loans, without recourse, by the Seller to
the Purchaser. It is, further, not intended that such conveyance be deemed to
be a pledge of the Mortgage Loans by the Seller to the Purchaser to secure a
debt or other obligation of the Seller. However, in the event that the
Mortgage Loans are held to be property of the Seller, or if this Agreement is
held or deemed to create a security interest in the Mortgage Loans, then it is
intended that (i) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (ii) the conveyances provided for in this Section 1 shall be
deemed to be a grant by the Seller to the Purchaser, to secure payment in full
of the Secured Obligations (as defined below), of a security interest in all
of the Seller's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Trustee Mortgage Files, and
all accounts, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit and investment property consisting of the Trust Fund,
arising from or relating to (A) the Mortgage Loans, including with respect to
each Mortgage Loan, the Mortgage Note and related Mortgage, and all other
documents in the related Trustee Mortgage Files, and including any Replacement
Mortgage Loans; (B) pool insurance policies, hazard insurance policies and any
bankruptcy bond relating to the foregoing, if applicable; (C) all amounts
payable on or after the Cut-off Date to the holders of the Mortgage Loans in
accordance with the terms thereof; (D) all income, payments, proceeds and
products of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property; and (E) all cash and non-cash
proceeds of any of the foregoing; (iii) the possession or control by the
Trustee or any agent of the Trustee of Mortgage Notes or such other items of
property as constitute instruments, money, documents, advices of credit,
letters of credit, goods, certificated securities or chattel paper shall be
deemed to be possession or control by the secured party, or possession or
control by the Purchaser, for purposes of perfecting the security interest
pursuant to the Uniform Commercial Code (including, without limitation,
Sections 9-305 or 9-115 thereof); and (iv) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgements,
receipts or confirmations from, securities intermediaries, bailees or agents
of, or persons holding for, the Trustee, as applicable, for the purpose of
perfecting such security interest under applicable law. "Secured Obligations"
means the rights of the Purchaser under this Agreement and the amount owing
the holders of the Certificates. The Seller shall, to the extent consistent
with this Agreement, take such reasonable actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in
the Mortgage Loans and the other property described above, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and would be maintained as such throughout the term of
this Agreement. Without limiting the generality of the foregoing, the Seller
shall prepare and deliver to the Purchaser at least six months prior to any
filing date, and the Purchaser shall file, or shall cause to be filed, at the
expense of the Seller, all filings necessary to maintain the effectiveness of
any original filings necessary under the Uniform Commercial Code as in effect
in any jurisdiction to perfect the Purchaser's security interest in or lien on
the Mortgage Loans.
Notwithstanding the foregoing provisions of this Section 1, (i) the
Seller shall retain (A) the Seller's Retained Interest and (B) all servicing
rights (including, without limitation, primary servicing and master servicing)
relating to or arising out of the Mortgage Loans, and all rights to receive
servicing fees, servicing income and other payments made as compensation for
such servicing granted to it under the Pooling and Servicing Agreement
pursuant to the terms and conditions set forth therein (collectively, the
"Servicing Rights") and (ii) the Seller's Retained Interest and the Servicing
Rights are not included in the collateral in which the Seller grants a
security interest in favor of the Purchaser pursuant to the immediately
preceding paragraph.
2. Representations and Warranties
(a) The Seller hereby represents and warrants to the Purchaser, as of
the date of this Agreement, that:
(i) the Seller has been duly organized and is validly existing
and in good standing as a federally chartered savings association
under the laws of the United States of America, with full power and
authority to enter into and perform its obligations under this
Agreement, and is in compliance with the laws of each jurisdiction
in which a Mortgaged Property is located to the extent necessary to
ensure the enforceability of each Mortgage Loan;
(ii) this Agreement has been duly authorized, executed and
delivered by the Seller and constitutes a legal, valid and binding
agreement of the Seller, enforceable against it in accordance with
its terms, subject to (A) bankruptcy, insolvency, receivership,
conservatorship, reorganization, moratorium or other similar laws
affecting creditors' rights generally or the rights of creditors of
federally chartered savings associations, (B) general principles of
equity regardless of whether enforcement is sought in a proceeding
in equity or at law, and (C) public policy considerations limiting
the enforceability of provisions of this Agreement which purport to
provide indemnification from liabilities under applicable securities
laws;
(iii) neither the execution and delivery by the Seller of this
Agreement, nor the performance by the Seller of the provisions
hereof, will (A) conflict with or result in a breach of, or
constitute a default under, any of the provisions of the charter or
bylaws of the Seller or any law, governmental rule or regulation or
any judgment, decree or order binding on the Seller or any of its
properties, or any of the provisions of any indenture, mortgage,
deed of trust, contract or other instrument to which the Seller is a
party or by which it is bound, or (B) result in the creation of any
lien, charge, or encumbrance upon any of its properties pursuant to
the terms of any such indenture, mortgage, deed of trust, contract
or other instrument, which, in the case of either (A) or (B), would
have a material adverse effect on its ability to perform its
obligations hereunder or on the financial condition of the Seller;
(iv) there are no actions, suits or proceedings against the
Seller pending or, to the knowledge of the Seller, threatened, or,
to the knowledge of the Seller, investigations pending, before any
court, administrative agency or other tribunal (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement or (C) which might materially and adversely affect the
performance by the Seller of its obligations under, or the validity
or enforceability of, this Agreement;
(v) the Seller is the owner of each Mortgage Loan;
(vi) the Seller has acquired its ownership of each Mortgage
Loan in good faith without notice of any adverse claim;
(vii) the Seller has not assigned any interest or participation
in any Mortgage Loan, or, if the Seller has assigned an interest or
participation in any Mortgage Loan, such interest or participation
has been fully released;
(viii) the Seller has full right to sell the Mortgage Loans to
the Purchaser;
(ix) there has not been any material adverse change in the
business, operations, financial condition, properties or assets of
the Seller since December 31, 1999;
(x) the Seller is not in violation of its charter or bylaws or
in default under any agreement, indenture or instrument the effect
of which default would have a material adverse effect on the ability
of the Seller to perform its obligations under this Agreement or on
the financial condition of the Seller;
(xi) the Seller is not a party to, bound by or in breach or
violation of any indenture or other agreement or order or regulation
of any court, regulatory body, administrative agency or governmental
body having jurisdiction over it that materially and adversely
affects the (A) ability of the Seller to perform its obligations
under this Agreement or (B) the business, operations, financial
condition, properties or assets of the Seller;
(xii) the Seller is not as of the date hereof subject to any
provisions of any supervisory agreement or memorandum of
understanding with the Office of Thrift Supervision of the U.S.
Department of Treasury; and
(xiii) no consent, approval, authorization or order of any
federal or state court or governmental agency or body is required
for the consummation by the Seller of the transactions contemplated
by the terms of this Agreement.
(b) On the Settlement Date, the Seller shall deliver to Lehman and
the Purchaser a certificate of an authorized officer of the Seller to the
effect that, as of the Settlement Date:
(i) the information set forth in the Prospectus Supplement
(excluding the information set forth under the captions "Description
of the Certificates," "Yield, Prepayment and Weighted Average Life,"
"Underwriting," and "Annex I, Global Clearance, Settlement and Tax
Documentation Procedures," such excluded information, the
"Underwriter Information") does not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein, in light of the circumstances
under which they were made, not misleading;
(ii) the information set forth in the Private Placement
Memorandum (excluding the Base Prospectus and the Underwriter
Information incorporated in the Private Placement Memorandum, the
information set forth under the captions "Notice to Investors",
"Description of the Privately-Offered Certificates", "Yield on the
Privately-Offered Certificates and Prepayments" and "Plan of
Offering" and the information in Schedule I to Private Placement
Memorandum, such excluded information, the "Initial Purchaser
Information") does not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under
which they were made, not misleading.
(c) The Seller hereby represents and warrants to the Purchaser that,
with respect to the Mortgage Loans, or each Mortgage Loan, as the case may be,
as of the date of this Agreement, each of the representations and warranties
set forth in Section 2.04 of the Pooling and Servicing Agreement is true and
correct.
(d) The Purchaser hereby represents and warrants to the Seller that
as of the date of this Agreement:
(i) a registration statement on Form S-3 (File No. 333-31252),
including the Base Prospectus (the "Registration Statement"), has
been filed with the Commission and has become effective under the
Securities Act of 1933, as amended (the "Securities Act"), and no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been initiated, or to the Purchaser's knowledge, threatened, by the
Commission;
(ii) it is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has
full corporate power and authority to enter into and perform its
obligations under this Agreement and the Pooling and Servicing
Agreement; and
(iii) this Agreement and the Pooling and Servicing Agreement
have been duly authorized, executed and delivered by the Purchaser
and constitute the legal, valid and binding agreements of the
Purchaser enforceable against the Purchaser in accordance with their
respective terms, subject to (A) bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium or other
similar laws affecting creditors' rights generally, (B) general
principles of equity regardless of whether enforcement is sought in
a proceeding in equity or at law, and (C) public policy
considerations limiting the enforceability of provisions of this
Agreement and the Pooling and Servicing Agreement which purport to
provide indemnification from penalties under applicable securities
laws.
3. Survival of Representations. Each of the representations and
warranties of the Seller and the Purchaser contained herein shall survive the
purchase and sale of the Mortgage Loans pursuant hereto and shall continue in
full force and effect, notwithstanding any restrictive or qualified
endorsement on the Mortgage Notes and notwithstanding subsequent termination
of this Agreement. The representations and warranties shall not be impaired by
any review and examination of documents to be delivered or held by the Seller
in respect of each Mortgage Loan or other documents evidencing or relating to
the Mortgage Loans or any failure on the part of the Purchaser or any
successor or assignee thereof to review or examine such documents.
4. Covenants.
(a) The Seller hereby covenants to the Purchaser and Lehman that at
any time when a prospectus relating to the Certificates is required to be
delivered pursuant to the Securities Act or a Private Placement Memorandum is
required to be delivered in connection with the placement of Privately-Offered
Certificates, the Seller has knowledge that there has been a material change
affecting the disclosures in the Prospectus Supplement or the Private
Placement Memorandum or that the disclosures therein contain any untrue fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, the
Seller promptly will notify the Purchaser of such change, untrue fact or
omission and update the Prospectus Supplement and/or the Private Placement
Memorandum at its expense subject to the prior written consent of the
Purchaser. The Seller also agrees that, if required by applicable law, it will
update the Prospectus Supplement and/or the Private Placement Memorandum at
its expense, subject to the prior written consent of the Purchaser.
(b) Each of Lehman and the Purchaser hereby covenants to the Seller
that, in the event the Seller desires to sell any of the Class A2
Certificates, the Class B3 Certificate or the Class R Certificates, it will
reasonably cooperate with the Seller to provide the Seller such information as
may be required or appropriate for any offering memorandum or, in the case of
the Class A2 Certificates, any registration statement and prospectus.
5. Successors and Assigns, Additional Information.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. No party
hereto may assign either this Agreement or any of its rights, interests or
obligations hereunder without the prior written approval of the other parties
hereto; provided, however, that the Purchaser may assign its rights and
obligations hereunder to the Trustee without the consent of the other parties
hereto.
(b) The Seller hereby agrees to furnish any and all information,
documents, certificates, letters or opinions with respect to the Mortgage
Loans reasonably requested by the Purchaser or Lehman in order to perform any
of its obligations or satisfy any of the conditions on its part to be
performed or satisfied pursuant to the Pooling and Servicing Agreement, the
Underwriting Agreement or the Purchase Agreement.
6. Indemnification.
(a) In addition to any repurchase and cure obligations of the Seller
under the Pooling and Servicing Agreement, and any and all other remedies
available to the Purchaser or Lehman under this Agreement, the Seller shall
indemnify and hold harmless the Purchaser and Lehman against any and all
losses, damages, penalties, fines, claims, forfeitures, lawsuits, court costs,
reasonable attorney's fees, judgments, and any other costs, fees, and
expenses, arising from claims made or actions brought by any person other than
the Purchaser or Lehman based on or arising from any act or failure to act or
any breach of any warranty, obligation, representation, or covenant contained
in or made by the Seller pursuant to this Agreement by any agent, employee,
representative or officer of the Seller or any of its affiliates. It is
understood and agreed that any permitted assignee of the Purchaser (including
the Trustee) shall be a third party beneficiary of this Agreement. The
indemnification obligations of the Seller hereunder shall survive the
termination of this Agreement.
(b) The Purchaser agrees to indemnify and hold harmless the Seller
and each person who controls the Seller within the meaning of either the
Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act") against any and all losses, claims, damages or liabilities,
joint or several, to which they may become subject under the Securities Act,
the Exchange Act, or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement of a material fact or alleged untrue statement of a material
fact contained in the Registration Statement or the Base Prospectus, the
Underwriter Information contained in the Prospectus Supplement or the Initial
Purchaser Information contained in the Private Placement Memorandum, or in any
revision or amendment thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact with respect to the
Registration Statement required to be stated therein or necessary to make the
statements therein not misleading, or with respect to the Base Prospectus,
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it or
them in connection with investigating or defending any such loss, claim,
damage, liability or action;
(c) The Seller agrees to indemnify and hold harmless the Purchaser,
its directors, its officers who signed the Registration Statement or any
amendment thereof, Lehman, its directors and officers, and each person who
controls the Purchaser or Lehman within the meaning of either the Securities
Act or the Exchange Act, to the same extent as the foregoing indemnities from
the Purchaser to the Seller, but only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission was in the
Prospectus Supplement (or any updated or supplemented Prospectus Supplement)
or the Private Placement Memorandum (or any updated or amended Private
Placement Memorandum) and was not contained in the Underwriter Information or
the Initial Purchaser Information, as applicable.
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under
this Section, notify the indemnifying party in writing of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability that it may have to any indemnified
party under this Section except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure. In case any such action is brought against any indemnified party and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any other legal expenses subsequently and
independently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation by the
indemnified party undertaken with notice to and approval by the indemnifying
party; provided, however, that an indemnified party shall have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel for the indemnified party will be at the expense of
such indemnified party unless (1) the employment of counsel by the indemnified
party has been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based upon advice of counsel to
the indemnified party) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to those
available to the indemnifying party, (3) a conflict or potential conflict
exists (based upon advice of counsel to the indemnified party) between the
indemnified party and the indemnifying party (in which case the indemnifying
party will not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in fact
employed counsel reasonably satisfactory to the indemnified party to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
subsections (a), (b) and (c) above, shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be
a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities referred to in subsection (a),
(b) or (c) above (i) in such proportion as is appropriate to reflect the
relative benefits received by the Purchaser or Lehman on the one hand and the
Seller on the other from the issuance of the Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, or
if the indemnified party failed to give the notice required under subsection
(d) above and the indemnifying party has been materially prejudiced by such
failure, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above, but also the relative fault of the
Purchaser or Lehman on the one hand and the Seller on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages or liabilities as well as any other relevant equitable considerations.
The relative benefits received by the Purchaser on the one hand and
the Seller on the other shall be deemed to be in the same proportion as the
reimbursement for expenses received by the Purchaser from the Seller pursuant
to Section 1 under the heading "Agreement" on the Closing Date bears to the
principal amount of the Certificates on such date. The relative benefits
received by Lehman on the one hand and the Seller on the other shall be deemed
to be in the same proportion as the total cash compensation received by Lehman
in connection with the underwriting of the Registered Certificates and the
placement of the Privately-Offered Certificates bears to the principal amount
of the Registered Certificates and the Privately-Offered Certificates on such
date. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state material fact related to information
supplied by the Purchaser or Lehman on the one hand, or the Seller, on the
other hand, and the parties relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission.
The Purchaser, Lehman and the Seller agree that it would not be just
and equitable if contribution pursuant to this subsection (e) were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to above in this subsection
(e). The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim that is the subject of this subsection (e).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
7. Notices. All demands, notices and communications hereunder shall
be in writing, shall be effective only upon receipt and shall, if sent to the
Purchaser, be addressed to it at Structured Asset Securities Corporation, 200
Vesey Street, 12th Floor, New York, New York, 10285, Attention: Single Family
Mortgage Department, 12th Floor; if sent to Lehman, be addressed to it at
Three World Financial Center, 12th Floor, New York, New York 10285-1200,
Attention: Scott Kimmel, Senior Vice President; or, if sent to the Seller, be
addressed to it at Washington Mutual, FA, 9200 Oakdale Avenue, Chatsworth,
California 91311, Attention: Fay L. Chapman, Senior Executive Vice President.
8. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, covenants, indemnities and other
statements of the Purchaser, Lehman and the Seller and their respective
officers set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Purchaser, Lehman or the Seller and will survive delivery of and payment for
the Certificates. The provisions of Section 6 hereof shall survive the
termination or cancellation of this Agreement.
9. Miscellaneous. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated except by
a writing signed by the party against whom enforcement of such change, waiver,
discharge or termination is sought. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, which taken
together shall constitute one and the same instrument. This Agreement
supersedes all prior or contemporaneous agreements and understandings relating
to the subject matter hereof.
10. Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
* * *
IN WITNESS WHEREOF, the Purchaser, Lehman and the Seller have caused
this Agreement to be duly executed by their respective officers as of the day
and year set forth below.
Dated: March 31, 2000 STRUCTURED ASSET SECURITIES
CORPORATION
By:
---------------------------------
Name:
Title:
LEHMAN BROTHERS INC.
By:
---------------------------------
Name:
Title:
WASHINGTON MUTUAL BANK, FA
By:
---------------------------------
Name:
Title:
SCHEDULE I
MORTGAGE LOAN SCHEDULE
EXECUTION
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
STRUCTURED ASSET SECURITIES CORPORATION
Depositor,
WASHINGTON MUTUAL BANK, FA
Seller and Servicer,
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
Trustee,
---------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2000
relating to
WASHINGTON MUTUAL MORTGAGE LOAN TRUST
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2000-1
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
----
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Calculations Respecting Mortgage Loans.....................................................27
SECTION 1.02. Calculations Respecting Accrued Interest...................................................27
ARTICLE II
CONVEYANCE OF TRUST FUND; REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Trust Fund...................................................................27
SECTION 2.02. Acceptance by Trustee......................................................................29
SECTION 2.03. Representations, Warranties and Covenants of the Servicer and Seller.......................30
SECTION 2.04. Representations, Warranties and Covenants of the Seller with respect to the Mortgage
Loans......................................................................................32
SECTION 2.05. Issuance of Certificates...................................................................39
SECTION 2.06. REMIC Provisions...........................................................................39
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. Servicing Standard.........................................................................41
SECTION 3.02. Enforcement of the Obligations of Sub-Servicers............................................42
SECTION 3.03. Termination of the Rights of Sub-Servicers.................................................43
SECTION 3.04. Liability of the Servicer..................................................................43
SECTION 3.05. Rights of the Depositor and the Trustee in Respect of the Servicer.........................43
SECTION 3.06. Trustee to Act as Servicer.................................................................44
SECTION 3.07. Collection of Mortgage Loan Payments.......................................................44
SECTION 3.08. Collection of Taxes, Assessments and Similar Items; Escrow Accounts........................46
SECTION 3.09. Permitted Withdrawals from the Custodial Account...........................................46
SECTION 3.10. Maintenance of Primary Mortgage Insurance Policies; Collections Thereunder.................47
SECTION 3.11. Maintenance of Hazard Insurance and Other Insurance........................................48
SECTION 3.12. Enforcement of Due-On-Sale Clauses; Assumption Agreements..................................49
SECTION 3.13. Realization Upon Defaulted Mortgage Loans..................................................50
SECTION 3.14. Trustee to Cooperate; Release of Trustee Mortgage Files....................................52
SECTION 3.15. Documents, Records and Funds in Possession of Servicer to be Held for the Trustee for
the Benefit of the Certificateholders......................................................53
SECTION 3.16. Servicing Compensation; Compensating Interest..............................................53
SECTION 3.17. Reports to the Depositor; Account Statements...............................................54
SECTION 3.18. Annual Statement as to Compliance..........................................................54
SECTION 3.19. Annual Independent Public Accountants' Servicing Report....................................54
SECTION 3.20. Reports to Trustee.........................................................................55
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
SECTION 4.01. Certificate Account........................................................................55
SECTION 4.02. Determination of LIBOR.....................................................................56
SECTION 4.03. Monthly Statements to Certificateholders...................................................57
ARTICLE V
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 5.01. Distributions Generally....................................................................59
SECTION 5.02. Distributions from the Certificate Account.................................................59
SECTION 5.03. Allocation of Losses.......................................................................62
SECTION 5.04. Monthly Advances by the Servicer...........................................................63
SECTION 5.05. Advances for Attorneys' Fees...............................................................63
SECTION 5.06. Nonrecoverable Advances....................................................................63
SECTION 5.07. Advance Procedures.........................................................................64
SECTION 5.08. Basis Risk Reserve Fund....................................................................64
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates...........................................................................65
SECTION 6.02. Registration of Transfer and Exchange of Certificates......................................65
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates..........................................68
SECTION 6.04. Persons Deemed Owners......................................................................68
SECTION 6.05. Access to List of Certificateholders' Names and Addresses..................................68
SECTION 6.06. Maintenance of Office or Agency............................................................68
SECTION 6.07. Book-Entry Certificates....................................................................69
SECTION 6.08. Notices to Clearing Agency.................................................................70
SECTION 6.09. Definitive Certificates....................................................................70
ARTICLE VII
THE DEPOSITOR, SELLER AND THE SERVICER
SECTION 7.01. Liabilities of the Depositor, Seller and the Servicer......................................70
SECTION 7.02. Merger or Consolidation of the Depositor, the Seller or the Servicer.......................71
SECTION 7.03. Limitation on Liability of the Depositor, the Servicer and Others..........................72
SECTION 7.04. Servicer Not to Resign.....................................................................72
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds.............................................73
SECTION 7.06. Seller and Servicer May Own Certificates...................................................73
ARTICLE VIII
DEFAULT
SECTION 8.01. Events of Default..........................................................................73
SECTION 8.02. Trustee to Act; Appointment of Successor...................................................74
SECTION 8.03. Notification to Certificateholders.........................................................76
SECTION 8.04. Waiver of Events of Default................................................................76
ARTICLE IX
CONCERNING THE TRUSTEE
SECTION 9.01. Duties of Trustee..........................................................................76
SECTION 9.02. Certain Matters Affecting the Trustee......................................................77
SECTION 9.03. Trustee Not Liable for Certificates or Mortgage Loans......................................79
SECTION 9.04. Trustee May Own Certificates...............................................................79
SECTION 9.05. Trustee's Compensation and Expenses........................................................79
SECTION 9.06. Eligibility Requirements for Trustee.......................................................79
SECTION 9.07. Resignation and Removal of Trustee.........................................................80
SECTION 9.08. Successor Trustee..........................................................................80
SECTION 9.09. Merger or Consolidation of Trustee.........................................................81
SECTION 9.10. Appointment of Co-Trustee or Separate Trustee..............................................81
SECTION 9.11. Office of the Trustee......................................................................82
SECTION 9.12. Tax Returns, 1934 Act Reporting, Other Data................................................82
ARTICLE X
TERMINATION
SECTION 10.01. Termination upon Liquidation or Repurchase of all Mortgage Loans...........................83
SECTION 10.02. Procedure Upon Optional or Other Final Termination.........................................84
SECTION 10.03. Additional Termination Requirements........................................................84
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment..................................................................................85
SECTION 11.02. Recordation of Agreement; Counterparts.....................................................86
SECTION 11.03. Governing Law..............................................................................87
SECTION 11.04. Intention of Parties.......................................................................87
SECTION 11.05. Notices....................................................................................88
SECTION 11.06. Severability of Provisions.................................................................88
SECTION 11.07. Limitation on Rights of Certificateholders.................................................89
SECTION 11.08. Certificates Nonassessable and Fully Paid..................................................89
EXHIBIT A FORM OF CLASS A1 AND A2 CERTIFICATE...........................................................A-1
EXHIBIT B FORM OF CLASS M1, M2 AND M3 CERTIFICATE.......................................................B-1
EXHIBIT C FORM OF CLASS B1, B2 AND B3 CERTIFICATE.......................................................C-1
EXHIBIT D FORM OF CLASS R CERTIFICATE...................................................................D-1
EXHIBIT E SCHEDULE OF MORTGAGE LOANS....................................................................E-1
EXHIBIT F-1 FORM OF INITIAL LOAN LIST CERTIFICATION.....................................................F-1-1
EXHIBIT F-2 FORM OF INITIAL CERTIFICATION OF TRUSTEE....................................................F-2-1
EXHIBIT F-3 FORM OF FINAL CERTIFICATION OF TRUSTEE......................................................F-3-1
EXHIBIT G FORM OF REQUEST FOR RELEASE...................................................................G-1
EXHIBIT H FORM OF RULE 144A TRANSFER CERTIFICATE........................................................H-1
EXHIBIT I FORM OF ERISA TRANSFER AFFIDAVIT..............................................................I-1
EXHIBIT J-1 FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)................................J-1-1
EXHIBIT J-2 FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)................................J-2-1
EXHIBIT K FORM OF NOTE ALLONGE..........................................................................K-1
</TABLE>
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1, 2000, is
hereby executed by and among STRUCTURED ASSET SECURITIES CORPORATION, a
Delaware corporation, as depositor (the "Depositor"), WASHINGTON MUTUAL BANK,
FA ("Washington Mutual"), in its capacity as seller (the "Seller") and in its
capacity as servicer (the "Servicer"), and BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., a national banking association, as trustee (the "Trustee").
Capitalized terms used in this Agreement and not otherwise defined herein will
have the meanings assigned to them in Article I below.
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from the Seller on the
Closing Date pursuant to the Mortgage Loan Purchase Agreement and is the owner
of the Mortgage Loans and the other property being conveyed by it to the
Trustee for inclusion in the Trust Fund. The Depositor has duly authorized the
execution and delivery of this Agreement to provide for the conveyance to the
Trustee of the Mortgage Loans and the other property constituting the Trust
Fund in exchange for the Certificates.
All covenants and agreements made by the Depositor, the Seller, the
Servicer and the Trustee herein with respect to the Mortgage Loans and the
other property constituting the Trust Fund are for the benefit and security of
the Certificateholders. The Depositor, the Seller and the Servicer are
entering into this Agreement, and the Trustee is accepting the trusts created
hereby and thereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as comprising two real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, the Lower Tier
REMIC and the Upper Tier REMIC, respectively). Each Certificate, other than
the Class R Certificate, represents ownership of a regular interest in the
Upper Tier REMIC for purposes of the REMIC Provisions. In addition, each
Certificate, other than the Class R, Class A2, and Class B3 Certificates,
represents a right to receive payments with respect to any Basis Risk
Shortfalls from the Basis Risk Reserve Fund created pursuant to Section 5.08.
The Class R Certificate represents ownership of the sole class of residual
interest in each of the Lower Tier REMIC and the Upper Tier REMIC for purposes
of the REMIC Provisions. The Upper Tier REMIC shall hold as assets the several
classes of uncertificated Lower Tier Interests, other than the Class LTR
Interest, set out below. Each such Lower Tier Interest, other than the Class
LTR Interest, is hereby designated as a regular interest in the Lower Tier
REMIC.
<TABLE>
<CAPTION>
Lower Tier Interest
-------------------
Rate Initial Lower Tier Principal Amount
----------------------- ----------------
<S> <C> <C>
Class LT-A1 (1) $4,799,976,000.00
Class LT-A2 (1) 1,599,992,000.00
Class LT-M1 (1) 100,523,000.00
Class LT-M2 (1) 83,769,000.00
Class LT-M3 (1) 33,508,000.00
Class LT-B1 (1) 40,209,000.00
Class LT-B2 (1) 23,455,000.00
Class LT-B3 (1) 20,104,869.34
Class LT-R (2) (2)
</TABLE>
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the weighted average of
the Net Mortgage Rates of the Mortgage Loans as of the first day of the
calendar month immediately preceding such Distribution Date.
(2) The Class LT-R interest does not have a principal amount or an interest
rate.
The Upper Tier REMIC shall issue the following classes of interests
and each Upper Tier Interest, other than the Class UT-R Interest, is hereby
designated as a regular interest in the Upper Tier REMIC.
<TABLE>
<CAPTION>
Upper Tier Class Upper Tier Interest Initial Upper Tier Corresponding
---------------- ------------------- ------------------ -------------
Designation Rate Principal Amount Certificate
----------- ---- ---------------- -----------
<S> <C> <C> <C>
Class A1 (1) $4,799,976,000.00 Class A1
Class A2 (2) 1,599,992,000.00 Class A2
Class M1 (1) 100,523,000.00 Class M1
Class M2 (1) 83,769,000.00 Class M2
Class M3 (1) 33,508,000.00 Class M3
Class B1 (1) 40,209,000.00 Class B1
Class B2 (1) 23,455,000.00 Class B2
Class B3 (1) 20,104,869.34 Class B3
Class A1X (3) (3) Class A2
Class A2X (4) (4) Class A2
Class M1X (5) (5) Class A2
Class M2X (6) (6) Class A2
Class M3X (7) (7) Class A2
Class B1X (8) (8) Class A2
Class B2X (9) (9) Class A2
Class UT-R (10) (10) Class R
</TABLE>
(1) The interest rates with respect to any Distribution Date for these
interests is identical to the Certificate Interest Rate for the
Corresponding Class of Certificates.
(2) The Class A2 Interest is a principal only interest.
(3) The Class A1X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-A1 Interest and will have a per annum interest rate with
respect to any Distribution Date equal to the excess, if any, of the rate
at which interest is payable on the Class LT-A1 Interest over a rate
equal to the product of (i) the rate at which interest is payable on the
Class A1 Interest and (ii) a fraction, the numerator of which is the
actual number of days in the Accrual Period and the denominator of which
is 30.
(4) The Class A2X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-A2 Interest and will have an interest rate with respect to
any Distribution Date equal to the rate at which interest is payable on
the Class LT-A2 Interest.
(5) The Class M1X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-M1 Interest and will have a per annum interest rate with
respect to any Distribution Date equal to the excess, if any, of the rate
at which interest is payable on the Class LT-M1 Interest over a rate
equal to the product of (i) the rate at which interest is payable on the
Class M1 Interest and (ii) a fraction, the numerator of which is the
actual number of days in the accrual period, and the denominator of which
is 30.
(6) The Class M2X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-M2 Interest and will have a per annum interest rate with
respect to any Distribution Date equal to the excess, if any, of the rate
at which interest is payable on the Class LT-M2 Interest over a rate
equal to the product of (i) the rate at which interest is payable on the
Class M2 Interest and (ii) a fraction, the numerator of which is the
actual number of days in the accrual period, and the denominator of which
is 30.
(7) The Class M3X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-M3 Interest and will have a per annum interest rate with
respect to any Distribution Date equal to the excess, if any, of the rate
at which interest is payable on the Class LT-M3 Interest over a rate
equal to the product of (i) the rate at which interest is payable on the
Class M3 Interest and (ii) a fraction, the numerator of which is the
actual number of days in the accrual period, and the denominator of which
is 30.
(8) The Class B1X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-B1 Interest and will have a per annum interest rate with
respect to any Distribution Date equal to the excess, if any, of the rate
at which interest is payable on the Class LT-B1 Interest over a rate
equal to the product of (i) the rate at which interest is payable on the
Class B1 Interest and (ii) a fraction, the numerator of which is the
actual number of days in the accrual period, and the denominator of which
is 30.
(9) The Class B2X Interest is an interest only interest that has a notional
principal balance that will at all times equal the principal balance of
the Class LT-B2 Interest and will have a per annum interest rate with
respect to any Distribution Date equal to the excess, if any, of the rate
at which interest is payable on the Class LT-B2 Interest over a rate
equal to the product of (i) the rate at which interest is payable on the
Class B2 Interest and (ii) a fraction, the numerator of which is the
actual number of days in the accrual period, and the denominator of which
is 30.
(10) The Class UT-R does not have a principal amount or an interest rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than the Lower Tier Interests and the Basis Risk
Reserve Fund.
Distributions of principal on each class of Lower Tier Interests for
any Distribution Date shall correspond to the principal distributions required
to be made on the Corresponding Class of Certificates on such Distribution
Date. Applied Loss Amounts and Net Prepayment Interest Shortfalls shall be
allocated among the Lower Tier Interests in the same manner that such items
are allocated among the Corresponding Classes of Certificates.
The following table sets forth (or describes) the Class designation,
the Certificate Interest Rate, initial Class Principal Amount and minimum
denomination for each Class of Certificates comprising the interests in the
Trust Fund created hereunder:
<TABLE>
<CAPTION>
Certificate Interest Initial Class Minimum
-------------------- ------------- -------
Class Designation Rate Principal Amount Denominations
----------------- ---- ---------------- -------------
<S> <C> <C> <C>
Class A1 (1) $4,799,976,000.00 $ 25,000
Class A2 (2) (2) (2)
Class M1 (3) 100,523,000.00 25,000
Class M2 (4) 83,769,000.00 25,000
Class M3 (5) 33,508,000.00 25,000
Class B1 (6) 40,209,000.00 100,000
Class B2 (7) 23,455,000.00 100,000
Class B3 (8) 20,104,869.34 100,000
Class R (9) (9) (9)
</TABLE>
(1) The Certificate Interest Rate with respect to any Distribution Date for
the Class A1 Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 0.29% and (ii) the Net Funds Cap for such Distribution
Date; provided, that if the Servicer does not exercise its option to
purchase the Mortgage Loans and related property pursuant to Section
10.01 on the Distribution Date on which it is first entitled to do so,
then with respect to such Distribution Date and each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class A1 Certificates will be LIBOR plus 0.58%.
(2) The Class A2 Certificates will consist of a (i) principal-only component
(the "A2-1 Component") having an initial Component Principal Amount equal
to $1,599,992,000.00 and (ii) an interest-only component (the "A2-2
Component") having a Component Notional Amount equal to the Component
Principal Amount of the A2-1 Component at any date of determination. The
A2-2 Component will accrue interest for each Accrual Period at a per
annum variable rate equal to the product of (a) 12 and (b) the percentage
resulting from dividing the Net Excess Interest for the related
Distribution Date by the Component Notional Amount of the A2-2 Component
for such date (i.e., the Component Principal Amount of the A2-1 Component
immediately prior to such Distribution Date). The A2-1 Component and A2-2
Component of the Class A2 Certificates are non-severable components.
(3) The Certificate Interest Rate with respect to any Distribution Date for
the Class M1 Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 0.40% and (ii) the Net Funds Cap for such Distribution
Date; provided, that if the Servicer does not exercise its option to
purchase the Mortgage Loans and related property pursuant to Section
10.01 on the Distribution Date on which it is first entitled to do so,
then with respect to such Distribution Date and each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M1 Certificates will be LIBOR plus 0.80%.
(4) The Certificates Interest Rate with respect to any Distribution Date for
the Class M2 Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 0.80% and (ii) the Net Funds Cap for such Distribution
Date; provided, that if the Servicer does not exercise its option to
purchase the Mortgage Loans and related property pursuant to Section
10.01 on the Distribution Date on which it is first entitled to do so,
then with respect to such Distribution Date and each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M2 Certificates will be LIBOR plus 1.30%.
(5) The Certificate Interest Rate with respect to any Distribution Date for
the Class M3 Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 1.75% and (ii) the Net Funds Cap for such Distribution
Date; provided, that if the Servicer does not exercise its option to
purchase the Mortgage Loans and related property pursuant to Section
10.01 on the Distribution Date on which it is first entitled to do so,
then with respect to such Distribution Date and each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class M3 Certificates will be LIBOR plus 2.25%.
(6) The Certificate Interest Rate with respect to any Distribution Date for
the Class B1 Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 4.00% and (ii) the Net Funds Cap for such Distribution
Date; provided, that if the Servicer does not exercise its option to
purchase the Mortgage Loans and related property pursuant to Section
10.01 on the Distribution Date on which it is first entitled to do so,
then with respect to such Distribution Date and each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B1 Certificates will be LIBOR plus 4.50%.
(7) The Certificate Interest Rate with respect to any Distribution Date for
the Class B2 Certificates is the per annum rate equal to the lesser of
(i) LIBOR plus 8.00% and (ii) the Net Funds Cap for such Distribution
Date; provided, that if the Servicer does not exercise its option to
purchase the Mortgage Loans and related property pursuant to Section
10.01 on the Distribution Date on which it is first entitled to do so,
then with respect to such Distribution Date and each subsequent
Distribution Date the per annum rate calculated pursuant to clause (i)
above with respect to the Class B2 Certificates will be LIBOR plus 8.50%.
(8) The Certificate Interest Rate with respect to any Distribution Date for
the Class B3 Certificates is a per annum variable rate equal to the
weighted average of the Net Mortgage Rates of the Mortgage Loans as of
the first day of the calendar month immediately preceding such
Distribution Date.
(9) The Class R Certificates will be issued without a Certificate Principal
Amount and will not bear interest. The Class R Certificate will each be
issued as a single Certificate evidencing the entire Percentage Interest
in each such Class.
As of the Cut-off Date, the Mortgage Loans had an aggregate
Scheduled Principal Balance of $6,701,536,869.34.
The parties hereto intend to effect an absolute sale and assignment
of the Mortgage Loans to the Trustee for the benefit of Certificateholders
under the Mortgage Loan Purchase Agreement and this Agreement. However, the
Seller and the Depositor will hereunder absolutely assign, and as a
precautionary matter grant a security interest in and to, its rights, if any,
in the Trust Fund and the Mortgage Loans to the Trustee on behalf of
Certificateholders to ensure that the interest of the Certificateholders
hereunder in the Mortgage Loans is fully protected.
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Seller 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 following meanings:
1933 Act: The Securities Act of 1933, as amended.
1934 Act: The Securities Exchange Act of 1934, as amended.
A2-1 Component: As defined in the Preliminary Statement.
A2-2 Component: As defined in the Preliminary Statement.
Accrual Period: With respect to any Distribution Date and any Class
of LIBOR Certificates, the one-month period beginning on the immediately
preceding Distribution Date (or on the Settlement Date, in the case of the
first Accrual Period) and ending on the day immediately preceding the related
Distribution Date. With respect to any Distribution Date and the Class B3
Certificates and the A2-2 Component of the Class A2 Certificates, and with
respect to each Lower Tier Interest, the calendar month immediately preceding
the month of such Distribution Date.
Adverse REMIC Event: As defined in Section 2.06(f).
Aggregate Current Interest: With respect to any Accrual Period, the
aggregate amount of Current Interest accrued on the Certificates.
Aggregate Loan Balance: The aggregate of the Scheduled Principal
Balances of all Mortgage Loans at the date of determination.
Aggregate Scheduled Collateral Interest: With respect to any Due
Period, the aggregate of the Monthly Payments on the Mortgage Loans
attributable to interest assuming no Realized Losses are incurred on the
Mortgage Loans plus any Deferred Interest for such Due Period.
Aggregate Voting Interests: The aggregate of the Voting Interests of
all Certificates under this Agreement.
Agreement: This Pooling and Servicing Agreement and any and all
exhibits, amendments or supplements hereto.
Allocable Share of Deferred Interest: With respect to any
Certificate or the A2-2 Component and any Distribution Date, an amount equal
to the reduction in Current Interest distributable on such Certificate or the
A2-2 Component attributable to Deferred Interest, as provided in the
definition of Current Interest.
Applied Loss Amount: With respect to any Distribution Date, the
amount, if any, by which (x) the aggregate Certificate Principal Amount and
Component Principal Amount of the Certificates after giving affect to
distributions on such date, but before giving effect to application of the
Applied Loss Amount with respect to such date, exceeds (y) the Aggregate Loan
Balance for such Distribution Date.
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 at the
time of such origination, whichever is less, or with respect to any Mortgage
Loan that represents a refinancing, the lower of the appraised value at
origination or the appraised value of the Mortgaged Property based upon the
appraisal made at the time of such refinancing.
Assignment: An assignment from the Seller, in blank, of the
Mortgage, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect, if recorded, of
record the absolute sale and assignment of the Mortgage Loan to the Trustee
for the benefit of Certificateholders, which assignment, may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by
an Opinion of Counsel to that effect. An assignment shall include all
applicable recording information, unless the related original Mortgage has
been delivered for recording to the appropriate public recording office but
has not yet been returned to the Seller.
B1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred with respect to such Distribution Date, the amount, if any, by which
(x) the sum of (i) the aggregate Certificate Principal Amount of the Class A1,
Class M1, Class M2 and Class M3 Certificates and the Component Principal
Amount of the A2-1 Component, in each case after giving effect to
distributions on such Distribution Date and (ii) the Class Principal Amount of
the Class B1 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) 98.70% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Loan Balance for such Distribution Date exceeds (ii) the initial
Class Principal Amount of the Class B3 Certificates.
B2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred with respect to such Distribution Date, the amount, if any, by which
(x) the sum of (i) the aggregate Certificate Principal Amount of the Class A1,
Class M1, Class M2, Class M3 and Class B1 Certificates and the Component
Principal Amount of the A2-1 Component, in each case after giving effect to
distributions on such Distribution Date and (ii) the Class Principal Amount of
the Class B2 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) 99.40% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Loan Balance for such Distribution Date exceeds (ii) the initial
Class Principal Amount of the Class B3 Certificates.
Bankruptcy Code: The United States Bankruptcy Code, as amended from
time to time (11 U.S.C.).
Basis Risk Payment: As to any Distribution Date, the sum of (i) any
Basis Risk Shortfall, (ii) Unpaid Basis Risk Shortfall and (iii) the Required
Reserve Fund Deposit for such date; provided, however, that with respect to
any Distribution Date such payment may not exceed Current Interest on the A2-2
Component.
Basis Risk Reserve Fund: A fund created as part of the Trust Fund
pursuant to Section 5.08 of this Agreement but which is not an asset of any of
the REMICs.
Basis Risk Shortfall: With respect to any Distribution Date and any
Class of LIBOR Certificates, the amount by which the Certificate Interest Rate
applicable to such Certificate for such date, determined without regard to the
Net Funds Cap for such date, exceeds such Net Funds Cap.
Beneficial Holder: A Person holding a beneficial interest in any
Certificate through a Participant or an Indirect Participant or a Person
holding a beneficial interest in any Definitive Certificate.
Bloomberg: Bloomberg L.P.
Book-Entry Certificates: Certificates evidencing a beneficial
interest in the Trust Fund, ownership and transfers of which shall be made
through book entries, as described in Section 6.07.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in New York or the state in which the
Servicer or the Corporate Trust Office are located are authorized or obligated
by law or executive order to be closed.
Carryforward Interest: With respect to any Distribution Date and
each Class of Senior Certificates, the sum of (i) the amount, if any, by which
(x) the sum of (A) Current Interest for such Class for the immediately
preceding Distribution Date and (B) any unpaid Carryforward Interest for such
Class from previous Distribution Dates exceeds (y) the amount allocable
(calculated for the A2-2 Component without regard to any reduction by the
Basis Risk Payment) in respect of interest on such Class on such immediately
preceding Distribution Date, and (ii) interest on such amount for the related
Accrual Period at the applicable Certificate Interest Rate.
Cash Liquidation: As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Servicer reasonably and in good
faith expects to be finally recoverable with respect to such Mortgage Loan.
Certificate: Any Class A1, Class A2, Class M1, Class M2, Class M3,
Class B1, Class B2, Class B3 and Class R Certificate executed and
authenticated by the Trustee for the benefit of the Certificateholders in
substantially the form or forms attached as Exhibits hereto.
Certificate Account: The separate account or accounts created and
maintained by the Trustee pursuant to Section 4.01, in the name of the Trustee
for the benefit of the Certificateholders for deposit of payments and
collections in respect of the Mortgage Loans pursuant to Section 4.01 hereof,
which account or accounts must be an Eligible Account or Accounts.
Certificate Interest Rate: With respect to the Class A1, Class M1,
Class M2, Class M3, Class B1, Class B2 and Class B3 Certificates and the A2-2
Component of the Class A2 Certificates, the applicable per annum rate set
forth or described in the Preliminary Statement hereto.
Certificate Principal Amount: With respect to any Certificate other
than the Class A2 Certificate and the Class R Certificates and any
Distribution Date, the initial Certificate Principal Amount thereof, reduced
by all amounts distributed in reduction thereof on previous Distribution Dates
pursuant to Section 5.02 and increased by such Certificate's Allocable Share
of Deferred Interest for such Distribution Date. The Class R Certificates will
be issued without a Certificate Principal Amount.
Certificate Register: The register maintained pursuant to Section
6.02(a) hereof.
Certificateholder or Holder: The Person in whose name a Certificate
is registered in the Certificate Register.
Class: Collectively, all of the Certificates bearing the same
designation.
Class A Certificate: Any Class A1 or Class A2 Certificate.
Class B Certificate: Any Class B1, Class B2 or Class B3 Certificate.
Class M Certificate: Any Class M1, Class M2 or Class M3 Certificate.
Class Principal Amount: With respect to each Class of Certificates
other than the Class R Certificates, the aggregate of the Certificate
Principal Amounts (or Component Principal Amounts in the case of the Class A2
Certificates) of all Certificates of such Class at the date of determination.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the 1934 Act, which initially shall be DTC.
Closing Date: March 31, 2000.
Code: The Internal Revenue Code of 1986, as amended, and as it may
be further amended from time to time, and any successor statutes thereto.
COFI Index: The Cost of Funds Index of the 11th District of the
Federal Home Loan Bank System.
Compensating Interest: With respect to any Distribution Date, an
amount equal to interest shortfalls resulting from Principal Prepayments in
Full by a Mortgagor during the related Prepayment Period, but not more than
the lesser of (a) one-twelfth of 0.25% of the aggregate Scheduled Principal
Balance of the Mortgage Loans immediately preceding such Distribution Date and
(b) the sum of the Servicing Fee to which the Servicer is entitled on such
Distribution Date, all income and gain on amounts held in the Custodial
Account that are payable to the Certificateholders with respect to such
Distribution Date and any other servicing compensation to which the Servicer
may be entitled on such Distribution Date pursuant to the terms hereof.
Component: The components of the Class A2 Certificates having the
following designations and initial Component Notional Amounts or Component
Principal Amounts:
Initial Component Notional
Component or Principal Amount
--------- -------------------
A2-1 $1,599,992,000.00
A2-2* $1,599,992,000.00
---------------
* The Component Notional Amount of the A2-2 Component with respect
to any Distribution Date will equal the Component Principal
Amount of the A2-1 Component.
Component Notional Amount: With respect to the A2-2 Component and
any Distribution Date, the Component Notional Amount set forth in the
definition of Component for such Distribution Date.
Component Principal Amount: With respect to the A2-1 Component and
any Distribution Date, the initial Component Principal Amount thereof set
forth in the definition of Component, reduced by all amounts distributed in
reduction thereof on previous Distribution Dates pursuant to Section 5.02 and
increased by such Component's Allocable Share of Deferred Interest for such
Distribution Date.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Agreement is located at 1761 East St. Andrew Place, Santa Ana, California
92705-4934 Attention: Washington Mutual Mortgage Loan Trust, Mortgage
Pass-Through Certificates, Series 2000-1.
Corresponding Class: The class of interests in any REMIC created
under this Agreement that correspond to the Class of interests in another such
REMIC or to a Class of Certificates in the manner set out below:
Lower Tier Class Corresponding
---------------- -------------
Designation Upper Tier Interest Certificate
----------- ------------------- -----------
Class LT-A1 Class A1 Class A1
Class A1X Class A2
Class LT-A2 Class A2 Class A2
Class A2X Class A2
Class LT-M1 Class M1 Class M1
Class M1X Class A2
Class LT-M2 Class M2 Class M2
Class M2X Class A2
Class LT-M3 Class M3 Class M3
Class M3X Class A2
Class LT-B1 Class B1 Class B1
Class B1X Class A2
Class LT-B2 Class B2 Class B2
Class B2X Class A2
Class LT-B3 Class B3 Class B3
Class LT-R None Class R
None Class UT-R Class R
Current Interest: With respect to the Class A1, Class M1, Class M2,
Class M3, Class B1, Class B2 and Class B3 Certificates and the A2-2 Component
and any Distribution Date, the aggregate of interest accrued at the applicable
Certificate Interest Rate during the related Accrual Period on the Certificate
Principal Amount or Component Notional Amount, as applicable, of such Class
immediately prior to such Distribution Date; provided, however, that the
amount of Current Interest distributable on a Distribution Date with respect
to any Class of Certificates shall be reduced by the amount (if any) of
Deferred Interest accrued on the Mortgage Loans for the month preceding such
Distribution Date, allocated to such Class of Certificates in the following
order of priority:
first, in reduction of Current Interest distributable to the A2-2
Component of the Class A2 Certificates until such Current Interest is
reduced to zero; provided, however, that for purposes of this clause
first, Current Interest shall be reduced by any Basis Risk Payments for
such Distribution Date prior to any reduction for Deferred Interest; and
second, any such remaining Deferred Interest to be allocated in
reduction of Current Interest distributable on the Class B3, Class B2,
Class B1, Class M3, Class M2, Class M1 and Class A1 Certificates, in that
order, such that no reduction in Current Interest for any such Class
shall be made to the extent that Current Interest for a lower-ranking
Class is available.
Curtailment: Any Principal Prepayment made by a Mortgagor which is
not a Principal Prepayment in Full.
Custodial Account: The deposit account or accounts created and
maintained by the Servicer pursuant to Section 3.07(b) hereof in a depository
institution which may be the Servicer for the benefit of the
Certificateholders, which account or accounts must be Eligible Accounts.
Cut-off Date: March 1, 2000.
Cut-off Date Aggregate Loan Balance: The Aggregate Loan Balance as
of the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court
of competent jurisdiction in a proceeding under the Bankruptcy Code, except
such a reduction constituting a Deficient Valuation or any reduction that
results in a permanent forgiveness of principal.
Deferred Interest: With respect to each Mortgage Loan and each
related Due Date, the excess, if any, of the amount of interest accrued on
such Mortgage Loan from the preceding Due Date to such Due Date over the
amount of interest included in the Monthly Payment payable on such Due Date.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount
less than the then outstanding indebtedness under the Mortgage Loan, or that
results in a permanent forgiveness of principal, which valuation in either
case results from a proceeding under the Bankruptcy Code.
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by
a Replacement Mortgage Loan.
Delinquency Rate: With respect to any calendar month, the fraction,
expressed as a percentage, the numerator of which is the aggregate Scheduled
Principal Balance of all Mortgage Loans 60 or more days delinquent (including
all foreclosures and REO Properties) as of the close of business on the first
day of next month, and the denominator of which is the Aggregate Loan Balance
as of the close of business on the last day of such month.
Delivered: With respect to any Eligible Investment, when the steps
applicable to such item as specified below are completed:
(i) if such item is an instrument, delivering such instrument to the
Trustee endorsed to the Trustee or its nominee or custodian or endorsed
in blank;
(ii) if such item is a certificated security, delivering such
certificated security to the Trustee in bearer form or in registered form
issued to the Trustee or endorsed to the Trustee or its nominee or
custodian or endorsed in blank by an effective endorsement;
(iii) if such item is a security entitlement other than a United
States Security Entitlement, causing a securities intermediary (who shall
maintain the related financial asset in a quantity corresponding to the
aggregate of all security entitlements it has established with respect to
such financial asset) to indicate by book entry that such security
entitlement has been credited to a securities account of the Trustee or
its nominee or custodian with such securities intermediary;
(iv) if such item is a United States Security Entitlement, causing a
securities intermediary (who shall maintain the related financial asset
in a quantity corresponding to the aggregate of all security entitlements
it has established with respect to such financial asset) to indicate by
book entry that such United States Security Entitlement has been credited
to a securities account of the Trustee or its nominee or custodian with
such securities intermediary;
(v) if such item is a securities account, causing the securities
intermediary to indicate by book entry that all security entitlements
carried in the securities account have been credited to such securities
account; and
(vi) if such item is an uncertificated security, causing the issuer
of such uncertificated security to register the Trustee or its nominee or
custodian as the registered owner of such uncertificated security.
Depositor: Structured Asset Securities Corporation, a Delaware
corporation, or its successor in interest.
Depository Agreement: The Letter of Representation by and among DTC,
the Depositor and the Trustee with respect to the Book-Entry Certificates.
Determination Date: The 18th day (or if such 18th day is not a
Business Day, the Business Day immediately preceding such 18th day) of the
month of the related Distribution Date.
Disqualified Organization: Either (i) the United States, (ii) any
state or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative
described in section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code unless such organization is subject to the tax imposed
by section 511 of the Code, (vii) any organization described in section
1381(a)(2)(C) of the Code, or (viii) any "electing large partnership"
described in section 775 of the Code, or (ix) any other entity designated as a
Disqualified Organization by relevant legislation amending the REMIC
Provisions and in effect at or proposed to be effective as of the time of the
determination. In addition, a corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
Freddie Mac, a majority of its board of directors is not selected by such
governmental unit.
Distribution Date: The 25th day of each month or, if such 25th day
is not a Business Day the next succeeding Business Day, commencing in April
2000.
Downgrade Event: The date upon which the long-term unsecured debt
rating of Washington Mutual is downgraded by Moody's below "A2," by S&P below
"A-" and by Fitch below A.
DTC: The Depository Trust Company.
Due Date: The date specified in the Mortgage Note on which Monthly
Payments are due.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account or accounts maintained with
a federal or state-chartered depository institution or trust company (which
may be the Servicer or an affiliate of the Servicer or which may be the
Trustee or an affiliate of the Trustee) the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term
unsecured debt obligations of such holding company) are rated by each Rating
Agency in its highest short-term rating category, provided that so long as
Washington Mutual is the Servicer, any account maintained with the Servicer
shall be an Eligible Account if the long-term unsecured debt obligations of
Washington Mutual are rated "A2" by Moody's or "A-" by S&P, (ii) an account or
accounts the deposits in which are fully insured by the FDIC, provided that
any such deposits not so insured shall be otherwise maintained such that (as
evidenced by an Opinion of Counsel delivered to the Trustee and the Rating
Agencies) the applicable Certificateholders have a claim with respect to the
funds in such account or a perfected first priority security interest against
any collateral (which shall be limited to Eligible Investments) securing such
funds that is superior to claims of any other depositors or creditors of the
depository institution or trust company with which such account is maintained,
(iii) a trust account or accounts maintained with the Trustee or the trust
department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity, provided that any such state
chartered depository institution is subject to regulation regarding funds on
deposit substantially similar to the regulations set forth in 12 C.F.R.
Section 9.10(b) or (iv) any account maintained at any Federal Home Loan Bank.
Eligible Investments: At any time, any one or more of the following
obligations, instruments and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving the highest
long-term rating of Moody's, S&P and Fitch, and will not result in the
downgrading or withdrawal of the rating, if any, then assigned to the
Certificates by each applicable Rating Agency;
(iii) commercial paper (having original maturities of not more than
270 days) which is then rated in the highest commercial paper rating
category of Moody's, S&P and Fitch, and will not result in the
downgrading or withdrawal of the rating, if any, then assigned to the
Certificates by each applicable Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal funds
or bankers' acceptances (in each case having maturities of not more than
365 days) issued by any depository institution or trust company
incorporated under the laws of the United States or of any state thereof
and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or long-term
debt obligations of such depository institution or trust company (or in
the case of a depository institution or trust company that is the
principal subsidiary of a holding company, the commercial paper or
long-term debt obligations of such holding company) are then rated in the
highest rating category of Moody's, S&P and Fitch, in the case of
commercial paper, and in one of the two highest rating categories in the
case of long-term debt obligations, and will not result in the
downgrading or withdrawal of the rating, if any, then assigned to the
Certificates by each applicable Rating Agency, and, in the case of
short-term debt obligations which have maturities of 30 days or less, the
highest rating assigned by each Rating Agency;
(v) demand or time deposits or certificates of deposit issued by (a)
any Federal Home Loan Bank or (b) any bank or trust company or savings
association which is rated at least "A" by Moody's and "A2" by S&P which
has combined capital, surplus and undistributed profits of not less than
$50 million and fully insured by the FDIC;
(vi) repurchase obligations with respect to any security described
in (i) and (ii) above or any other security issued or guaranteed by an
agency or instrumentality of the United States, in either case entered
into with a depository institution or trust company (acting as principal)
described in (iv) above;
(vii) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment or contractual
commitment providing for such investments are then rated in the highest
rating category of each Rating Agency or in such lower rating category as
will not result in the downgrading or withdrawal of the rating, if any,
then assigned to the Certificates by each applicable Rating Agency; and
(viii) units of taxable money-market portfolios rated in the highest
rating category by Moody's and S&P and not restricted to obligations
issued or guaranteed by any agency or instrumentality of the United
States or entities whose obligations are backed by the full faith and
credit of the United States and repurchase agreements collateralized by
such obligations.
provided, that (A) such obligation or security is held for a temporary period
pursuant to Treasury Regulations Section 1.860G-2(g)(1), and (B) Eligible
Investments shall include only such obligations or securities that are payable
on demand or mature on or before the (i) Business Day immediately preceding
the next Distribution Date with respect to amounts on deposit in the
Certificate Account (except for Eligible Investments described in clauses
(iii) and (iv) of this definition which may mature on the Distribution Date)
and (ii) the second Business Day immediately preceding the next Distribution
Date with respect to amounts on deposit in the Custodial Account. In addition,
no Eligible Investment which incorporates a penalty for early withdrawal will
be used unless the maturity of such Eligible Investment is on or before the
Business Day immediately preceding the next Distribution Date.
ERISA-Restricted Certificate: Any Class M1, Class M2, Class M3,
Class B1, Class B2, Class B3 and Class R Certificate.
Escrow Account: As defined in Section 3.08.
Event of Default: As defined in Section 8.01 hereof.
Fannie Mae: The Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
10.01, which Final Distribution Date shall in no event be later than the end
of the 90-day liquidation period described in Section 10.03.
Fitch: Fitch IBCA, Inc. or any successor thereto.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Index: The COFI Index specified in the related Mortgage Note for
calculation of the Mortgage Rate thereof.
Indirect Participants: Entities, such as banks, brokers, dealers and
trust companies, that clear through or maintain a custodial relationship with
a Participant, either directly or indirectly.
Initial LIBOR Rate: LIBOR as determined two Business Days prior to
the Settlement Date.
Insurance Proceeds: Amounts paid pursuant to any insurance policy
with respect to a Mortgage Loan that have not been used to restore the related
property.
Interest Remittance Amount: With respect to any Distribution Date,
the sum of (i) all interest collected (other than Payaheads) or advanced in
respect of Monthly Payments on the Mortgage Loans during the related Due
Period, less (x) the Servicing Fee with respect to the Mortgage Loans, (y)
unreimbursed Monthly Advances to the extent allocable to interest and (z)
other amounts due to the Servicer with respect to the Mortgage Loans, to the
extent allocable to interest, (ii) any Compensating Interest paid by the
Servicer with respect to the Mortgage Loans with respect to the related
Prepayment Period, (iii) the portion of any Replacement Amount paid with
respect to Replacement Mortgage Loans during the related Prepayment Period
allocable to interest and (iv) all Liquidation Proceeds, Insurance Proceeds
and other recoveries collected with respect to such Mortgage Loans during the
related Prepayment Period, to the extent allocable to interest, as reduced by
unreimbursed interest Monthly Advances and other amounts due the Servicer, to
the extent allocable to interest.
Latest Possible Maturity Date: The latest possible maturity date for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, which is
the date determined pursuant to Section 10.01(b).
Lehman: Lehman Brothers Inc. and its successors or assigns.
LIBOR: With respect to the first Accrual Period, the Initial LIBOR
Rate. With respect to each subsequent Accrual Period, the per annum rate
determined pursuant to Section 4.02 on the basis of London interbank offered
rate quotations for one-month Eurodollar deposits, as such quotations may
appear on the display designated as page "LIUSOIM" on the Bloomberg Financial
Markets Commodities News (or such other page as may replace such page on that
service for the purpose of displaying London interbank offered quotations of
major banks).
LIBOR Certificates: Any Class A1, Class M1, Class M2, Class M3,
Class B1 and Class B2 Certificate.
LIBOR Determination Date: The second London Business Day immediately
preceding the commencement of each Accrual Period other than the first Accrual
Period for any LIBOR Certificates.
Liquidated Loan: With respect to any Distribution Date, a Mortgage
Loan which, as of the close of business on the Business Day next preceding the
related Determination Date, (a) has been liquidated through deed in lieu of
foreclosure, sale in foreclosure, trustee's sale or other realization as
provided by applicable law of real property subject to the related Mortgage
and any security agreements or (b) with respect to which payment under related
private mortgage insurance or hazard insurance and/or from any public or
governmental authority on account of a taking or condemnation of any such
property has been received; provided, however, that any REO Property shall not
be treated as a Liquidated Loan until such property has been finally
liquidated.
Liquidation Expenses: Customary and reasonable "out of pocket"
expenses incurred by the Servicer (or the related Sub-Servicer) in connection
with the liquidation of any defaulted Mortgage Loan and not recovered by the
Servicer (or the related Sub-Servicer) under a Primary Mortgage Insurance
Policy for reasons other than the Servicer's failure to comply with Section
3.10 hereof, such expenses including, without limitation, legal fees and
expenses, any unreimbursed amount expended by the Servicer pursuant to Section
3.11 hereof respecting the related Mortgage to the extent not previously
reimbursed under any hazard insurance policy for reasons other than the
Servicer's failure to comply with Section 3.11 hereof and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration or preservation.
Liquidation Proceeds: Amounts other than Insurance Proceeds received
in connection with the liquidation of a defaulted Mortgage Loan, whether
through trustee's sale, foreclosure sale or otherwise or amounts received in
connection with any condemnation or partial release of a Mortgaged Property.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the 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 or, in the case of a
Replacement Mortgage Loan, the appraised value of the related Mortgaged
Property as of the date of its origination.
London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Lower Tier Interest: As described in the Preliminary Statement.
Lower Tier Regular Interest: As described in the Preliminary
Statement.
M1 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, the amount, if any, by which (x) the
sum of (i) the aggregate Certificate Principal Amount of the Class A1
Certificates and the Component Principal Amount of the A2-1 Component after
giving effect to distributions on such Distribution Date and (ii) the Class
Principal Amount of the Class M1 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 94.00% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) the initial Class Principal Amount of the Class B3 Certificates.
M2 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, the amount, if any, by which (x) the
sum of (i) the aggregate Certificate Principal Amount of the Class A1 and
Class M1 Certificates and the Component Principal Amount of the A2-1
Component, in each case after giving effect to distributions on such
Distribution Date and (ii) the Class Principal Amount of the Class M2
Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of 96.50% (i) and (ii) the Aggregate Loan Balance
for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) the initial
Class Principal Amount of the Class B3 Certificates.
M3 Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date as long as a Trigger Event has not occurred
with respect to such Distribution Date, the amount, if any, by which (x) the
sum of (i) the aggregate Certificate Principal Amount of the Class A1, Class
A2, Class M1 and Class M2 Certificates and the Component Principal Amount of
the A2-1 Component, in each case after giving effect to distribution on such
Distribution Date and (ii) the Class Principal Amount of the Class M3
Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 97.50% and (ii) the Aggregate Loan Balance
for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) the initial
Class Principal Amount of the Class B3 Certificates.
Monthly Advance: The aggregate of the advances made by or on behalf
of the Servicer with respect to any Distribution Date pursuant to Section 5.04
hereof.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Moody's Investors Service, Inc. or any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on a fee simple or leasehold estate in real property securing a
Mortgage Note.
Mortgage File: For each Mortgage Loan, the Trustee Mortgage File and
the Servicer Mortgage File.
Mortgage Loan: Each of the mortgage loans transferred and assigned
to the Trustee pursuant to the provisions hereof as from time to time are held
as a part of the Trust Fund, evidenced by a Mortgage Note and secured by a
Mortgage, the mortgage loans so held being identified in the Mortgage Loan
Schedule, as amended from time to time.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated as of March 1, 2000, by and among the Depositor, Lehman and
the Seller, pursuant to which the Depositor purchased the Mortgage Loans from
the Seller.
Mortgage Loan Repurchase Price: The price, calculated as set forth
in Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to an Optional Termination of the Trust Fund.
Mortgage Loan Schedule: The list of Mortgage Loans transferred to
the Trustee as part of the Trust Fund for the Certificates and from time to
time subject to this Agreement (as from time to time amended by the Servicer
to reflect the addition of Replacement Mortgage Loans and the deletion of
Deleted Mortgage Loans pursuant to the provisions of this Agreement), attached
hereto as Exhibit E, setting forth the following information with respect to
each Mortgage Loan:
(i) the loan number;
(ii) the city, state and zip code for each Mortgaged Property;
(iii) the original term to maturity;
(iv) the remaining term to maturity as of the Cut-off Date;
(v) the original principal balance;
(vi) the Scheduled Principal Balance as of the Cut-off Date;
(vii) the Mortgage Rate;
(viii) the Servicing Fee Rate;
(ix) the first Due Date;
(x) the Monthly Payment in effect as of the Cut-off Date;
(xi) the Loan-to-Value Ratio at origination;
(xii) the Appraised Value of the Mortgaged Property;
(xiii) a code indicating whether the Mortgaged Property is either
(a) a detached single-family dwelling or a de minimis planned unit
development, (b) a condominium unit or a dwelling in a planned unit
development, or (c) a two- to four-family residential property;
(xiv) a code indicating whether the Mortgaged Property at the time
of origination was represented to be owner-occupied;
(xv) a code indicating whether the Mortgage Loan is a Subsequent
Advance Mortgage Loan; and
(xvi) the purpose for which the financing was made.
Such schedule shall also set forth the total of the amounts
described under (vi) above for all of the Mortgage Loans. Such schedule may be
in the form of more than one list collectively setting forth all of the
information required and shall also be in a computer-readable format
acceptable to the Trustee.
Mortgage Note: The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan, including a lost note
affidavit with a copy of the related note.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note,
which is set forth in the related Mortgage Note.
Mortgaged Property: The underlying property securing a Mortgage
Loan.
Mortgagor: Each obligor on a Mortgage Note.
Mortgagor Prepayments: Prepayments in Full or Curtailments.
Negative Amortization Limit: On any date of determination, with
respect to a Mortgage Loan, the ratio of the unpaid principal balance of such
Mortgage Loan to the original principal amount of such Mortgage Loan.
Net Excess Interest: With respect to any Distribution Date and the
Class A2 Certificates, the excess of Aggregate Scheduled Collateral Interest
over the sum of (i) the Servicing Fee, (ii) the Trustee Fee and (iii)
Aggregate Current Interest on the Certificates (other than the A2-2 Component
of the Class A2 Certificates), in each case for such Distribution Date
Net Excess Spread: With respect to any Distribution Date, (A) the
fraction, expressed as a percentage, the numerator of which is equal to the
product of (i) the amount, if any, by which (a) the Interest Remittance Amount
for such Distribution Date (as reduced by the Trustee Fee for such
Distribution Date) exceeds (b) the Current Interest payable with respect to
the Certificates (other than the Class A2 Certificates) for such date and (ii)
twelve, and the denominator of which is the Aggregate Loan Balance for such
Distribution Date, multiplied by (B) a fraction, the numerator of which is
thirty and the denominator of which is the actual number of days in the
immediately preceding calendar month.
Net Funds Cap: With respect to any Distribution Date, the product of
(A) the fraction, expressed as a percentage, the numerator of which is the
product of (i) the Optimal Interest Remittance Amount for such date and (ii)
12, and the denominator of which is the Aggregate Loan Balance for the
immediately preceding Distribution Date, and (B) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
immediately preceding calendar month.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage
Loan, the related Liquidation Proceeds net of (i) Liquidation Expenses and
(ii) any unreimbursed Monthly Advances, if any, received and retained in
connection with the liquidation of such Mortgage Loan.
Net Mortgage Rate: As to each Mortgage Loan, a rate per annum equal
to the Mortgage Rate minus the Servicing Fee Rate and the Trustee Fee Rate.
Net Prepayment Interest Shortfall: As to any Distribution Date and
any Mortgage Loan (other than a Mortgage Loan secured by an REO Property) that
was the subject of a Principal Prepayment during the related Prepayment Period
by the Mortgagor, an amount equal to the excess of (a) one month's interest at
the Mortgage Rate on the Principal Balance of such Mortgage Loan before taking
into account such Principal Prepayment over (b) the sum of (i) the amount of
interest paid by the Mortgagor for such Prepayment Period to the date of such
Principal Prepayment and (ii) the Compensating Interest payable by the
Servicer on such Distribution Date.
Non-permitted Foreign Holder: As defined in Section 6.02(g).
Nonrecoverable Advance: The portion of any Monthly Advance or any
other advance previously made or proposed to be made by the Servicer that, in
the good faith judgment of the Servicer, will not or, in the case of a current
delinquency, would not be, ultimately recoverable by the Servicer from
Insurance Proceeds or Liquidation Proceeds (net of Liquidation Expenses) with
respect to the related Mortgage Loan.
Non-U.S. Person: Any Person other than a U.S. Person.
Offering Documents: Any prospectus (including any prospectus
supplement) or private placement memorandum relating to the offering and sale
of the Certificates.
Officers' Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman of the Board, the President, a Vice Chair, a Group
President, an Executive Vice President, a Senior Executive Vice President,
Senior Vice President, a Vice President, or other authorized officer, and by
the Treasurer, the Secretary, or one of the Assistant Vice Presidents,
Assistant Treasurers or Assistant Secretaries of the Depositor, the Seller,
the Servicer or the Trustee, as the case may be, and delivered to the
Depositor, the Seller, the Servicer or the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Servicer, reasonably acceptable to the Trustee. With
respect to any opinion dealing with the definition of Eligible Account in this
Article I, Sections 2.04 or 7.04 hereof or with the qualification of a REMIC
or compliance with the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor and the Servicer, (ii) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either of them and (iii) not be connected with the Depositor or the Servicer
as an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
Optimal Interest Remittance Amount: With respect to each
Distribution Date, the product of (1)(x) the weighted average of the Net
Mortgage Rates of the Mortgage Loans as of the first day of the related Due
Period, divided by (y) twelve, and (2) the Aggregate Loan Balance for the
immediately preceding Distribution Date.
Optional Termination: The purchase of the Mortgage Loans pursuant to
Section 10.01(a).
Optional Termination Date: The date fixed by the Servicer for the
purchase of the Mortgage Loans pursuant to Section 10.01.
Outstanding Mortgage Loan: As to any date of determination, a
Mortgage Loan (including an REO Property) which was not the subject of a
Principal Prepayment in Full, Cash Liquidation or REO Disposition and which
was not purchased, deleted or substituted for prior to such date of
determination pursuant to Section 2.02 or 2.04.
Participant: A broker, dealer, bank, other financial institution or
other Person for whom DTC effects book-entry transfers and pledges of
securities deposited with DTC.
Payahead: With respect to any Mortgage Loan and any Due Date
therefor, any Monthly Payment received by the Servicer during any Due Period
in addition to the Monthly Payment due on such Due Date, intended by the
related Mortgagor to be applied on a subsequent Due Date.
Percentage Interest: The percentage interest (which may be expressed
as a fraction) evidenced by any Certificate, which (a) in the case of each
Class of the Class A1, Class A2, Class M1, Class M2, Class M3, Class B1, Class
B2 and Class B3 Certificates, is equal to a fraction, the numerator of which
is the initial Certificate Principal Amount of such Certificate, and the
denominator of which is equal to the initial Class Principal Amount of all
Certificates of the same Class and (b) in the case of the Class R
Certificates, shall be 100%.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or government, or any agency or political
subdivision thereof.
Placement Agent: Lehman Brothers Inc.
Plan: Any Person which is an employee benefit plan subject to ERISA
or a plan subject to section 4975 of the Code.
Plan Asset Regulations: The Department of Labor regulations set
forth in 29 C.F.R. 2510.3-101.
Prepayment Period: With respect to any Distribution Date, the
calendar month prior to the month in which such Distribution Date occurs.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
guaranty insurance with respect to the Mortgage Loans or any replacement
policy therefor.
Principal Prepayment: Any Mortgagor payment or other recovery of
principal on a Mortgage Loan, including a recovery that takes the form of
Liquidation Proceeds or Insurance Proceeds, that is received in advance of its
scheduled Due Date other than a Payahead.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the Scheduled Principal Balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the sum of (i) all principal collected (other than Payaheads) or advanced in
respect of Monthly Payments on the Mortgage Loans during the related Due
Period, (ii) all Principal Prepayments in Full or Curtailments received during
the related Prepayment Period, (iii) the outstanding principal balance of each
Mortgage Loan that was purchased from the Trust Fund during the related
Prepayment Period, (iv) the portion of any Replacement Amount paid during the
related Prepayment Period allocable to principal, (v) all Net Liquidation
Proceeds, Insurance Proceeds and other recoveries collected with respect to
such Mortgage Loans during the related Prepayment Period, to the extent
allocable to principal, as reduced, in each case to the extent applicable, by
unreimbursed Monthly Advances and other amounts due to the Servicer or the
Trustee, to the extent allocable to principal, and (vi) any amounts received
by the Trustee from the Seller or Servicer for deposit to the Certificate
Account pursuant to Section 7.01(e).
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller or Servicer pursuant to Section 2.01, 2.02, 2.04 or
3.12 the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan
on the date of such purchase, (ii) accrued and unpaid interest to the next Due
Date on the Mortgage Loan at a rate equal to the Net Mortgage Rate and (iii)
the amount of any unreimbursed Monthly Advances and other advances made by the
Servicer with respect to such Mortgage Loan and reimbursable to the Servicer
hereunder; provided, however, that if the Servicer shall so choose, the
Purchase Price with respect to any Mortgage Loan purchased by the Servicer may
be net of advances that would otherwise be reimbursable to the Servicer and
the Servicer shall have no further entitlement to reimbursement for such
advances. With respect to any Mortgage Loan required or allowed to be
purchased, the Servicer or Seller, as applicable, shall deliver to the Trustee
an Officers' Certificate as to the calculation of the Purchase Price.
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 insurer in
connection with the insurance policy issued by such insurer, 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 issued by it and approved as an insurer by Freddie Mac or
Fannie Mae and whose claims-paying ability will not adversely affect the
rating on the Certificates.
Rating Agency: Each of Moody's, S&P and Fitch or any successor
thereto.
Realized Loss: An amount determined by the Servicer and evidenced by
an Officers' Certificate delivered to the Trustee, in connection with any
Mortgage Loan equal to (a) with respect to any Liquidated Loan, the excess of
the principal balance of such Liquidated Loan plus interest thereon at a rate
equal to the applicable Net Mortgage Rate from the Due Date as to which
interest was last paid up to the Due Date next succeeding such liquidation
over proceeds, if any, received in connection with such liquidation, after
application of all withdrawals permitted to be made by the Servicer from the
related Custodial Account with respect to such Mortgage Loan, (b) with respect
to any Mortgage Loan which has become the subject of a Deficient Valuation,
the excess of the principal balance of the Mortgage Loan over the principal
amount as reduced in connection with the proceedings resulting in the
Deficient Valuation, (c) with respect to any Mortgage Loan which has become
the subject of a Debt Service Reduction, the present value of all monthly Debt
Service Reductions on such Mortgage Loan, assuming that the Mortgagor pays
each Monthly Payment on the applicable Due Date and that no Principal
Prepayments are received with respect to such Mortgage Loan, discounted
monthly at the applicable Mortgage Rate or (d) the amount of any reduction by
the Servicer to the principal balance of such Mortgage Loan pursuant to
Section 3.01(c) hereof. In determining whether a Realized Loss is a Realized
Loss of principal, Liquidation Proceeds shall be allocated, first, to payment
of expenses related to such Liquidated Mortgage Loan, then to accrued unpaid
interest and finally to reduce the principal balance of the Mortgage Loan.
Record Date: With respect to the LIBOR Certificates and any
Distribution Date, the close of business on the Business Day immediately
preceding such Distribution Date. With respect to any Distribution Date and
the A2-2 Component and the Class B3 Certificate, the close of business on the
last Business Day of the month preceding the month in which the applicable
Distribution Date occurs, except in the case of the first Distribution Date,
the Record Date shall be the Settlement Date.
Registered Certificates: The Class A1, Class A2, Class M1, Class M2
and Class M3 Certificates.
Reference Banks: As defined in Section 4.02(c).
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Shortfalls: With respect to any Distribution Date and any
Mortgage Loan, the amount of any interest that is not collectible from the
Mortgagor during the related Due Period pursuant to the Relief Act or similar
legislation or regulations as in effect from time to time.
REMIC: A "real estate mortgage investment conduit", within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to REMICs, which appear at Section 860A through 860G of the Subchapter M of
Chapter 1 of the Code and related provisions, and regulations (including
proposed regulations, rulings and administrative pronouncements) promulgated
thereunder, as the foregoing may be in effect from time to time.
REO Acquisition: The acquisition by the Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.13.
REO Disposition: As to any REO Property, a determination by the
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds,
REO Proceeds and other payments and recoveries (including proceeds of a final
sale) which the Servicer expects to be finally recoverable from the sale or
other disposition of the REO Property.
REO Property: Any Mortgaged Property acquired by or in the name of
the Trustee for the benefit of the Certificateholders in foreclosure or by
deed-in-lieu of foreclosure or otherwise treated as having been so acquired
pursuant to the REMIC Provisions.
REO Proceeds: Proceeds, net of expenses, received in respect of any
REO Property (including, without limitation, proceeds from the rental of the
related Mortgaged Property).
Replacement Amount: As defined in the definition of Replacement
Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan substituted by the
Servicer or Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officers' Certificate delivered to the
Trustee, (i) have an outstanding Scheduled Principal Balance, after deduction
of the principal portion of the Monthly Payment due in the month of
substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate Scheduled Principal Balance, after
such deduction), not less than the Scheduled Principal Balance of the Deleted
Mortgage Loan (the amount of any shortage, the "Replacement Amount") to be
deposited by the Seller in the Certificate Account in the month of
substitution as set forth in Section 2.04 of this Agreement and shall be
treated as a Principal Prepayment thereunder); (ii) at the time of
substitution have a Net Mortgage Rate equal to or exceeding the Net Mortgage
Rate of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher
than the Loan-to-Value Ratio of the Deleted Mortgage Loan; (iv) have a
remaining term to maturity no greater than (and not more than one year less
than) the Deleted Mortgage Loan; (v) be of the same or better credit quality
classification as that of the Deleted Mortgage Loan; (vi) comply with each
representation and warranty relating to the Mortgage Loans set forth in
Section 2.04 hereof; and (vi) at the time of substitution have not been
delinquent for a period of more than 30 days or more than once in the twelve
months immediately preceding such date of substitution. In the event that
either one mortgage loan is substituted for more than one Deleted Mortgage
Loan or more than one mortgage loan is substituted for one or more Deleted
Mortgage Loans, then (a) the Scheduled Principal Balance referred to in clause
(i) above shall be determined in the aggregate, (b) the rate referred to in
clause (ii) above shall be determined on a loan-by-loan basis and (c) the
Loan-to-Value Ratio referred to in clause (iii) and the remaining term to
maturity referred to in clause (iv) above shall be determined on a weighted
average basis; provided, further, that the final scheduled maturity date of
any Replacement Mortgage Loan shall not exceed the latest Scheduled Final
Distribution Date of any Class of Certificates. Whenever a Replacement
Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to this
Agreement, the party effecting such substitution shall certify such
qualification in writing to the Trustee.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement in respect of such Mortgage Loan, including each standard
hazard and, if applicable, flood insurance policy.
Required Reserve Fund Deposit: With respect to any Distribution
Date, the amount, if any, by which the applicable Reserve Fund Requirement
exceeds the balance on deposit in the Basis Risk Reserve Fund immediately
prior to such Distribution Date.
Reserve Fund Requirement: With respect to any Distribution Date on
which the Net Excess Spread is less than 0.25%, the product of 1.00% and the
Aggregate Loan Balance. With respect to any Distribution Date on which the Net
Excess Spread is equal to or greater than 0.25%, $5,000.
Reserve Interest Rate: As defined in Section 4.02.
Residual Certificate: The Class R Certificate.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and 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.
Restricted Certificate: Any Class A2, B1, Class B2, Class B3 or
Class R Certificate.
Rolling Three Month Delinquency Rate: With respect to any
Distribution Date, the fraction, expressed as a percentage, equal to the
average of the Delinquency Rates for each of the three (or one or two, in the
case of the first and second Distribution Dates, respectively) immediately
preceding calendar months.
Rule 144A: Rule 144A promulgated under the rules of the 1933 Act, as
in effect from time to time.
S&P: Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc., or any successor in interest.
Scheduled Final Distribution Date: The Distribution Date occurring
in March 2030.
Scheduled Principal Balance: With respect to (i) any Mortgage Loan
as of any Distribution Date, the principal balance of such Mortgage Loan at
the close of business on the Cut-off Date, after giving effect to principal
payments due on or before the Cut-off Date, whether or not received, less an
amount equal to principal payments due after the Cut-off Date and on or before
the Due Date in the related Due Period, whether or not received from the
Mortgagor or advanced by the Servicer, and all amounts allocable to
unscheduled principal payments (including Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation proceeds, in each case to the
extent identified and applied prior to or during the related Prepayment
Period) and (ii) any REO Property as of any Distribution Date, the Scheduled
Principal Balance of the related Mortgage Loan on the Due Date immediately
preceding the date of acquisition of such REO Property by or on behalf of the
Trustee (reduced by any amount applied as a reduction of principal on the
Mortgage Loan). With respect to any Mortgage Loan and the Cut-off Date, as
specified in the Mortgage Loan Schedule.
Seller: Washington Mutual Bank, FA or its successor in interest.
Seller's Retained Interest: The Seller's obligation to fund any
additional advances made to the Mortgagor of any Subsequent Advance Mortgage
Loan on or after the Cut-off Date and the Seller's right to payment by the
Mortgagor of the principal and interest relating to any such additional
advances.
Senior Certificate: Any Class A1 or Class A2 Certificate.
Senior Enhancement Percentage: With respect to any Distribution
Date, the fraction, expressed as a percentage, the numerator of which is the
sum of the aggregate Certificate Principal Amount of the Class M1, Class M2,
Class M3, Class B1, Class B2 and Class B3 Certificates and the denominator of
which is the Aggregate Loan Balance for such Distribution Date.
Senior Principal Distribution Amount: Prior to the Stepdown Date or
if a Trigger Event has occurred with respect to such Distribution Date, an
amount equal to 100% of the Principal Remittance Amount and on or after the
Stepdown Date (as long as a Trigger Event has not occurred for such date), the
amount, if any, by which (x) the sum of Certificate Principal Amount of the
Class A1 Certificates and the Component Principal Amount of the A2-1 Component
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 91.00% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) the initial Class Principal
Amount of the Class B3 Certificates.
Servicer: Washington Mutual Bank, FA or any successor under the
terms of this Agreement.
Servicer Advance Date: As defined in Section 5.07(a) hereof.
Servicer Mortgage File: All documents pertaining to a Mortgage Loan
not required to be included in the Trustee Mortgage File and held by the
Servicer or any Sub-Servicer.
Servicing Fee: As to any Distribution Date and each Mortgage Loan,
an amount equal to the product of the Servicing Fee Rate and the Scheduled
Principal Balance of such Mortgage Loan as of the first day of the Due Period.
Servicing Fee Rate: For each Mortgage Loan, 0.375% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished to the Trustee on the
Closing Date by the Servicer pursuant to this Agreement, as such list may from
time to time be amended.
Settlement Date: April 12, 2000.
Stepdown Date: The later to occur of (x) the Distribution Date in
April 2003 and (y) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose after giving effect to payments or
other recoveries in respect of the Mortgage Loans during the related Due
Period but before giving effect to distributions on the Certificates on such
Distribution Date) is greater than or equal to 9.00%.
Subsequent Advance Mortgage Loan: A Mortgage Loan under which the
Seller has made the commitment to make one or more additional advances to the
related Mortgagor subsequent to the origination date of such Mortgage Loan
secured by the related Mortgage.
Sub-Servicer: Any other entity with respect to any Mortgage Loan
under any Sub-Servicing Agreement, either currently or in the future,
applicable to such Mortgage Loan and any successors and assigns under such
Sub-Servicing Agreement.
Sub-Servicing Agreement: Any servicing agreement between the
Servicer and a Sub-Servicer pursuant to which the Servicer delegates any of
its servicing responsibilities with respect to any of the Mortgage Loans.
Total Distribution Amount: With respect to any Distribution Date,
the sum of the Interest Remittance Amount and Principal Remittance Amount for
such date.
Trigger Event: A Trigger Event will have occurred with respect to
any Distribution Date if the Rolling Three Month Delinquency Rate as of the
last day of the immediately preceding calendar month equals or exceeds 50% of
the Senior Enhancement Percentage.
Trust: The Trust created pursuant to this Agreement, known as the
"Washington Mutual Mortgage Loan Trust."
Trust Fund: The corpus of the Trust Fund created by this Agreement
consisting of (a) the Mortgage Loans listed in the Mortgage Loan Schedule,
including all interest and principal received or receivable by the Depositor
on or with respect to the Mortgage Loans after the Cut-off Date, but not
including (i) payments of principal and interest due and payable on the
Mortgage Loans on or before the Cut-off Date, and (ii) the Seller's Retained
Interest, together with the Mortgage Files relating to the Mortgage Loans, (b)
REO Property, (c) the Custodial Account, the Certificate Account, the Basis
Risk Reserve Fund, and all amounts deposited therein pursuant to the
applicable provisions of this Agreement, (d) any insurance policies with
respect to the Mortgage Loans, (e) any REO Property, (f) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid property and (g) the Depositor's rights under the Mortgage Loan
Purchase Agreement.
Trustee: Bankers Trust Company of California, N.A., a national
banking association, not in its individual capacity, but solely in its
capacity as trustee for the benefit of the Certificateholders under this
Agreement, and any successor thereto, as provided herein.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of the Trustee Fee Rate and the aggregate Scheduled Principal Balance
of the related Mortgage Loans as of the first day of the related Due Period.
Trustee Fee Rate: 0.001% per annum.
Trustee Mortgage File: The mortgage documents listed in Section
2.01(b)(i)-(v) hereof pertaining to a particular Mortgage Loan and any
additional documents required to be added to the Trustee Mortgage File
pursuant to this Agreement.
United States Regulations: 31 C.F.R. Part 357; 12 C.F.R. Part 615,
Subpart O; 12 C.F.R. Part 912; 12 C.F.R. Part 1511; 24 C.F.R. Part 81; 31
C.F.R. Part 354; and 18 C.F.R. Part 1314.
United States Securities Entitlement: A "Security Entitlement" as
defined in a United States Regulation.
Unpaid Basis Risk Shortfall: With respect to any Distribution Date
and any Class of LIBOR Certificates, the aggregate of all Basis Risk
Shortfalls with respect to such Class remaining unpaid from previous
Distribution Dates, plus interest accrued thereon at the applicable
Certificate Interest Rate (calculated without giving effect to the applicable
Net Funds Cap).
Upper Tier Interest: As described in the Preliminary Statement.
Upper Tier Regular Interest: As described in the Preliminary
Statement.
U.S. Person: Shall mean (i) a citizen or resident of the
United States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia; (iii) a partnership (or entity treated as a partnership
for tax purposes) organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia (unless provided otherwise by future Treasury
regulations); (iv) an estate whose income is includible in gross income for
United States income tax purposes regardless of its source; or (v) a trust, if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more U.S. Persons have authority to
control all substantial decisions of the trust. Notwithstanding the last
clause of the preceding sentence, to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
U.S. Persons prior to such date, may elect to continue to be U.S. Persons.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
99% of all Voting Interests shall be allocated among the Class A1, Class A2,
Class M1, Class M2, Class M3, Class B1, Class B2 and Class B3 and 1% shall be
allocated to the Class R Certificates. The portion of such 99% Voting
Interests allocated among the Class A1, Class A2, Class M1, Class M2, Class
M3, Class B1, Class B2 and Class B3 Certificates shall be based on the
fraction, expressed as a percentage, the numerator of which is the aggregate
Class Principal Amount (or Component Principal Amount) then outstanding of
such Class and the denominator of which is the Aggregate Loan Balance. Voting
Interests shall be allocated among the Certificates within each such Class in
proportion to their outstanding Certificate Principal Amounts or Percentage
Interest (in the case of the Class R Certificates).
Washington Mutual: Washington Mutual Bank, FA
SECTION 1.01. Calculations Respecting Mortgage Loans.
Calculations required to be made pursuant to this Agreement with
respect to any Mortgage Loan in the Trust Fund shall be made based upon
current information as to the terms of the Mortgage Loans and reports of
payments received from the Mortgagor on such Mortgage Loans and payments to be
made to the Trustee as supplied to the Trustee by the Servicer. The Trustee
shall not be required to recompute, verify or recalculate the information
supplied to it by the Servicer.
SECTION 1.02. Calculations Respecting Accrued Interest.
Accrued interest, if any, on any LIBOR Certificate shall be
calculated based upon a 360-day year and the actual number of days in each
Accrual Period. Accrued interest, if any, on the A2-2 Component of the Class
A2 Certificate or Class B3 Certificate shall be calculated based upon a
360-day year consisting of twelve 30-day months.
ARTICLE II
CONVEYANCE OF TRUST FUND;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Trust Fund.
(a) Concurrently with the execution and delivery of this Agreement,
the Depositor does hereby transfer, assign, set over, deposit with and
otherwise convey to the Trustee, without recourse, in trust, all the right,
title and interest of the Depositor in and to the Mortgage Loans. Such
conveyance includes, without limitation, the right to all distributions of
principal and interest due with respect to the Mortgage Loans after the
Cut-off Date (other than the Seller's Retained Interest), together with all of
the Depositor's right, title and interest in and to the Certificate Account
and all amounts from time to time credited to and the proceeds of the
Custodial Account, the Certificate Account, the Basis Risk Reserve Fund, any
REO Property and the proceeds thereof, the Depositor's rights under any
Insurance Proceeds related to the Mortgage Loans, and the Depositor's security
interest in any collateral pledged to secure the Mortgage Loans, including the
Mortgaged Properties, to have and to hold, in trust; and the Trustee declares
that, subject to the review provided for herein, it has received and shall
hold the Trust Fund, as trustee, in trust, for the benefit and use of the
Holders of the Certificates and for the purposes and subject to the terms and
conditions set forth in this Agreement, and, concurrently with such receipt,
has caused to be executed, authenticated and delivered to or upon the order of
the Depositor, in exchange for the Trust Fund, Certificates in the authorized
denominations evidencing the entire ownership of the Trust Fund.
Concurrently with the execution and delivery of this agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest
under the Mortgage Loan Purchase Agreement to the Trustee. The Trustee hereby
accepts such assignment, and shall be entitled to exercise all such rights, of
the Depositor under the Mortgage Loan Purchase Agreement as if, for such
purpose, it were the Depositor.
(b) In connection with any such transfer and assignment, the Seller
does hereby deliver to, and deposit with, the Trustee or its agents, the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the Mortgage Note, endorsed, in blank by facsimile signature
(which such endorsement may be pursuant to the use of a note allonge in
the form attached as Exhibit K), with all intervening endorsements
showing a complete chain of endorsement from the originator to the last
endorser (or an original lost note affidavit from the Seller stating that
the Mortgage Note was lost, misplaced or destroyed, with respect to such
Mortgage Loans identified in the Trustee's Certification referenced in
Section 2.02), and if the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has been signed on
behalf of the Mortgagor by another person, the original power of attorney
or other instrument that authorized and empowered such person to sign, or
a copy of the original power of attorney or other instrument;
(ii) the original Mortgage, as recorded, with evidence of recording
indicated thereon establishing the Seller as mortgagee thereof;
(iii) an original assignment or assignments of Mortgage (other than
an Assignment) showing an unbroken chain of title from the originator to
the Seller with evidence of recording indicated thereon or a duplicate
original of the copy thereof certified by the applicable recording
office;
(iv) the original copy of each assumption, modification, written
assurance or substitution agreement, if any, with respect to such
Mortgage Loan, as identified on the Mortgage Loan Schedule; and
(v) an Assignment.
Notwithstanding the foregoing, in the event that in connection with
any Mortgage Loan the Seller cannot deliver an original recorded counterpart
of any of the documents required to be delivered pursuant to clauses (ii) or
(iii) above with evidence of recording thereon concurrently with the execution
and delivery hereof, the Seller shall deliver to the Trustee a duplicate
original or true copy of such document certified by the Seller or the
applicable public recording office to be a true and complete duplicate
original or copy of the original thereof submitted for recording, or a copy of
the Mortgage certified by a title insurance or escrow company or companies,
evidencing that such Mortgage or assignment of Mortgage has been delivered to
the appropriate public recording office for recordation. In the event that the
Seller cannot deliver a duplicate original or true copy certified as stated
above of such document required to be delivered pursuant to clauses (ii) or
(iii) above, within 90 days of the Closing Date, the Seller shall purchase the
related Mortgage Loan at the Purchase Price therefor or replace the Mortgage
Loan with a Replacement Mortgage Loan if such substitution occurs within the
time periods for substitution set forth in Section 2.04.
(c) The Seller shall promptly deliver to the Trustee (1) the
original recorded documents referred to in clauses (ii) and (iii) above with
evidence of recording indicated thereon or a photocopy thereof certified by
the appropriate county recorder's office to be a true and complete copy of the
original thereof, upon receipt thereof from the public recording office, and
(2) upon discovery of any defect or omission in the deliveries of any of items
(ii) through (iv) in subsection (b) above with respect to any Mortgage Loan, a
correct and complete document or instrument meeting the requirements of such
item, but in no event shall any such delivery be made later than 90 days
following the Closing Date (unless, in the case of the foregoing clause (1),
such document has not been returned from the relevant recording office at such
time, in which case the Servicer shall make such delivery within 270 days of
the Closing Date; provided, however, that such 270 day period shall be
extended to 360 days upon presentation of an officer's certificate of the
Seller to the effect that such document has not yet been returned from the
relevant recording office, and shall be extended for additional thirty-day
periods). In the event the Seller cannot deliver such original document with
evidence of recording indicated thereon within the time period set forth in
the preceding sentence, the Seller shall purchase the related Mortgage Loan at
the Purchase Price therefor or replace the Mortgage Loan with a Replacement
Mortgage Loan if such substitution occurs within the time periods for
substitution set forth in Section 2.04.
From time to time the Seller or the Servicer may forward or cause to
be forwarded to the Trustee for the benefit of the Certificateholders
additional original documents evidencing an assumption or modification of a
Mortgage Loan.
(d) The Seller will promptly notify, in writing, the Depositor, the
Servicer and the Trustee of the occurrence of a Downgrade Event.
Within 60 days following the receipt of the notice of a Downgrade
Event, the Trustee shall (a) complete each endorsement referred to in clause
(i) of subsection (b) above and each Assignment referred to in (v) of
subsection (b) above by inserting "to the Trustee for the benefit of the
Holders of the Washington Mutual Mortgage Loan Trust Mortgage Pass-Through
Certificates, Series 2000-1" and (b) cause the Servicer to record (and the
Servicer hereby agrees to record), at the expense of the Servicer, in the
appropriate public office for real property records each original assignment
referred to in (v) above with respect to each Mortgaged Property, and the
Trustee shall release any such Assignment to the Servicer for such purpose.
The Servicer shall promptly deliver to the Trustee each original Assignment
with evidence of recording indicated thereon or a photocopy thereof certified
by the appropriate county recorder's office to be a true and complete copy of
the original thereof, upon receipt thereof from the public recording official.
If any Assignment is returned unrecorded to the Servicer because of any defect
therein, the Seller or the Servicer shall cure or correct such defect and
cause such Assignment to be recorded in accordance with this paragraph and if
such defect is not cured within 60 days the Seller shall purchase the Mortgage
Loan at the Purchase Price therefor or replace the Mortgage Loan with a
Replacement Mortgage Loan if such substitution occurs within the time periods
for substitution set forth in Sections 2.04.
SECTION 2.02. Acceptance by Trustee.
(a) The Trustee will hold the documents referred to in Section
2.01(b)(i)-(v) above and the other documents constituting a part of the
Trustee Mortgage Files delivered to it pursuant to Section 2.01 in trust for
the use and benefit of all present and future Certificateholders. Upon
execution and delivery of this Agreement, the Trustee shall deliver to the
Depositor, the Seller and the Servicer a certification (upon execution and
delivery of this Agreement, the "Initial Loan List Certification") in the form
set forth as Exhibit F-1 hereto to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule, a Mortgage File has been delivered to
the Trustee. The Trustee shall deliver to the Depositor, the Seller and the
Servicer a copy of such Initial Loan List Certification. If, in the course of
such review, the Trustee finds that a Mortgage File for any Mortgage Loan
listed on the Mortgage Loan Schedule has not been delivered to the Trustee,
the Trustee shall promptly notify the Seller, the Servicer and the Depositor
in writing, and request that the Seller correct or cure such defect. In the
event the Seller shall fail to deliver a Mortgage File reflected in the
Initial Loan List Certification within five days of such Initial Loan List
Certification, the Seller shall purchase the Mortgage Loan at the Purchase
Price therefor or replace the Mortgage Loan with a Replacement Mortgage Loan
if such substitution occurs within the time periods for substitution set forth
in Section 2.04(b). Within 30 days after the execution and delivery of this
Agreement, the Trustee shall ascertain whether all documents required to be
delivered to it pursuant to Section 2.01(b) hereof are in its possession, and
shall deliver to the Depositor, the Seller and the Servicer a certification
(within 30 days after execution and delivery of this Agreement, the "Initial
Certification" and within 90 days thereof, the "Final Certification",
respectively) in the forms set forth as Exhibits F-2 and F-3 hereto to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule:
(a) all documents required to be delivered to the Trustee pursuant to this
Agreement are in its possession, (b) such documents have been reviewed by it
and have not been mutilated, damaged, defaced, torn or otherwise physically
altered, and such documents relate to such Mortgage Loan and (c) each Mortgage
Note has been endorsed and each assignment of Mortgage has been delivered as
provided in Section 2.01(b) hereof. The Trustee shall deliver to the
Depositor, the Seller and the Servicer a copy of each of the Initial
Certification and the Final Certification. If, in the course of such review,
the Trustee finds any document or documents constituting a part of a Mortgage
File which do not meet the requirements of the foregoing clauses (a)-(c), the
Trustee shall promptly notify the Seller, the Servicer and the Depositor in
writing, and request that the Seller correct or cure such defect. In the event
the Seller shall fail to cure any document deficiency or defect reflected in
the Final Certification within 60 days of such Final Certification, or such
longer period of time as may be permitted in Section 2.01(c), it shall not be
the obligation of the Trustee hereunder to cure the same, and the Seller shall
purchase the Mortgage Loan at the Purchase Price therefor or replace the
Mortgage Loan with a Replacement Mortgage Loan if such substitution occurs
within the time periods for substitution set forth in Section 2.04.
(b) The Depositor agrees that at any time and from time to time upon
written request of the Trustee, the Depositor shall promptly and duly execute
and deliver any and all such further documents and assurances, and take such
further actions as the Trustee reasonably may request in order to obtain or
more fully vest the benefits of the assignment intended hereunder (as set
forth in Section 2.01 and in Section 2.04) and of the rights and powers herein
granted.
(c) The Trustee shall retain possession and custody of each Trustee
Mortgage File in accordance with and subject to the terms and conditions set
forth herein.
SECTION 2.03. Representations, Warranties and Covenants of the
Servicer and Seller.
Washington Mutual, as Seller and Servicer, hereby represents and
warrants to, and covenants with, the Depositor and the Trustee that, as of the
date hereof:
(i) Washington Mutual is a federally chartered savings association,
validly existing and in good standing under the laws of the United States
of America and is duly authorized and qualified to transact any and all
business contemplated by this Agreement in any state in which a Mortgaged
Property is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to ensure
the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;
(ii) Washington Mutual has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement, and has duly authorized by all necessary corporate action on
the part of Washington Mutual the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the Depositor and the Trustee,
constitutes a legal, valid and binding obligation of Washington Mutual,
enforceable against Washington Mutual in accordance with its terms,
except that (A) the enforceability thereof may be limited to bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (B) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to the
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(iii) the execution and delivery of this Agreement by Washington
Mutual, the servicing of the Mortgage Loans by Washington Mutual
hereunder, the consummation of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of Washington Mutual and will not
(A) result in a material breach of any term or provision of the charter
or bylaws of Washington Mutual or (B) materially conflict with, result in
a material breach, violation or acceleration of, or result in a material
default under, the terms of any other material agreement or instrument to
which Washington Mutual is a party or by which it may be bound, or any
statute, order or regulation applicable to Washington Mutual of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over Washington Mutual; and Washington Mutual is not a party
to, bound by, or in breach or violation of any material indenture or
other material agreement or instrument, or subject to or in violation of
any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects, (1) the ability of Washington
Mutual to perform its obligations under this Agreement or (2) the
business, operations, financial condition, properties or assets of the
Servicer taken as a whole;
(iv) Washington Mutual is, and will remain, subject to supervision
and examination by any state or federal authority as may be applicable
and will remain in good standing and qualified to do business where so
required by applicable law and is, and will remain an approved servicer
of conventional mortgage loans for Fannie Mae or Freddie Mac;
(v) no litigation is pending or threatened against Washington Mutual
that would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Washington Mutual to
service the Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vi) Washington Mutual will at all times comply in the performance
of its obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Required Insurance Policy;
(vii) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by Washington
Mutual pursuant to this Agreement will contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading;
(viii) except for permits and similar authorizations required under
the securities or "blue sky" laws, no consent, approval, authorization or
order of any court or governmental agency or body is required for the
execution, delivery and performance by Washington Mutual of, or
compliance by Washington Mutual with, this Agreement or the consummation
of the transactions contemplated hereby, or if any such consent,
approval, authorization or order is required, Washington Mutual has
obtained the same;
(ix) Washington Mutual will service the Mortgage Loans in accordance
with the standards set forth in this Agreement;
(x) this Agreement and all other documents related hereto to which
Washington Mutual is a party have been approved by the Washington
Mutual's board of directors, which approval is reflected in the minutes
of such board, and shall continuously from the time of each such
document's execution, be maintained as an official record of the
Washington Mutual; and
(xi) any advance made by the Seller to a Mortgagor on a Subsequent
Advance Mortgage Loan shall be evidenced by a separate promissory note
and secured by a separate mortgage, deed of trust or other instrument
creating a junior lien on the related Mortgage Property so that, in the
event of the foreclosure or other disposition of a Subsequent Advance
Mortgage Loan, the Net Liquidation Proceeds of such foreclosure sale or
other disposition shall first be applied to payment of that portion of
the outstanding principal balance of the Mortgage Loan (and any accrued
and unpaid interest thereon) included in the Trust Fund prior to any
payment of the Seller's Retained Interest in the indebtedness represented
by a subsequent advance.
SECTION 2.04. Representations, Warranties and Covenants of the Seller with
respect to the Mortgage Loans.
(a) The Seller hereby represents and warrants to, and covenants
with, the Depositor and the Trustee for the benefit of the Certificateholders
that, as to each Mortgage Loan, as of the Cut-off Date or such other date
specifically set forth herein, and with respect to representation (i) listed
below, as of the Closing Date:
(i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct.
(ii) 0.568% of the Mortgage Loans (by Scheduled Principal Balance)
are more than 30 days delinquent; not more than 1.075% of the Mortgage
Loans (by Scheduled Principal Balance) were 30 days delinquent more than
once in the past twelve months; Washington Mutual has not advanced funds
to, or induced, solicited or knowingly received any advance of funds from
a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required
by the Mortgage Loan.
(iii) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, insurance premiums, leasehold payments,
including assessments payable in future installments or other outstanding
charges affecting the related Mortgaged Property.
(iv) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded, if necessary to protect the
interests of the Trustee, and which are included in the Trustee Mortgage
File, the substance of which waiver, alteration or modification has been
approved by the primary mortgage guaranty insurer, if any, and by the
title insurer, to the extent required by the related policy and is
reflected on the Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement approved by the primary mortgage insurer, if any, and title
insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage File.
(v) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
and Mortgage, or the exercise of any right thereunder, render the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury and no such right of rescission, set-off, counterclaim or defense
has been asserted with respect thereto.
(vi) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located. All such insurance policies contain a
standard mortgagee clause naming the Servicer, its successors and assigns
as mortgagee and all premiums thereon have been paid. If upon origination
of the Mortgage Loan, the Mortgaged Property was in an area identified in
the Federal Register by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available)
a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect which
policy conforms to the requirements of Fannie Mae or Freddie Mac. The
Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at Mortgagor's cost and expense, and on the Mortgagor's failure
to do so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(vii) Any and all requirements of any federal, state or local law
including, without limitation, environmental, usury, truth in lending,
real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the Mortgage Loan and
the related Mortgaged Property have been complied with.
(viii) The Mortgage has not been satisfied, canceled or
subordinated, or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or
in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission.
(ix) The Mortgage is a valid, existing and enforceable first lien on
the Mortgaged Property, including all improvements on the Mortgaged
Property subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of the public
record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in lender's title
insurance policy delivered to the originator of the Mortgage Loan and
which do not adversely affect the Appraised Value of the Mortgaged
Property, and (C) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment,
value or marketability of the related Mortgaged Property. Any security
agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage establishes and creates a
valid, existing and enforceable first lien and first priority security
interest on the property described therein and the Seller has full right
to sell and assign the same to the Depositor. The Mortgaged Property was
not, as of the date of origination of the Mortgage Loan, subject to a
mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage.
(x) The Mortgage Note and the related Mortgage are genuine and each
is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, or reorganization.
(xi) All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage
have been duly and properly executed by such parties.
(xii) Except with respect to 4.605% (by Scheduled Principal Balance)
of Mortgage Loans constituting Subsequent Advance Mortgage Loans, the
proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder and any and all requirements
as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan
and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage.
(xiii) As of the Closing Date, the Mortgage Note and the Mortgage
are not assigned or pledged, and immediately prior to the sale of the
Mortgage Loan to the Depositor, the Seller was the sole owner of record
and holder thereof and with full right to transfer and sell the Mortgage
Loan to the Depositor free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest and with full right and
authority subject to no interest or participation of, or agreement with,
any other party, to sell and assign each Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement.
(xiv) The Seller or, if the Mortgage Loan was not originated by the
Seller, the originator is or was (or, during the period in which they
held and disposed of such interest, were) (A) in compliance with any and
all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) either (i) organized under the
laws of such state, or (ii) qualified to do business in such state, or
(iii) federal savings and loan associations or national banks having
principal offices in such state, or (iv) not doing business in such
state.
(xv) The Mortgage Loan is covered by an ALTA lender's title
insurance policy acceptable to Fannie Mae or Freddie Mac, issued by a
title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring (subject to the exceptions contained in (ix)(A) through (C)
above) the Seller, its successors and assigns as to the first priority
lien of the Mortgage in the original principal amount of the Mortgage
Loan. The original title policy (or a copy thereof sufficient to entitle
the insured to make a claim thereunder) and all riders thereto are in the
Servicer Mortgage File. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
The Seller is the sole insured of such lender's title insurance policy,
and such lender's title insurance policy is in full force and effect and
will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy.
(xvi) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and the Seller has not waived any
default, breach, violation or event of acceleration.
(xvii) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such lien) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or on
parity with, the lien of the related Mortgage.
(xviii) All improvements which were considered in determining the
Appraised Value of the related Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and
no improvements on adjoining properties encroach upon the Mortgaged
Property.
(xix) The Mortgage Loan was originated by the Seller or a subsidiary
of the Seller or was purchased by the Seller from a third party, each of
which was, at the time of origination, (A) a Fannie Mae-approved or
Freddie Mac-approved seller/servicer and (B) a HUD-approved mortgage
banker, or a savings and loan association, a savings bank, a commercial
bank or similar banking institution which is supervised and examined by a
federal or state authority. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in
connection with the Mortgage Loan. Each Mortgage Note has a Mortgage Rate
that is adjustable, based on the COFI Index, in the following manner:
Monthly Payments are due on the Due Date specified in the Mortgage Loan
Schedule. Following the first interest rate adjustment date, the Mortgage
Rate is subject to adjustment monthly on each interest rate adjustment
date to a new Mortgage Rate (rounded as provided in the related Mortgage
Note) equal to the Index (determined as of the date specified in the
related Mortgage Note) plus a fixed percentage as specified in the
Mortgage Loan Schedule, subject to a maximum lifetime interest rate and
minimum lifetime interest rate as specified in the Mortgage Loan
Schedule. The amount of each Monthly Payment is subject to adjustment on
the anniversary of the first Due Date and annually on the same date
thereafter, subject to the conditions that (i) the amount of a Monthly
Payment will not increase or decrease by an amount that is more or less
than 7.50% of the current Monthly Payment, (ii) on the fifth anniversary
of the first Due Date and on the same day every five years thereafter,
the Monthly Payment will be adjusted, without regard to the limitation in
clause (i), to fully amortize the then unpaid principal balance over the
remaining term to maturity and (iii) if a Negative Amortization Limit is
specified in the related Mortgage Note, in the event that, as a result of
Deferred Interest, the unpaid principal balance at any time would exceed
the Negative Amortization Limit, the Monthly Payment will be adjusted at
such time, without regard to the limitation in clause (i), to fully
amortize the then unpaid principal balance over the remaining term to
maturity. Any Deferred Interest will be added to the unpaid principal
balance of the Mortgage Note on each Due Date, unless the Mortgagor (to
the extent permitted in the Mortgage Note) elects to increase the amount
of the Monthly Payment to include the amount of Deferred Interest or make
a payment of the amount of Deferred Interest.
(xx) The origination practices used by the Seller and the collection
practices used by the Servicer with respect to each Mortgage Note and
Mortgage have been in all respects legal, proper, prudent and customary
in the mortgage origination and servicing business. With respect to
escrow deposits and escrow payments, if any, all such payments are in the
possession of, or under the control of, the Servicer and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made.
(xxi) The Mortgaged Property is free of damage and waste and there
is no proceeding pending for the total or partial condemnation thereof.
(xxii) The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security provided thereby, including, (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (B) otherwise by
judicial foreclosure. There is no other exemption available to the
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage. The
Mortgagor has not notified the Servicer and the Servicer has no knowledge
of any relief requested or allowed to the Mortgagor under the Relief Act.
(xxiii) The Mortgage Loan was underwritten generally in accordance
with the Seller's underwriting standards in effect at the time the
Mortgage Loan was originated.
(xxiv) The Mortgage Note is not secured by any collateral except the
lien of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to in (ix)
above.
(xxv) The Servicer Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage
Loan application by a qualified appraiser, duly appointed by the
originator of the Mortgage Loan, who had no interest, direct or indirect
in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of
the Mortgage Loan.
(xxvi) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the Depositor to
the trustee under the deed of trust, except, in connection with a
trustee's sale after default by the Mortgagor.
(xxvii) No Mortgage Loan (A) contains provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor or paid by any source other than the Mortgagor or
(B) contains any provision permitting a temporary "buydown" of the
related Mortgage Rate. No Mortgage Loan was a graduated payment mortgage
loan as of the date of its origination. No Mortgage Loan has a shared
appreciation or other contingent interest feature.
(xxviii) The Seller has no knowledge of any circumstances or
condition existing on the Cut-off Date with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that
as of the Cut-off Date causes the Mortgage Loan to be an unacceptable
investment, causes the Mortgage Loan to become delinquent, or adversely
affects the value of the Mortgage Loan.
(xxix) Each such Mortgage Loan with a Loan-to-Value Ratio at
origination in excess of 80% is and will be subject either to (x) a
Primary Mortgage Insurance Policy, issued by a Fannie Mae or Freddie Mac
approved insurer, which provided private mortgage insurance in an amount
meeting Fannie Mae and Freddie Mac requirements or (y) a higher interest
rate in lieu of obtaining private mortgage insurance. All provisions of
such Primary Mortgage Insurance Policy have been and are being complied
with, such policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage subject to any such Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain
such insurance and to pay all premiums and charges in connection
therewith.
(xxx) The Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the related Mortgaged
Property and, with respect to the use and occupancy of the same,
including but not limited to certificates of occupancy, had been made or
obtained from the appropriate authorities.
(xxxi) No defense against coverage under any private mortgage
insurance (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the
insured) exists arising out of actions, representations, errors,
omissions, negligence, or fraud of the Seller, and the Seller is not
aware of any fact that could reasonably lead the Seller to believe that
any such defense exists arising out of the actions, representations,
errors, omissions, negligence or fraud of the related Mortgagor or any
party involved in the application for such coverage.
(xxxii) The Assignment is in recordable form, is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located and includes all applicable recording information,
except where the related original Mortgage has been delivered for
recording to the appropriate public recording office but has not yet been
returned to the Seller.
(xxxiii) Any advances made to the Mortgagor prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured
by the Mortgage, and the secured principal amount, as consolidated, bears
a single interest rate and single repayment term. The lien of the
Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement
to the policy insuring the mortgagee's consolidated interest or by other
title evidence acceptable to Fannie Mae or Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the
Mortgage Loan.
(xxxiv) If the Mortgaged Property is a condominium unit or a planned
unit development (other than a de minimis planned unit development) such
condominium or planned unit development project meets Fannie Mae or
Freddie Mac eligibility requirements.
(xxxv) Each Mortgage is a "qualified mortgage" for purposes of the
REMIC Provisions.
(xxxvi) No fraud was committed by the originator of the Mortgage
Loan and the Seller is not aware of any fact that would reasonably lead
the Seller to believe that any Mortgagor had committed fraud in
connection with the origination of such Mortgage Loan.
(b) Upon the discovery by the Depositor, the Seller, the Servicer or
the Trustee (or upon notice thereof in writing from a Certificateholder) of a
breach or breaches of any of the representations and warranties of the Seller
made in Section 2.04(a) in respect of any Mortgage Loan, or any breach of a
representation or warranty of the Seller or Servicer set forth in Section 2.03
or any breach of representation or warranty of the Seller in Section 2 of the
Mortgage Loan Purchase Agreement, which breach or breaches, individually or in
the aggregate, materially and adversely affect the interests of the
Certificateholders, the party discovering such breach shall give prompt
written notice to the other parties. The Trustee shall promptly notify the
Seller and Servicer of such breach and request that the Seller or Servicer, as
the case may be, cure such breach within 60 days (or if such breach is not
capable of being cured within 60 days and provided the Seller or the Servicer,
as the case may be is diligently pursuing the cure thereof, within 120 days)
from the date of such notice, and if the Seller or Servicer does not cure such
breach in all material respects, the Seller or Servicer, as the case may be,
shall either (i) substitute a Replacement Mortgage Loan or Loans for the
related Mortgage Loan, which substitution must be made as specified in this
Section or (ii) purchase such Mortgage Loan held for the benefit of the
Certificateholders from the Trustee at the Purchase Price therefor.
The Seller or Servicer shall not have any right to substitute a
Replacement Mortgage Loan or Loans for the affected Mortgage Loan more than
three months after the Closing Date (or more than two years after the Closing
Date if the related Mortgage Loan is a "defective obligation" within the
meaning of Section 860G(a)(4)(B)(ii) of the Code), and any substitution must
be accompanied by an Officers' Certificate delivered to the Trustee,
certifying that such Replacement Mortgage Loan conforms to the requirements of
this Agreement, and by an Opinion of Counsel to the effect that such
substitution will not cause the Trust Fund to fail to qualify as a REMIC and
will not result in a prohibited transaction tax, which Opinion of Counsel
shall be paid for by the Seller or Servicer, as the case may be.
Notwithstanding the foregoing, if any such breach would cause a Mortgage Loan
to be other than a "qualified mortgage loan" as described in Section
860G(a)(3) of the Code, any substitution or purchase shall occur within 90
days of the discovery of the breach.
As to any Replacement Mortgage Loan or Loans, the Seller or Servicer
shall deliver to the Trustee or its agent for such Replacement Mortgage Loan
or Loans, the Mortgage Note, the Mortgage, and such other documents and
agreements as are required by Section 2.01(b), with the Mortgage Note (i)
endorsed in blank by facsimile signature if no Downgrade Event has occurred or
(ii) if a Downgrade Event has occurred, endorsed by facsimile signature to the
Trustee for the benefit of the Holders of the Washington Mutual Mortgage Loan
Trust Mortgage Pass-Through Certificates, Series 2000-1 (which endorsement, in
either case, may be in the form of a note allonge). As to any Replacement
Mortgage Loan or Loans, the Seller or Servicer shall deliver to the Trustee
the related Assignment (i) in blank in recordable form or (ii) if a Downgrade
Event has occurred, assigned to the Trustee for the benefit of the Holders of
the Washington Mutual Mortgage Loan Trust Mortgage Pass-Through Certificates,
Series 2000-1. No substitution will be made in any calendar month after the
Determination Date for such month. Monthly Payments due with respect to
Replacement Mortgage Loans in the month of substitution shall not be part of
the Trust Fund and will be remitted by the Servicer to the Seller on the next
succeeding Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Monthly Payment due on such Deleted
Mortgage Loan for such month and thereafter the Seller or Servicer, as the
case may be, shall be entitled to retain all amounts received in respect of
such Deleted Mortgage Loan.
Upon such substitution, the Servicer shall amend or cause to be
amended the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans
and shall deliver such amended Mortgage Loan Schedule to the Depositor, the
Seller and the Trustee. Upon such substitution, the Replacement Mortgage Loan
or Loans shall be subject to the terms of this Agreement in all respects and
the Seller shall be deemed to have made, as of the date of substitution, with
respect to the Replacement Mortgage Loan or Loans, the representations and
warranties pertaining to the Mortgage Loans contained in Section 2.04(a)
hereof. Upon receipt of the Trustee Mortgage File pertaining to any
Replacement Mortgage Loans, the Trustee shall release, or cause to be
released, the Trustee Mortgage File held for the benefit of the
Certificateholders relating to such Deleted Mortgage Loan to the Seller or
Servicer as applicable and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary
to vest title (to the extent that such title was transferred to the Trustee)
in the Seller or Servicer as applicable, or its designee, to any Deleted
Mortgage Loan substituted for pursuant to this Section 2.04(b).
In any month in which the Seller or Servicer substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the Replacement Amount (if any) (after application of
scheduled principal portion of the Monthly Payments received in the month of
substitution). Such Replacement Amount shall be deposited into the Custodial
Account by the Seller or Servicer in the month of substitution pursuant to
Section 3.07, without any reimbursement thereof. The Servicer shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by a certificate of a Servicing Officer as to the calculation of
such shortage.
In the event that the Seller or Servicer shall have repurchased a
Mortgage Loan, upon receipt by the Trustee of written notification of the
deposit of the Purchase Price, the Trustee shall release, or cause to be
released, the related Trustee Mortgage File held for the benefit of the
Certificateholders to the Seller or Servicer as applicable and the Trustee
shall execute and deliver the related instruments of transfer or assignment,
in each case without recourse, as shall be necessary to transfer title (to the
extent that such title was transferred to the Trustee) from the Trustee for
the benefit of the Certificateholders and vest title in the Seller or
Servicer, or the designee thereof, as the case may be, to any Mortgage Loan
purchased pursuant to this Section 2.04(b). It is understood and agreed that
the obligation under this Agreement of any Person to repurchase or substitute
any Mortgage Loan as to which such breach has occurred and is continuing shall
constitute the sole and exclusive remedy respecting such breach available to
Certificateholders or the Trustee on their behalf.
SECTION 2.05. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans
together with the assignment to it of all other assets included in the Trust
Fund, receipt of which is hereby acknowledged. Concurrently with such
assignment and delivery, the Trustee, pursuant to the written request of the
Depositor executed by an officer of the Depositor, has executed the Class A1,
Class A2, Class M1, Class M2, Class M3, Class B1, Class B2, Class B3 and Class
R Certificates and caused them to be authenticated and delivered to or upon
the order of the Depositor in authorized denominations which evidence
ownership of the Trust Fund. The rights of the Holders of such Certificates to
receive distributions from the Trust Fund and all ownership interests of the
Holders of the Class A1, Class A2, Class M1, Class M2, Class M3, Class B1,
Class B2, Class B3 and Class R Certificates in such distributions shall be as
set forth in this Agreement.
SECTION 2.06. REMIC Provisions.
(a) As set forth in the Preliminary Statement hereto, the Trustee
shall elect REMIC status in accordance with the REMIC Provisions with respect
to each of the Lower Tier REMIC and the Upper Tier REMIC. The Trustee shall
make such elections on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Certificates are issued. For the purposes of such elections,
each Lower Tier Interest, other than the Class LT-R Interest, is hereby
designated as a regular interest in the Lower Tier REMIC, and each Upper Tier
Interest, other than the Class UT-R Interest, is hereby designated as a
regular interest in the Upper Tier REMIC. The Class LT-R Interest is hereby
designated as the sole residual interest in the Lower Tier REMIC and the Class
UT-R Interest is hereby designated as the sole residual interest in the Upper
Tier REMIC. The Class R Certificate evidences ownership of the Class LT-R
Interest and the Class UT-R Interest.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 86OG(a)(9) of the Code.
(c) The Trustee shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Trustee in fulfilling its
duties hereunder (including its duties as tax return preparer). The Trustee
shall be entitled to reimbursement of expenses to the extent provided in
clause (i) above from the Certificate Account.
(d) The Trustee shall prepare, sign and file, all of each REMIC's
federal and state tax and information returns as such REMIC's direct
representative. The expenses of preparing and filing such returns shall be
borne by the Trustee.
(e) The Trustee or its designee shall perform on behalf of each
REMIC all reporting and other tax compliance duties that are the
responsibility of such REMIC under the Code, the REMIC Provisions, or other
compliance guidance issued by the Internal Revenue Service or any state or
local taxing authority. Among its other duties, if required by the Code, the
REMIC Provisions, or other such guidance, the Trustee shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate
to any disqualified person or organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Servicer and the Holders of Certificates shall
take any action or cause the REMIC to take any action necessary to create or
maintain the status of such REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status.
Neither the Trustee, the Servicer nor the Holder of any Residual Certificate
shall take any action, cause the REMIC to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of such
REMIC as a REMIC or (ii) result in the imposition of a tax upon such REMIC
(including but not limited to the tax on prohibited transactions as defined in
Code Section 860F(a)(2) and the tax on prohibited contributions set forth on
Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee and the Servicer have received an Opinion of Counsel (at
the expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition
of such a tax. In addition, prior to taking any action with respect to the
REMIC or the assets therein, or causing such REMIC to take any action, which
is not expressly permitted under the terms of this Agreement, any Holder of a
Residual Certificate will consult with the Trustee and the Servicer, or their
respective designees, in writing, with respect to whether such action could
cause an Adverse REMIC Event to occur with respect to such REMIC, and no such
Person shall take any such action or cause such REMIC to take any such action
as to which the Trustee or the Servicer has advised it in writing that an
Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and
all taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in such REMIC or, if no such amounts are available, out
of other amounts held in the Certificate Account, and shall reduce amounts
otherwise payable to holders of regular interests in such REMIC, as the case
may be.
(h) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis.
(i) Within 30 days after the Closing Date, the Trustee shall prepare
and file with the Internal Revenue Service Form 8811, "Information Return for
Real Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized
Debt Obligations" for each Trust REMIC.
(j) Neither the Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed
in lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of the Trust Fund pursuant to Article X of this Agreement or (iv)
a purchase of Mortgage Loans pursuant to Article II or III of this Agreement)
nor acquire any assets for the Trust Fund, nor sell or dispose of any
investments in the Custodial Account or the Certificate Account for gain nor
accept any contributions to the Trust Fund after the Closing Date (a) unless
it has received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not affect adversely the status of any REMIC
as a REMIC or (b) unless the Servicer has determined in its sole discretion to
indemnify the Trust Fund against such tax.
(k) In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided to the
Trustee, within ten days after the Settlement Date, all information or data
that the Trustee determines to be relevant for tax purposes to the valuations
and offering prices of the Certificates, including, without limitation, the
price, yield, prepayment assumption and projected cash flows of the
Certificates and the Mortgage Loans and the Trustee shall be entitled to rely
upon any and all such information and data in the performance of its duties
set forth herein. Thereafter, the Servicer shall provide, promptly upon
request therefor, any such additional information or data that the Trustee may
from time to time reasonably request in order to enable the Trustee to perform
its duties as set forth herein and the Trustee shall be entitled to rely upon
any and all such information and data in the performance of its duties set
forth herein. The Depositor shall indemnify the Trustee and hold it harmless
for any loss, liability, damage, claim or expense of the Trustee arising from
any failure of the Depositor to provide, or to cause to be provided, accurate
information or data to the Trustee on a timely basis. The Servicer shall
indemnify the Trustee and hold it harmless for any loss, liability, damage,
claim or expense of the Trustee arising from any failure of the Servicer to
provide, or to cause to be provided, accurate information or data to the
Trustee on a timely basis. The indemnification provisions hereunder shall
survive the termination of this Agreement and shall extend to any co-trustee
appointed pursuant to this Agreement.
(l) The Trustee shall treat the Basis Risk Reserve Fund as an
outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Holder of the Class A2 Certificate and that
is not an asset of any REMIC created under this Agreement. The Trustee shall
treat the rights of the Class A1, Class M1, Class M2, Class M3, Class B1, and
Class B2 Certificateholders to receive payments from any Basis Risk Reserve
Fund in the event of a Basis Risk Shortfall as rights in an interest rate cap
contract written by the Class A2 Certificateholder in favor of the Class A1,
Class M1, Class M2, Class M3, Class B1 and Class B2 Certificateholders. Thus,
each Class A1, Class M1, Class M2, Class M3, Class B1, and Class B2
Certificate shall be treated as representing not only ownership of regular
interests in the Upper Tier REMIC, but also ownership of an interest in an
interest rate cap contract. Within five Business Days of the Settlement Date,
the Depositor shall inform the Trustee of the value of the interest rate cap
contract component of the Class A1, Class M1, Class M2, Class M3, Class B1,
and Class B2 Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Servicing Standard.
(a) For and on behalf of the Trustee and the Certificateholders, the
Servicer shall service and administer the Mortgage Loans in accordance with
prudent mortgage loan servicing standards and procedures generally accepted in
the mortgage banking industry and generally in a manner consistent with Fannie
Mae guidelines except as otherwise expressly provided in this Agreement. In
connection with such servicing and administration, the Servicer shall have
full power and authority, acting alone and/or through any Sub-Servicer as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, subject
to the terms hereof (1) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents (including, without limitation, estoppel
certificates), (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, (iv) to consent to any subordinate financings to be
secured by any Mortgaged Property to the extent that such consent is required
pursuant to the terms of the related Mortgage, (v) to consent to the
application of any proceeds of insurance policies or condemnation awards to
the restoration of the applicable Mortgaged Property or otherwise, and (vi)
subject to the provisions of Section 3.07 and 3.13, to effectuate foreclosure
or other conversion of the ownership of the Mortgage Property securing any
Mortgage Loan; provided, however, that the Servicer shall take no action that
is materially inconsistent with or materially prejudices the interest of the
Trustee or the Certificateholders in any Mortgage Loan or the rights and
interest of the Depositor, the Trustee and the Certificateholders under the
terms of this Agreement unless such action is specifically called for by the
terms hereof.
(b) Without limiting the generality of the foregoing, but subject to
the terms hereof, the Servicer, in its own name or in the name of the Trustee,
is hereby authorized and empowered by the Depositor and the Trustee, when the
Servicer believes it appropriate in its best judgment, to execute and deliver,
on behalf of the Trustee, the Certificateholders or any of them, any and all
instruments of modification, satisfaction, cancellation or assignment, 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 held for the benefit of the Certificateholders. The Servicer shall
promptly notify the Trustee of any such execution and delivery. The Trustee
for the benefit of the Certificateholders shall execute any powers of attorney
and other documents necessary or appropriate to enable the Servicer to service
and administer the Mortgage Loans.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer shall not (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, imminent)
permit any modification with respect to any Mortgage Loan (i) that would
change the Net Mortgage Rate or, reduce or increase the principal balance
(except for increases resulting from the addition of Deferred Interest and
reductions resulting from actual payments of principal) or (ii) that would
both constitute a sale or exchange of such Mortgage Loan within the meaning of
Section 1001 of the Code (including any proposed, temporary or final
regulations promulgated thereunder) (other than in connection with a proposed
conveyance or assumption of such Mortgage Loan that is a Principal Prepayment
made (or treated as made) by the Mortgagor of the entire principal balance of
a Mortgage Loan) and cause the Trust Fund to fail to qualify as a REMIC under
the Code.
SECTION 3.02. Enforcement of the Obligations of Sub-Servicers.
(a) For purposes of this Agreement, the Servicer shall be deemed to
have received the payments on the Mortgage Loans referred to in Sections 3.07
and 3.08 hereof when the related Sub-Servicer, if any, has received such
payments and shall remain obligated to deposit such payments in accordance
with Sections 3.07 and 3.08 hereof, regardless of whether such payments are
remitted by the Sub-Servicer to the Servicer. The Servicer and the related
Sub-Servicer may enter into amendments to any applicable Sub-Servicing
Agreement; provided, however, that any such amendments shall be consistent
with and shall not violate the provisions of this Agreement.
(b) As part of its servicing activities hereunder, the Servicer, for
the benefit of the Depositor, the Trustee and the Certificateholders, shall
supervise, administer, monitor and oversee the servicing of the Mortgage Loans
that are not serviced by it directly, and shall enforce the obligations of
each Sub-Servicer, if any, under the related Sub-Servicing Agreement. Such
enforcement shall include, without limitation, the legal prosecution of
claims, termination of Sub-Servicing Agreements, as appropriate, and the
pursuit of other appropriate remedies, and shall be in such form and carried
out to such an extent and at such time as the Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Servicer shall pay the costs of such enforcement at its own
expense, but shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement only to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans or (ii) from
a specific recovery of costs, expenses or attorneys fees against the party
against whom such enforcement is directed. The Servicer shall not waive any
event of default by a Sub-Servicer under a Sub-Servicing Agreement which is a
failure to remit any payment required to be made by such Sub-Servicer that
would result in an Event of Default under this Agreement.
(c) During the term of this Agreement, the Servicer shall consult
fully with each of the Sub-Servicers as may be necessary from time to time to
perform and carry out the Servicer's obligations hereunder and receive, review
and evaluate all reports, information and other data that are provided to the
Servicer by each Sub-Servicer and otherwise exercise reasonable efforts to
cause each Sub-Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by it under its Sub-Servicing
Agreement.
SECTION 3.03. Termination of the Rights of Sub-Servicers.
If the Servicer terminates the rights of a Sub-Servicer under any
Sub-Servicing Agreement, the Servicer shall service the Mortgage Loans
directly pursuant to and in accordance with the terms of this Agreement, or at
the Servicer's election, enter into a substitute servicing agreement with
another mortgage loan servicing company reasonably acceptable to the Servicer
under which such mortgage loan servicing company shall assume, satisfy,
perform and carry out all liabilities, duties, responsibilities and
obligations that are to be, or otherwise were to have been, satisfied,
performed and carried out by the terminated Sub-Servicer, regardless of
whether such liabilities, duties, responsibilities or obligations shall have
accrued before or after the termination of the rights of such Sub-Servicer;
provided, however, that any such substitute servicer and any such substitute
servicing shall satisfy the requirements of Sections 3.01 and 3.02. If the
Servicer does not elect to enter into a substitute servicing agreement with a
successor servicer, the Servicer shall nevertheless service the Mortgage Loans
directly pursuant to and in accordance with the terms of this Agreement, until
a substitute Sub-Servicer has been appointed and designated and a substitute
servicing agreement has been entered into by the Servicer and such substitute
Sub-Servicer.
SECTION 3.04. Liability of the Servicer.
Notwithstanding the provisions of any Sub-Servicing Agreement, any
of the provisions of this Agreement relating to agreements or arrangements
between the Servicer or a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Servicer shall remain obligated and liable to
the Depositor, the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans included in the Trust Fund in accordance
with (and subject to the limitations contained within) the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. The Servicer shall be entitled to enter into
any agreement with a Sub-Servicer for indemnification of the Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
SECTION 3.05. Rights of the Depositor and the Trustee in Respect of the
Servicer.
The Servicer shall afford the Depositor and the Trustee, without
charge but only upon reasonable notice and during normal business hours,
access to all records and documentation in the Servicer's possession regarding
the Mortgage Loans and to all accounts, insurance policies and other matters
in the Servicer's possession relating to this Agreement and access to officers
of the Servicer responsible for its obligations hereunder. The Depositor may,
but is not obligated to, enforce the obligations of the Servicer hereunder.
The Depositor shall not have any responsibility or liability for any action or
failure to act by the Servicer and is not obligated to supervise the
performance of the Servicer hereunder or otherwise.
SECTION 3.06. Trustee to Act as Servicer.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee
shall thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter (except that the Trustee shall not be liable for
losses in connection with Eligible Investments required to be paid by the
Servicer pursuant to Section 3.07 or 4.01 hereof, obligated to make Monthly
Advances if prohibited by applicable law, nor to effectuate repurchases or
substitutions of Mortgage Loans hereunder as substitute Servicer, including
pursuant to Section 2.04 hereof and except that the Trustee makes no
representations and warranties hereunder, including pursuant to Section 2.04
hereof). If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor servicer) shall succeed to any rights and obligations of the
Servicer under any Sub-Servicing Agreement and shall be deemed to have assumed
the Servicer's interest therein; provided, however, that the Servicer shall
not thereby be relieved of any liability or obligations under this Agreement,
any Sub-Servicing or substitute servicing agreement arising prior to the date
of such succession.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of servicing to the
assuming party.
SECTION 3.07. Collection of Mortgage Loan Payments.
(a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans and
shall, to the extent such procedures shall be consistent with this Agreement,
follow such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans held in its own portfolio and serviced by the
Servicer. Consistent with the foregoing, the Servicer may in its discretion
(a) waive any late payment charge or any prepayment charge or penalty interest
in connection with the prepayment of a Mortgage Loan and (b) subject to
Section 3.01, only upon determining that the coverage of such Mortgage Loan by
any related Primary Mortgage Insurance Policy will not be affected, extend the
due dates for payments due on a Mortgage Note for a period not greater than
365 days, but in no event beyond the maturity date of any Mortgage Loan. In
the event of any such arrangement described in clause (b) of the preceding
sentence, the Servicer shall continue to make timely Monthly Advances on the
related Mortgage Loan, pursuant to and in accordance with Section 5.04 of this
Agreement (but subject to any limitations contained therein), during the
scheduled period in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangements.
(b) The Servicer shall establish and maintain, in its name on behalf
of the Certificateholders, the Custodial Account. The Servicer shall deposit
into the Custodial Account within two Business Days of receipt by the
Servicer, or receipt from the Sub-Servicers except as otherwise specifically
provided herein, 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 and any other payments on the Mortgage Loans due on or before 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 less
the Servicing Fee;
(iii) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, net of Liquidation Expenses, unpaid
servicing compensation and unreimbursed Monthly Advances;
(iv) any amount of any losses required to be deposited by the
Servicer pursuant to Section 3.07(c) in connection with any losses on
Eligible Investments;
(v) any amounts required to be deposited by the Servicer pursuant to
Section 3.11 hereof;
(vi) all proceeds of any purchase by the Seller or the Servicer, as
the case may be, of any Mortgage Loans or property acquired in respect of
the Mortgage Loans pursuant to Sections 2.01, 2.02, 2.03, 2.04, 3.12 or
10.01 hereof and any Replacement Amounts required to be deposited in
connection with the substitution of Replacement Mortgage Loans pursuant
to Sections 2.01, 2.02, 2.03, 2.04 or 3.12 hereof; and
(vii) any other amounts required to be deposited in the Custodial
Account pursuant to this Agreement including, without limitation, the
amounts required to be deposited therein pursuant to Section 3.13 hereof.
The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, the Servicing Fee, payments in the nature of
prepayment penalties, fees or premiums, late payment charges and assumption
fees and any excess interest charges payable by the Mortgagor by virtue of any
default or other non-compliance by the Mortgagor with the terms of the
Mortgage or any other instrument or document executed in connection therewith
or otherwise, if collected, need not be remitted or deposited into the
Custodial Account by the Servicer. In the event that the Servicer shall remit
or deposit any amount not required to be remitted or deposited and not
otherwise subject to withdrawal pursuant to Section 3.09 hereof, it may at any
time withdraw such amount from the Custodial Account on the following
Distribution Date, any provision herein to the contrary notwithstanding. All
funds deposited in the Custodial Account shall be held by the Servicer in
trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.09. In no event shall the
Trustee incur liability for withdrawals from the Custodial Account at the
direction of the Servicer.
(c) Any investments of amounts on deposit in the Custodial Account
shall be made by the Servicer in Eligible Investments, which shall mature not
later than the second Business Day preceding the Distribution Date following
the date of such investment (except that if such Eligible Investment is an
obligation of the institution that maintains the Custodial Account, then such
Eligible Investment shall mature not later than such Distribution Date). All
such Eligible Investments shall be made in the name of the Trustee for the
benefit of the Certificateholders. All income and gain net of any losses
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to withdrawal at its direction from time to time. The amount
of any losses net of any gains incurred by the Servicer in respect of any such
investments shall be remitted to the Trustee or deposited in the Custodial
Account out of the Servicer's own funds promptly following the date the same
are realized.
(d) The Servicer shall promptly give notice to the Trustee, the
Rating Agencies and the Depositor of the location of the Custodial Account and
of any change thereof.
SECTION 3.08. Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.
(a) In addition to the Custodial Account, the Servicer shall
establish and maintain one or more custodial accounts (each, an "Escrow
Account") and deposit and retain therein all collections from the Mortgagors
(or advances by the Servicer) for the payment of taxes, assessments and hazard
insurance premiums or comparable items for the account of the Mortgagors.
Escrow Accounts shall be Eligible Accounts. All costs incurred by the Servicer
or by the related Sub-Servicer in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Scheduled Principal Balance under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans
so permit.
(b) Withdrawals of amounts so collected from the Escrow Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance
premiums or Primary Mortgage Insurance Policy premiums, condominium or PUD
association dues, or comparable items, to reimburse the Servicer pursuant to
Section 3.10 hereof (with respect to the Primary Mortgage Insurance Policy)
and this Section 3.08 (with respect to taxes and assessments) and Section 3.11
hereof (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 Escrow Account or to clear and terminate the
Escrow Account at the termination of this Agreement in accordance with Section
10.01 hereof. As part of its servicing duties, the Servicer shall, and the
Sub-Servicers shall, pursuant to any Sub-Servicing Agreement, be required to,
pay to the Mortgagors interest on funds in the Escrow Account, to the extent
required by law.
(c) The Servicer shall, with respect to each Mortgage Loan, to the
extent any related Sub-Servicer does not do so, advance the payments referred
to in Section 3.08(b) that are not timely paid by the Mortgagors; provided,
however, that the Servicer shall be required to so advance only to the extent
that such advances, in the good faith judgment of the Servicer, will be
recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise out of the related Mortgage Loan; and provided further, that such
payments shall be advanced when the tax, premium or other cost for which such
payment is intended is due.
SECTION 3.09. Permitted Withdrawals from the Custodial Account.
(a) The Servicer may (and, with respect to clauses (v) and (vii)
below, shall), from time to time, make, to the extent required or authorized
hereunder, withdrawals from the Custodial Account for the following purposes:
(i) to pay to the Servicer from funds on deposit in the Custodial
Account earnings on or investment income with respect to funds in the
Custodial Account less losses referred to in Section 3.07(iv);
(ii) to reimburse the Servicer for advances made pursuant to
Sections 3.01, 3.08, 3.10, 3.11, 3.13, 5.04 and 5.05 hereof, such right
of reimbursement pursuant to this subclause (ii) being limited to amounts
received in respect of the particular Mortgage Loan (including, for this
purpose, Insurance Proceeds, Liquidation Proceeds, amounts representing
proceeds of other insurance policies, if any, covering the related
Mortgaged Property, rental and other income from REO Property and
proceeds of any purchase or repurchase of the related Mortgage Loan);
(iii) to reimburse the Servicer for any Nonrecoverable Advances made
in respect of any Mortgage Loan;
(iv) to reimburse the Servicer from Liquidation Proceeds for
Liquidation Expenses and, to the extent that Liquidation Proceeds after
such reimbursement are in excess of the Scheduled Principal Balance of
the related Mortgage Loan together with accrued and unpaid interest
thereon at a rate equal to the Mortgage Rate, to pay out of such excess
the amount of any unpaid servicing compensation to the Servicer with
respect to any Mortgage Loan, which may include any unpaid servicing
compensation to a Sub-Servicer (for disbursement in accordance with
Section 3.16 hereof);
(v) to pay to the Seller or the Servicer, as the case may be, with
respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased pursuant to Sections 2.01, 2.02, 2.04 or 3.12
hereof all amounts received thereon and not taken into account in
determining the Purchase Price of such repurchased Mortgage Loan;
(vi) to reimburse the Servicer or the Depositor for expenses
incurred by and reimbursable to the Servicer or the Depositor pursuant to
Section 7.03 hereof or Section 9.10(f);
(vii) to withdraw any amount deposited in the Custodial Account
pursuant to Section 3.07 and not required to be deposited therein; and
(viii) to clear and terminate the Custodial Account upon termination
of this Agreement pursuant to Section 10.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) through
(v).
(b) On or prior to the Business Day preceding each Distribution Date
after payment of items (i) through (viii) of Section 3.09(a), the Servicer
shall withdraw from the Custodial Account and remit to the Trustee, in
immediately available funds, and the Trustee, upon receipt thereof, shall
deposit in the Certificate Account, an amount equal to the Total Distribution
Amount for such Distribution Date.
SECTION 3.10. Maintenance of Primary Mortgage Insurance Policies;
Collections Thereunder.
(a) The Servicer shall not take, or permit any Sub-Servicer to take,
any action that would result in loss of coverage under any applicable Primary
Mortgage Insurance Policy for any loss which, but for the actions of the
Servicer or Sub-Servicer, would have been covered thereunder.
(b) The Servicer shall keep in full force and effect each Primary
Mortgage Insurance Policy applicable to a Mortgage Loan being serviced by it
until the principal balance of the related Mortgage Loan, in the case of a
Mortgage Loan having a Loan-to-Value Ratio at origination in excess of 80%, is
reduced to (i) 80% or less of the Appraised Value or (ii) 80% or less of its
current value based on a new appraisal. The Servicer agrees to pay to the
extent the related Mortgagor does not do so, the premiums for each Primary
Mortgage Insurance Policy on a timely basis and shall use its best reasonable
efforts to cause itself or the Sub-Servicer to be named as loss payee;
provided, however, that the Servicer shall be required to pay such premiums
only to the extent that such advances, in the good faith judgment of the
Servicer, will be recoverable by the Servicer out of Insurance Proceeds,
Liquidation Proceeds or otherwise out of the related Mortgage Loan. In the
event that the insurer under any Primary Mortgage Insurance Policy shall cease
to be qualified to transact a mortgage guaranty insurance business under the
laws of the state of its organization or any other state that has jurisdiction
over such insurer (or if such insurer's claims-paying ability shall adversely
affect the rating on the Class A Certificates) or such Primary Mortgage
Insurance Policy is cancelled or terminated for any reason, the Servicer shall
exercise its best reasonable efforts to obtain, or to cause the related
Sub-Servicer to obtain, from another Qualified Insurer, a replacement policy
comparable to such Primary Mortgage Insurance Policy at the expense of the
Mortgagor. The Servicer shall not consent to the cancellation or refusal to
renew any such Primary Mortgage Insurance Policy applicable to any Mortgage
Loan, which is in effect at the date of the initial issuance of the
Certificates and is required to be kept in force hereunder unless the
replacement Primary Mortgage Insurance Policy for such cancelled or
non-renewed policy is maintained with an insurer with a rating not lower than
the insurer issuing the Primary Mortgage Insurance Policy in effect at the
date of the initial issuance of the Certificates or whose claims-paying will
not adversely affect the rating on the Certificates or unless any such
cancellation or refusal, or consent thereto, will not adversely affect the
rating on the Certificates. In connection with any assumption and modification
agreement entered into by the Servicer or a Sub-Servicer pursuant to Section
3.12, the Servicer shall obtain a replacement Primary Mortgage Insurance
Policy, as provided above.
(c) In connection with its activities as administrator and servicer
of the Mortgage Loans, the Servicer agrees to present, on behalf of itself,
and on behalf of the Trustee for the benefit of the Certificateholders, claims
to the insurer under any Primary Mortgage Insurance Policies and, in this
regard, to take such reasonable action as shall be necessary to permit
recovery under any Primary Mortgage Insurance Policies respecting defaulted
Mortgage Loans. Pursuant to Section 3.07 hereof, any amounts collected by the
Servicer under any Primary Mortgage Insurance Policy shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.09 hereof.
SECTION 3.11. Maintenance of Hazard Insurance and Other Insurance.
(a) The Servicer shall cause to be maintained for each Mortgage
Loan, hazard insurance with extended coverage in an amount that is at least
equal to the maximum insurable value of improvements securing such Mortgage
Loan or its Scheduled Principal Balance, whichever is less.
(b) Each policy of standard hazard insurance shall contain, or have
an accompanying endorsement that contains, a standard mortgagee clause
complying in all material respects in form and substance to applicable Fannie
Mae guidelines. The Servicer shall cause to be maintained on property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan,
liability insurance and, to the extent described below, flood insurance.
Pursuant to Section 3.07 hereof, any amounts collected by the Servicer under
any such policies (other than amounts to be applied to the restoration or
repair of the related Mortgaged Property or property thus acquired or amounts
released to the Mortgagor in accordance with the terms of the applicable
Mortgage or the Servicer's normal servicing procedures) shall be deposited in
the Custodial Account, subject to withdrawal pursuant to Section 3.09 hereof.
Any cost incurred by the Servicer or the related Sub-Servicer in
maintaining any such insurance shall not, for the purpose of calculating
monthly distributions to the Certificateholders or remittances to the Trustee
for their benefit, be added to the Scheduled Principal Balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such
costs shall be recoverable by the Servicer out of payments by the related
Mortgagor or out of Insurance Proceeds or Liquidation Proceeds to the extent
permitted by Section 3.09 hereof. If the Mortgaged Property is located at the
time of origination of the Mortgage Loan in a federally designated special
flood hazard area, the Servicer shall cause flood insurance to be maintained.
Such flood insurance shall be in an amount equal to the lesser of (i) the
unpaid Scheduled Principal Balance of the related Mortgage Loan or (ii) the
maximum amount of such insurance available for the related Mortgaged Property
under the national flood insurance program, if the area in which such
Mortgaged Property is located is participating in such program.
Notwithstanding anything in this paragraph to the contrary, the Servicer shall
be required to pay the costs of maintain any insurance contemplated by this
Section 3.11 only to the extent that such advances, in the good faith judgment
of the Servicer, will be recoverable by the Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise out of the related Mortgage Loan.
(c) In the event that the 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 Section 3.11(a), it being understood and agreed that
such policy may contain a deductible clause on terms substantially equivalent
to those commercially available and maintained by comparable servicers, and
provided that the provider of such blanket policy is rated by A.M. Best
Company A:V or higher and the claims-paying ability of such provider is rated
in one of the three highest rating categories by at least one nationally
recognized statistical rating organization. If such policy contains a
deductible clause, the Servicer shall, to the extent that there shall not have
been maintained on the related Mortgaged Property a policy complying with the
first sentence of Section 3.11(a) and there shall have been a loss that would
have been covered by such policy, remit to the Trustee for deposit in the
Custodial Account the amount not otherwise payable under the blanket policy
because of such deductible clause, accompanied by a certificate of a Servicing
Officer describing the calculation of such amount. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Servicer
agrees to present, on behalf of itself, the Depositor, the Trustee or its
agent for the benefit of the Certificateholders, claims under any such blanket
policy.
SECTION 3.12. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.12(a), when any
property subject to a Mortgage has been conveyed by the Mortgagor, the
Servicer shall, to the extent that it has knowledge of such conveyance,
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. In the event that the
Servicer or the related Sub-Servicer is prohibited by law from enforcing any
such due-on-sale clause, or if coverage under any Required Insurance Policy
would be adversely affected, the Servicer is authorized, subject to Section
3.12(b), to take or enter into an assumption and modification agreement from
or with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and,
unless prohibited by applicable state law, the Mortgagor remains liable
thereon, provided that the Mortgage Loan shall continue to be covered (if so
covered before the Servicer enters such agreement) by the applicable Required
Insurance Policies. The Servicer, subject to Section 3.12(b), is also
authorized with the prior approval of the insurers under any Required
Insurance Policies to enter into a substitution of liability agreement with
such person, pursuant to which the original Mortgagor is released from
liability and such person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section 3.12(a) by reason of any transfer
or assumption which the Servicer is restricted by law from preventing, for any
reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.12(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, if an
assumption is permitted under Section 3.12(a) and such Person is to enter into
an assumption agreement or modification agreement or supplement to the
Mortgage Note or Mortgage held for the benefit of the Certificateholders that
requires the signature of the Trustee, or if an instrument of release signed
by the Trustee is required releasing the Mortgagor from liability on the
Mortgage Loan, the Servicer shall 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 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 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 thereof 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 the remaining term thereof or, if
the Mortgage Loan provided that the amortization period on which the Monthly
Payments were based was a longer period, such period has not been extended,
(D) the interest rate on the Mortgage Loan will not be altered nor will the
term of the Mortgage Loan be increased as a result of such assumption or
transfer and (E) if the seller/transferor of the Mortgaged Property is to be
released from liability on the Mortgage Loan, the Servicer used the same
underwriting standards in evaluating the creditworthiness of the
purchaser/transferee as were used in making the original Mortgage Loan, and,
based on such underwriting criteria, such release will not (based on the
Servicer's good faith determination) adversely affect the collectibility of
the Mortgage Loan. Upon receipt of such certificate, the Trustee for the
benefit of the Certificateholders shall execute any necessary instruments for
such assumption or substitution of liability. Upon the closing of the
transactions contemplated by such documents, the 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 or its agent for the benefit of the Certificateholders and
deposited with the Trustee Mortgage File for such Mortgage Loan. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
In the event that the Servicer, in connection with any such
assumption or modification agreement or supplement to the Mortgage Note, is
unable to deliver the certificate of the Servicing Officer set forth above,
the Servicer shall purchase, or cause the related Sub-Servicer to purchase,
the related Mortgage Loan in the manner, and at the Purchase Price, set forth
in Section 2.04(b) hereof.
SECTION 3.13. Realization Upon Defaulted Mortgage Loans.
(a) The 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, in the reasonable judgment
of the Servicer, no satisfactory arrangements can, in accordance with prudent
lending practices, be made for collection of delinquent payments pursuant to
Section 3.01 hereof. In connection with such foreclosure or other conversion,
the Servicer shall 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 for its own portfolio and as are in accordance with
the requirements of the insurer under any Required Insurance Policy and shall
deliver to the Trustee a liquidation report with respect to the related
Mortgage Loan on the form of report customarily prepared by the Servicer. In
particular, the Servicer will service each Mortgage Loan in a manner that
preserves the right to proceed against all collateral securing such Mortgage
Loan (e.g., in accordance with any applicable "single action" rule). The
Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration, repair, protection or maintenance of
any property unless it shall determine in its sole discretion that such
expenses will be recoverable to it as Liquidation Expenses either through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Custodial Account pursuant to Section 3.09(a) hereof) or
through Insurance Proceeds (respecting which it shall have similar priority).
The Servicer shall be responsible for all other costs and expenses incurred by
it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the proceeds of liquidation of the related
Mortgaged Property, as contemplated in Section 3.09 hereof.
(b) In the event that any Mortgaged Property becomes an REO
Property, the deed or certificate of sale shall be taken in the name of the
Trustee for the benefit of the Certificateholders, or its nominee, on behalf
of the Certificateholders. Pursuant to its efforts to sell such REO Property,
the Servicer shall either itself or through an agent selected by the Servicer
protect and conserve such REO Property in the same manner and to such extent
as is customary in the locality where such REO Property is located and may,
incident to its conservation and protection of the interests of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems
to be in the best interest of the Servicer and the Certificateholders for the
period prior to the sale of such REO Property on such terms and conditions and
for such periods as the Servicer deems to be in the best interest of the
Servicer and the Certificateholders. Notwithstanding anything herein to the
contrary, in the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer, on behalf of the Trust Fund, shall dispose of
such REO Property within three full years after the taxable year of its
acquisition by the Trust Fund for purposes of Section 860G(a)(8) of the Code
(or such shorter period as may be necessary under applicable state (including
any state in which such property is located) law to maintain the status of any
REMIC as a REMIC under applicable state law and avoid taxes resulting from
such property failing to be foreclosure property under applicable state law)
or, at the expense of the Trust Fund, request, more than 60 days before the
day on which such grace period would otherwise expire, an extension of such
grace period unless the Servicer obtains for the Trustee an Opinion of
Counsel, addressed to the Trustee and the Servicer, to the effect that the
holding by the Trust Fund of such REO Property subsequent to such period will
not result in the imposition of taxes on "prohibited transactions" as defined
in Section 860F of the Code, or cause any REMIC to fail to qualify as a REMIC
under the Code at any time that any Certificates are outstanding, in which
case the Trust Fund may continue to hold such REO Property (subject to any
conditions contained in such Opinion of Counsel). The Servicer shall be
entitled to be reimbursed from the Custodial Account for any costs incurred in
obtaining such Opinion of Counsel. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the
Trust Fund in such circumstances or manner or pursuant to any terms that would
(i) cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC
to the imposition of any federal income taxes on the income earned from such
REO Property, including any taxes imposed by reason of Section 860G(c) of the
Code, unless the Servicer has agreed to indemnify and hold harmless the Trust
Fund with respect to the imposition of any such taxes.
(c) The decision of the Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Servicer that the
proceeds of such foreclosure would exceed the costs and expenses of bringing
such a proceeding. The income earned from the management of any Mortgaged
Properties acquired through foreclosure or other judicial proceeding on behalf
of the Certificateholders, net of reimbursement to the Servicer for expenses
incurred (including any taxes) in connection with such management, advances
made by the Servicer pursuant to Sections 3.01, 3.08, 3.10, 3.11, 3.13, 5.04
or 5.05 in connection with the related Mortgage Loan or REO Property and
Liquidation Expenses incurred by the Servicer in connection with the related
Mortgage Loan, shall be applied to the payment of principal of and interest on
the related defaulted Mortgage Loans (with interest accruing and principal
amortizing as though such Mortgage Loans were still current) and all such
income shall be deemed, for all purposes in this Agreement, to be payments on
account of principal of and interest on the related Mortgage Notes and shall
be deposited into the Custodial Account.
(d) Prior to obtaining or causing the Trustee to obtain a deed as a
result of or in lieu of foreclosure, or otherwise acquiring (or causing the
Trustee to acquire) possession of or title to any Mortgaged Property, if the
Servicer determines that obtaining a deed or otherwise acquiring title or
possession of such Mortgaged Property would likely subject the Servicer, the
Trustee or the Trust Fund to substantial liability in respect of environmental
conditions concerning the Mortgaged Property, (a) the Servicer shall (i)
notify the Trustee and the Depositor of such determination and (ii) refrain
from obtaining or directing the Trustee to obtain a deed as a result of or in
lieu of foreclosure or otherwise acquiring title or possession to such
Mortgaged Property and (b) the obligations of the Servicer to make advances,
including, without limitation, Monthly Advances, in connection with the
Mortgage Loan in question shall cease as of the date that the Servicer makes
such determination.
SECTION 3.14. Trustee to Cooperate; Release of Trustee Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, and upon notification by the Servicer in the form
of 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 Custodial Account have been
or will be so deposited) of a Servicing Officer and a Request for Release of
the Trustee Mortgage File in the form of Exhibit G hereto the Trustee shall
promptly release the related Trustee Mortgage File to the Servicer, and the
Trustee shall execute and deliver to the Servicer the request for
reconveyance, deed of reconveyance or release, satisfaction or assignment of
mortgage or such instrument releasing the lien of the Mortgage, and, in each
case, such other documents or instruments as may be reasonably required in
connection therewith, as directed by the Servicer, together with the Mortgage
Note with written evidence of cancellation thereon. The provisions of the
immediately preceding sentence shall not, in any manner, limit or impair the
right of the Servicer to execute and deliver, on behalf of the Trustee, the
Certificateholders or any of them, any and all instruments of satisfaction,
cancellation or assignment, 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 held for the benefit of the
Certificateholders. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account but shall be paid by the Servicer. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including,
without limitation, for such purpose, collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the
purposes of effecting a partial or total release of any Mortgaged Property
from the lien of the Mortgage or the making of any corrections to the Mortgage
Note or the Mortgage or any of the other documents included in the Trustee
Mortgage File, the Trustee shall, upon request of the Servicer and the
delivery to the Trustee of a Request for Release signed by a Servicing
Officer, in the form of Exhibit G hereto, release the Trustee Mortgage File to
the Servicer. If the Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property, the Servicer shall deliver to
the Trustee, for signature as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity, together with a certificate of a
Servicing Officer requesting that such pleadings or documents be executed by
the Trustee. A Servicing Officer shall certify as to the reason such documents
or pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate the insurance coverage under any Required
Insurance Policy or invalidate or otherwise affect the lien of the Mortgage
except for the termination of such lien upon completion of the foreclosure.
SECTION 3.15. Documents, Records and Funds in Possession of Servicer to be
Held for the Trustee for the Benefit of the Certificateholders.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee to the extent required by this Agreement all
documents and instruments coming into the possession of the Servicer from time
to time and shall account fully to the Trustee for the benefit of the
Certificateholders for any funds received by the Servicer or which otherwise
are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan. All Servicer Mortgage Files or Trustee Mortgage
Files and funds collected or held by, or under the control of, the Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds or Insurance Proceeds,
including but not limited to, any funds on deposit in the Custodial Account,
shall be held by the Servicer for and on behalf of the Trustee for the benefit
of the Certificateholders and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this
Agreement. The Servicer also agrees that it shall not create, incur or subject
any Servicer Mortgage File or Trustee Mortgage File or any funds that are
deposited in the Custodial Account or any Escrow Account, or any funds that
otherwise are or may become due or payable to the Trustee for the benefit of
the Certificateholders, to any claim, lien, security interest, judgment, levy,
writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of setoff against any Servicer Mortgage File or
Trustee Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Servicer shall be entitled to set off
against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement subject to the terms of this
Agreement.
SECTION 3.16. Servicing Compensation; Compensating Interest.
(a) As compensation for its activities hereunder, the Servicer shall
be entitled to (i) retain from the Monthly Payments the Servicing Fee for each
Mortgage Loan and (ii) retain from the Custodial Account or withdraw from the
Custodial Account the amounts specified in subclause (i) of Section 3.09(a)
hereof as payable to it.
(b) Additional servicing compensation in the form of prepayment
penalties, fees or premiums, assumption fees, modification fees, late payment
charges or otherwise or any excess interest charges payable by the Mortgagor
by virtue of any default or other non-compliance by the Mortgagor with the
terms of the Mortgage or any other instrument or document executed in
connection therewith or otherwise shall be retained by the Servicer to the
extent not required to be deposited in the Custodial Account pursuant to
Section 3.07 hereof. To the extent provided in this Agreement, the Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including the payment of premiums for Primary
Mortgage Insurance Policies, to the extent such premiums are not required to
be paid or have not been paid by the related Mortgagor or the related
Sub-Servicer, payment of any premiums for hazard insurance, as required by
Section 3.11 hereof and maintenance of the other forms of insurance coverage
required by Section 3.11 hereof, the payment of servicing compensation to any
Sub-Servicers pursuant to any Sub-Servicing Agreement and the payment of the
expenses of the Trustee to the extent provided in Section 9.05), and shall not
be entitled to reimbursement therefor except as specifically provided in
Sections 3.09, 3.13, 4.01 and 5.05 hereof.
(c) Notwithstanding any other provision herein, the amount of
servicing compensation that the Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to Compensating Interest (if
any) for such Distribution Date. The Servicer shall, within one Business Day
of each Distribution Date, remit to the Trustee (but without duplication of
any Compensating Interest taken into account in any Monthly Advance made on
such date) the Compensating Interest due on such Distribution Date.
SECTION 3.17. Reports to the Depositor; Account Statements.
Within five Business Days following each Distribution Date, the
Servicer shall deliver to the Trustee a statement setting forth the status of
the Custodial Account, if any, as of the close of business on such
Distribution Date showing, for the period covered by such statement, the
aggregate of deposits in or withdrawals from the Custodial Account, if any,
for each category of deposit specified in Section 3.07 hereof and each
category of withdrawal specified in Section 3.09 hereof. The Servicer shall
forward a copy of such statement to the Rating Agencies.
SECTION 3.18. Annual Statement as to Compliance.
The Servicer shall deliver to the Depositor and the Trustee on or
before March 31 of each year, commencing March 31, 2001, an Officers'
Certificate stating, as to each signer thereof, that (a) a review of the
activities of the Servicer during the year ended on the preceding December 31
and of the performance of the Servicer under this Agreement has been made
under such officer's supervision, (b) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof, (c) a
Servicing Officer has conducted an examination of the activities of each
Sub-Servicer during the immediately preceding year and its performance under
any Sub-Servicing Agreement, and (d) 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 such
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 thereof. The Servicer shall
forward a copy of each such statement to the Rating Agencies.
SECTION 3.19. Annual Independent Public Accountants' Servicing Report.
On or before March 31 of each year, beginning with the first March
31 that occurs at least eleven months after the Cut-off Date, the Servicer, at
its expense, shall cause a firm of independent public accountants that is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Depositor and the Trustee for the benefit of the
Certificateholders to the effect that such firm has examined certain documents
substantially similar to this Agreement and records relating to the servicing
of mortgage loans serviced by the Servicer or any successor servicer that are
substantially similar to the Mortgage Loans and that, on the basis of an
examination conducted substantially in compliance with the Uniform Single
Audit Program for Mortgage Bankers or the Audit Program for Mortgages serviced
for Freddie Mac, such servicing has been conducted in compliance with such
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 Freddie Mac 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, if any, 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 Freddie Mac (rendered within one year of
such statement) of independent public accounts with respect to the related
Sub-Servicer. The Servicer shall forward a copy of each such report to the
Rating Agencies.
SECTION 3.20. Reports to Trustee.
On or prior to each Determination Date, the Servicer shall cause to
be delivered to the Trustee a monthly servicing report in electronic format
containing the information necessary to enable the Trustee to make the
distribution required by Section 5.02 and prepare the information set forth in
Section 4.03(a). The Trustee may conclusively rely on information provided by
the Servicer and shall have no obligation to recompute, recalculate, or verify
the accuracy of such information.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
SECTION 4.01. Certificate Account.
(a) The Trustee shall establish, prior to the Closing Date, and
shall maintain, in the name of the Trustee on behalf of the Holders of
interests in the Trust Fund, the Certificate Account, which shall be an
Eligible Account, into which the Trustee upon receipt from the Servicer shall
deposit all payments remitted by the Servicer and any amounts required to be
remitted by the Depositor pursuant to the terms hereof. All distributions to
be made from time to time to Holders of interests in the Trust Fund out of
funds in the Certificate Account shall be made by or on behalf of the Trustee.
The Certificate Account shall relate solely to the Certificates issued
hereunder and funds in the Certificate Account shall be held separate and
apart from and shall not be commingled with any monies including, without
limitation, other monies of the Trustee held under this Agreement. The Trustee
will give notice to the Servicer and the Depositor of the location of the
Certificate Account and of any change thereof, prior to the use thereof. Funds
held in the Certificate Account and delivered to the Trustee earlier than one
Business Day prior to the next Distribution Date (or delivered on such
Distribution Date within time frames to be agreed upon between the Servicer
and the Trustee) shall be invested by the Trustee in Eligible Investments as
directed by the Servicer for the benefit of the Servicer or shall remain
uninvested. The Trustee shall cause each such Eligible Investment to be
Delivered to it or its nominee (including a securities intermediary). All
income and gain net of any losses realized from any such investment shall be
for the benefit of the Servicer and shall be subject to withdrawal at the
Servicer's direction from time to time. The amount of any losses net of any
gains incurred by the Servicer in respect of any such investments shall be
deposited in the Certificate Account out of the Servicer's own funds
immediately as realized.
(b) The Trustee shall make, to the extent required or authorized
hereunder, withdrawals from the Certificate Account for the following
purposes:
(i) to withdraw any amount deposited in the Certificate Account and
not required to be deposited therein;
(ii) to reimburse the Servicer for any unreimbursed Nonrecoverable
Advance;
(iii) to make required distributions pursuant to Section 5.02; and
(iv) to pay to the Depositor or the Servicer any amount to which it
is entitled pursuant to Section 7.03.
SECTION 4.02. Determination of LIBOR.
(a) If the outstanding Certificates include any LIBOR Certificates,
then on each LIBOR Determination Date the Trustee shall determine LIBOR on the
basis of the offered LIBOR quotations of the Reference Banks as of 11:00 a.m.
London time on such LIBOR Determination Date as follows:
(i) If on any LIBOR Determination Date two or more of the Reference
Banks provide such offered quotations, LIBOR for the next Accrual Period
will be the arithmetic mean of such offered quotations (rounding such
arithmetic mean if necessary to the nearest five decimal places);
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Accrual Period will be whichever is the higher of (x) LIBOR as determined
on the previous LIBOR Determination Date or (y) the Reserve Interest
Rate. The "Reserve Interest Rate" will be either (A) the rate per annum
which the Trustee determines to be the arithmetic mean (rounding such
arithmetic mean if necessary to the nearest five decimal places) of the
one-month Eurodollar lending rates that New York City banks selected by
the Depositor are quoting, on the relevant LIBOR Determination Date, to
the principal London offices of at least two leading banks in the London
interbank market or (B) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month Eurodollar lending rate that
the New York City banks selected by the Depositor are quoting on such
LIBOR Determination Date to leading European banks; and
(iii) If on any LIBOR Determination Date the Trustee is required but
is unable to determine the Reserve Interest Rate in the manner provided
in paragraph (ii) above, LIBOR for the next Accrual Period will be LIBOR
as determined on the previous LIBOR Determination Date or, in the case of
the first LIBOR Determination Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate Interest Rate (or Rates) applicable
to the LIBOR Certificates for the relevant Accrual Period, in the absence of
manifest error, will be final and binding. In all cases, the Trustee may
conclusively rely on quotations of LIBOR for the Reference Banks as such
quotations appear on the display designated "LIUS01M" on the Bloomberg
Financial Markets Commodities News and on other quotations, if any, obtained
by the Trustee pursuant to clauses (a)(ii) and (d) of this Section 4.02.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) whose quotations appear on the "Bloomberg Screen LIUS01M Index
Page" (as described in the definition of LIBOR) on the applicable LIBOR
Determination Date and (iii) which have been designated as such by the
Depositor and are able and willing to provide such quotations to the Trustee
on each LIBOR Determination Date. The Reference Banks initially shall be:
Barclay's plc, Bank of Tokyo, National Westminster Bank and Trust Company and
Bankers Trust Company. If any of the initial Reference Banks should be removed
from the Bloomberg Screen LIUS01M Index Page or in any other way fail to meet
the qualifications of a Reference Bank, the Depositor shall use its best
efforts to designate alternate Reference Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date LIBOR would, without giving effect to this
paragraph (d), be determined pursuant to such clause (a)(iii), then the
Trustee shall select an alternative interest rate index over which the Trustee
has no control that is used for determining Eurodollar lending rates and is
calculated and published (or otherwise made available) by an independent third
party, and such alternative interest rate index shall constitute LIBOR for all
purposes hereof.
SECTION 4.03. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Trustee shall prepare
(on the basis of information obtained by the Servicer) and the Trustee shall
cause to be forwarded by mail to each Certificateholder, the Servicer, the
Depositor, Bloomberg, and the Rating Agencies a statement setting forth the
following information as to each Class of Certificates to the extent received
from the Servicer.
(i) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates, to the
extent applicable, allocable to principal on the Mortgage Loans,
including Liquidation Proceeds and Insurance Proceeds, stating separately
the amount attributable to scheduled principal payments and unscheduled
payments in the nature of principal;
(ii) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates (or
Component thereof) allocable to interest;
(iii) (A) the aggregate amount of any Monthly Advances required to
be made by or on behalf of the Servicer with respect to such Distribution
Date, (B) the aggregate amount of such Monthly Advances actually made,
and (C) the amount, if any, by which (A) above exceeds (B) above;
(iv) the Aggregate Loan Balance as of the close of business on the
last day of the related Due Period, after giving effect to payments
allocated to principal reported under clause (i) above;
(v) the Class Principal Amount or Component Principal Amount of each
Class of Certificates, to the extent applicable, as of such Distribution
Date after giving effect to payments allocated to principal reported
under clause (i) above, separately identifying any reduction of any of
the foregoing Certificate Principal Amounts or Component Principal Amount
due to Applied Loss Amounts;
(vi) any Realized Losses realized with respect to the Mortgage Loans
in (x) in the applicable Prepayment Period and (y) in the aggregate since
the Cut-off Date;
(vii) the amount of the Servicing Fees retained by the Servicer
during the Due Period to which such distribution relates;
(viii) the number and aggregate Scheduled Principal Balance of
Mortgage Loans, as reported to the Trustee by the Servicer, (a) remaining
outstanding (b) delinquent 30 to 59 days on a contractual basis, (c)
delinquent 60 to 89 days on a contractual basis, (d) delinquent 90 or
more days on a contractual basis, and (e) as to which foreclosure
proceedings have been commenced as of the close of business on the last
Business Day of the calendar month immediately preceding the month in
which such Distribution Date occurs;
(ix) the book value (within the meaning of 12 C.F.R. Section 571.13
or comparable provision) of each REO Property as of the close of business
on the last Business Day of the calendar month immediately preceding the
month in which such Distribution Date occurs;
(x) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the principal balance of such
Mortgage Loan and the number of such Mortgage Loans as of the close of
business on the Distribution Date in such preceding month;
(xi) with respect to replacement of Mortgage Loans in the preceding
calendar month, the Scheduled Principal Balance of each Deleted Mortgage
Loan and of each Replacement Mortgage Loan;
(xii) the aggregate outstanding Carryforward Interest, Net
Prepayment Interest Shortfalls, Basis Risk Shortfalls and Unpaid Basis
Risk Shortfalls, if any, if any, for each Class of Certificates, after
giving effect to the distribution made on such Distribution Date;
(xiii) the Certificate Interest Rate applicable to such Distribution
Date with respect to each Class of Certificates; and
(xiv) the amount on deposit in the Basis Risk Reserve Fund
immediately prior to the related Distribution Date and the amount of any
Required Reserve Fund Deposit to be made thereto on such Distribution
Date in order to satisfy the Reserve Fund Requirement and the amount of
distributions to be made therefrom pursuant to Section 5.02(d) on such
Distribution Date.
In the case of information furnished pursuant to subclauses (i),
(ii) and (vi) above, the amounts shall be expressed as a dollar amount per
$1,000 of original principal amount of Certificates.
(b) Upon reasonable advance notice in writing, if required by
federal regulation, the Trustee will provide to each Certificateholder that is
a savings association, bank or insurance company certain reports and access to
information and documentation regarding the Mortgage Loans sufficient to
permit such Certificateholder to comply with applicable regulations of the
Office of Thrift Supervision or other regulatory authorities with respect to
investment in the Certificates and the Servicer shall cooperate with the
Trustee in providing such information; provided, however, that the Trustee
shall be entitled to be reimbursed by each such Certificateholder for the
Trustee's actual expenses incurred in providing such reports and access. The
Trustee will provide to any Certificateholder upon request the outstanding
Certificate Principal Amounts as of the date requested and, if then known by
the Trustee, the outstanding Certificate Principal Amount after giving effect
to any distribution to be made on the next following Distribution Date.
(c) Upon the written request of any Certificateholder, the Trustee,
as soon as reasonably practicable, shall provide the Certificateholder with
such information as has been provided by the Depositor to the Trustee, for
purposes of satisfying applicable information reporting requirements under
Rule 144A.
(d) Within 90 days, or such shorter period as may be required by
statute or regulation, after the end of each calendar year, the Trustee shall
send to each Person who at any time during the calendar year was a
Certificateholder of record, and make available to each Beneficial Holder
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to Certificateholders
pursuant to Section 4.03(a) on an annual basis as may be required to enable
such Holders to prepare their federal income tax returns. Such information
shall include the amount of original issue discount accrued on each Class of
Certificates and information regarding the expenses of the Trust Fund. The
Servicer shall provide the Trustee with such information as is necessary for
the Trustee to prepare such reports.
ARTICLE V
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 5.01. Distributions Generally.
(a) Subject to Section 10.01 respecting the final distribution on
the Certificates, on each Distribution Date the Trustee shall make
distributions in accordance with this Article V. Such distributions shall be
made by check mailed to each Certificateholder's address as it appears on the
Certificate Register of the Certificate Registrar (which shall initially be
the Trustee) or, upon written request made to the Trustee at least five
Business Days prior to the related Record Date by any Certificateholder owning
an aggregate initial Certificate Principal Amount of at least $2,500,000, or,
in the case of a Class R Certificate, a Percentage Interest of 100%, by wire
transfer in immediately available funds to an account specified in the request
and at the expense of such Certificateholder; provided, however, that the
final distribution in respect of any Certificate shall be made only upon
presentation and surrender of such Certificate at the Corporate Trust Office.
Wire transfers will be made at the expense of the Holder requesting such wire
transfer by deducting a wire transfer fee from the related distribution.
Notwithstanding such final payment of principal of any of the Certificates,
the Residual Certificate will remain outstanding until the termination of each
REMIC and the payment in full of all other amounts due with respect to such
Certificates and at such time such final payment in retirement of any Residual
Certificate will be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office or at the office of the Trustee's
New York presenting agent. If any payment required to be made on the
Certificates is to be made on a day that is not a Business Day, then such
payment will be made on the next succeeding Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Principal Amounts or Component
Principal Amounts (or Percentage Interests).
SECTION 5.02. Distributions from the Certificate Account.
(a) On each Distribution Date the Trustee shall withdraw from the
Certificate Account the Total Distribution Amount for such date, shall
allocate such amount to the interests issued in respect of each REMIC and
shall distribute such amount as specified in this Section.
(b) On each Distribution Date, the Trustee shall distribute the
Interest Remittance Amount for such date in the following order of priority:
(i) to the Trustee, the Trustee Fee for such Distribution Date;
(ii) pro rata, on the basis of interest otherwise payable thereto,
to the Class A1 Certificates and the Class A2 Certificates, Current
Interest for each such Class and such Distribution Date and any
Carryforward Interest for each such Class and such Distribution Date;
provided, however, that such amount otherwise distributable to the A2-2
Component shall be reduced by the amount of any Basis Risk Payments for
such date, which payments shall be deposited in the Basis Risk Reserve
Fund;
(iii) to the Class M1 Certificates, Current Interest for such Class
and such Distribution Date;
(iv) to the Class M2 Certificates, Current Interest for such Class
and such Distribution Date;
(v) to the Class M3 Certificates, Current Interest for such Class
and such Distribution Date;
(vi) to the Class B1 Certificates, Current Interest for such Class
and such Distribution Date;
(vii) to the Class B2 Certificates, Current Interest for such Class
and such Distribution Date;
(viii) to the Class B3 Certificates, Current Interest for such Class
and such Distribution Date; and
(ix) to the Class R Certificates.
(c) On each Distribution Date, the Trustee shall distribute the
Principal Remittance Amount for such date as follows:
(i) On each Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has occurred, the Trustee will make
the following distributions of the Principal Remittance Amount,
sequentially, in the following order of priority:
(A) to the Class A1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(B) to the A2-1 Component of the Class A2 Certificates, until
the Class Principal Amount of such Class has been reduced to zero;
(C) to the Class M1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(D) to the Class M2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(E) to the Class M3 Certificates, until the Class Principal
Amount has been reduced to zero;
(F) to the Class B1 Certificates, until the Class Principal
Amount of such Class has been reduced to zero;
(G) to the Class B2 Certificates, until the Class Principal
Amount of such Class has been reduced to zero; and
(H) to the Class B3 Certificates, until the Class Principal
Amount of such Class has been reduced to zero.
(ii) On each Distribution Date (a) on or after the Stepdown Date and
(b) with respect to which a Trigger Event has not occurred, the Principal
Remittance Amount for such date will be distributed, sequentially, in the
following order of priority:
(1) to the Senior Certificates, the Senior Principal
Distribution Amount for such Distribution Date; provided,
however, that such amount shall be applied first, to the Class
A1 Certificates, until the Class Principal Amount thereof has
been reduced to zero and second, to the Class A2 Certificates,
until the Component Principal Amount thereof has been reduced
to zero;
(2) to the Class M1 Certificates, an amount equal to the
lesser of (x) the excess of (a) the Principal Remittance Amount
over (b) the amount distributed to the Senior Certificates on
such date pursuant to clause (1) above, and (y) the M1
Principal Distribution Amount for such date, until the Class
Principal Amount of such Class has been reduced to zero;
(3) to the Class M2 Certificates, an amount equal to the
lesser of (x) the excess of (a) the Principal Remittance Amount
for such Distribution Date over (b) the amount distributed to
the Senior Certificates and the Class M1 Certificates on such
date pursuant to clauses (1) and (2) above, and (y) the M2
Principal Distribution Amount for such date, until the Class
Principal Amount of such Class has been reduced to zero;
(4) to the Class M3 Certificates, an amount equal to the
lesser of (x) the excess of (a) the Principal Remittance Amount
for such Distribution Date over (b) the amount distributed to
the Senior Certificates, the Class M1 and Class M2 Certificates
on such date pursuant to clauses (1) through (3) above, and (y)
the M3 Principal Distribution Amount for such date, until the
Class Principal Amount of such Class has been reduced to zero;
(5) to the Class B1 Certificates, an amount equal to the
lesser of (x) the excess of (a) the Principal Remittance Amount
for such Distribution Date over (b) the amount distributed to
the Senior Certificates, the Class M1, Class M2 and Class M3
Certificates on such date pursuant to clauses (1) through (4)
above, and (y) the B1 Principal Distribution Amount for such
date, until the Class Principal Amount of such Class has been
reduced to zero;
(6) to the Class B2 Certificates, an amount equal to the
lesser of (x) the excess of (a) the Principal Remittance Amount
for such Distribution Date over (b) the amount distributed to
the Senior Certificates, the Class M1, Class M2, Class M3 and
the Class B1 Certificates pursuant to clauses (1) through (5)
above, and (y) the B2 Principal Distribution Amount for such
date, until the Class Principal Amount of such Class has been
reduced to zero. On each Distribution Date following the
Stepdown Date (and so long as a Trigger Event is not in effect)
any Principal Remittance Amount remaining after distribution of
the B2 Principal Distribution Amount will be distributed to the
Class B2 Certificates, until the Class Principal Amount thereof
has been reduced to zero and then to the lowest ranking Class
of Certificates outstanding (other than the Class B3
Certificates) until the Class Principal Amount of such Class
has been reduced to zero; and
(7) on and after the Distribution Date on which the Class
Principal Amount (or Component Principal Amount) of the Senior
Certificates, the Class M1, Class M2, Class M3, Class B1 and
Class B2 Certificates has been reduced to zero, to the Class B3
Certificates, until the Class Principal Amount of such Class
has been reduced to zero.
Notwithstanding the foregoing, on any Distribution Date on which the
Class Principal Amount of each Class of Certificates having a higher
priority of distribution has been reduced to zero, any remaining
Principal Remittance Amount will be distributed to the remaining
Certificates in the order of priority set forth above until the Class
Principal Amount of each such Class has been reduced to zero.
(d) On each Distribution Date the Trustee shall make distributions
from amounts on deposit in the Basis Risk Reserve Fund in the following order
of priority:
(i) to the Class A1 Certificates, the amount of any Basis Risk
Shortfall or Unpaid Basis Risk Shortfall, in each case for such date;
(ii) to the Class M1 Certificates, the amount of any Basis Risk
Shortfall or Unpaid Basis Risk Shortfall, in each case for such date;
(iii) to the Class M2 Certificates, the amount of any Basis Risk
Shortfall or Unpaid Basis Risk Shortfall, in each case for such date;
(iv) to the Class M3 Certificates, the amount of any Basis Risk
Shortfall or Unpaid Basis Risk Shortfall, in each case for such date;
(v) to the Class B1 Certificates, the amount of any Basis Risk
Shortfall or Unpaid Basis Risk Shortfall, in each case for such date;
(vi) to the Class B2 Certificates, the amount of any Basis Risk
Shortfall or Unpaid Basis Risk Shortfall, in each case for such date; and
(vii) to the Class A2 Certificateholder, any amounts in the Basis
Risk Reserve Fund in excess of the Reserve Fund Requirement for such
Distribution Date.
SECTION 5.03. Allocation of Losses.
On each Distribution Date, the Class Principal Amounts of the Class
M1, Class M2, Class M3, Class B1, Class B2 and Class B3 Certificates will be
reduced by the amount of any Applied Loss Amount for such date, in the
following order of priority:
(i) to the Class B3 Certificates, until the Class Principal Amount
thereof has been reduced to zero;
(ii) to the Class B2 Certificates, until the Class Principal Amount
thereof has been reduced to zero;
(iii) to the Class B1 Certificates, until the Class Principal Amount
thereof has been reduced to zero;
(iv) to the Class M3 Certificates, until the Class Principal Amount
thereof has been reduced to zero;
(v) to the Class M2 Certificates, until the Class Principal Amount
thereof has been reduced to zero; and
(vi) to the Class M1 Certificates, until the Class Principal Amount
thereof has been reduced to zero.
SECTION 5.04. Monthly Advances by the Servicer.
(a) Subject to the conditions of this Article V, the Servicer, as
required below, on each Servicer Advance Date shall make an advance (a
"Monthly Advance") to the Certificate Account, in the amount, if any, of the
aggregate Monthly Payments less Net Prepayment Interest Shortfalls and Relief
Act Shortfalls, after adjustment of the interest portion of each such Monthly
Payment to the Net Mortgage Rate, on the Mortgage Loans that were due on the
Due Date but that were not received and remitted to the Certificate Account on
or prior to such Servicer Advance Date. The Servicer shall be obligated to
make any such Monthly Advance only to the extent that such advance, in the
good faith judgment of the Servicer, will not be a Nonrecoverable Advance.
(b) On the Determination Date immediately preceding the related
Distribution Date, the Servicer shall determine whether and to what extent any
Mortgagor has failed to make any Monthly Payment due on the Due Date and
whether such deficiencies, if advanced by the Servicer, would be a
Nonrecoverable Advance. If the Servicer shall have determined that it is not
obligated to make the entire Monthly Advance because all or a lesser portion
of such Monthly Advance would not be recoverable by the Servicer from related
Insurance Proceeds or Liquidation Proceeds (net of Liquidation Expenses), the
Servicer shall deliver to the Trustee, not less than one Business Day after
the related Determination Date, for the benefit of the Certificateholders, a
certificate of a Servicing Officer setting forth the reasons for such
determination.
(c) In lieu of making all or a portion of any Monthly Advance, the
Servicer may cause to be made an appropriate entry in its records relating to
the Custodial Account that funds in such account, including but not limited to
any amounts received in respect of scheduled principal and interest on any
Mortgage due after the related Due Period, in excess of the Total Distribution
Amount (less the amount of such Monthly Advance) for the related Distribution
Date have been used by the Servicer in discharge of its obligation to make any
such Monthly Advance. Any funds so applied shall be replaced by the Servicer
by deposit, in the manner set forth above, in the Custodial Account no later
than the next Servicer Advance Date to the extent that funds in the Custodial
Account on such date are less than the amounts required to be distributed on
the related Distribution Date. The Servicer shall be entitled to be reimbursed
from the Custodial Account and the Certificate Account for all Monthly
Advances of its own funds made pursuant to this Section as provided in Section
3.09 and 4.01.
SECTION 5.05. Advances for Attorneys' Fees.
The Servicer shall make advances from time to time for attorneys'
fees and court costs incurred, or which reasonably can be expected to be
incurred, for the foreclosure of any Mortgage Loan or for any transaction in
which the Trustee for the benefit of the Certificateholders is expected to
receive a deed-in-lieu of foreclosure, unless the Servicer has made a good
faith determination that such advances would be Nonrecoverable Advances. If
the Servicer shall make a good faith determination that such advances would
not be so recoverable, the Servicer shall promptly deliver to the Trustee a
Certificate of a Servicing Officer setting forth the reasons for such
determination. The Servicer shall be entitled to reimbursement for any such
advance as provided in Section 3.09 hereof.
SECTION 5.06. Nonrecoverable Advances.
The determination by the Servicer that it has made a Nonrecoverable
Advance shall be evidenced by a certificate of a Servicing Officer promptly
delivered to the Trustee setting forth the reasons for such determination.
Following the Trustee's receipt of such certificate, the Servicer shall be
entitled to reimbursement for such Nonrecoverable Advance as provided in
Section 3.09 and 4.01 hereof.
SECTION 5.07. Advance Procedures.
(a) If, on any Determination Date, the Servicer determines to make a
Monthly Advance in accordance with Section 5.04, it shall make such Monthly
Advance on or before noon, New York time, on the Business Day prior to the
related Distribution Date (the "Servicer Advance Date"). The Servicer shall
notify the Trustee of the aggregate amount of Monthly Advances for a
Distribution Date on or before three Business Days prior to such Distribution
Date. Any such Monthly Advance shall be included with the distribution on the
related Distribution Date pursuant to Section 5.02.
(b) In the event that the Servicer fails to make a Monthly Advance
required to be made pursuant to Section 5.04 on or before the close of
business, on the Servicer Advance Date, the Trustee shall on or before 12
noon, New York time on the next Business Day provide notice to the Servicer,
by telephone and by writing (which may be by telecopy) of such failure and the
amount of such failure and that continuance of such failure for a period of
one Business Day thereafter will be an Event of Default.
SECTION 5.08. Basis Risk Reserve Fund.
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the holders of the LIBOR Certificates, a
Basis Risk Reserve Fund, into which the Depositor shall deposit $5,000. The
Basis Risk Reserve Fund shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled
with, any other moneys, including, without limitation, other moneys of the
Trustee held pursuant to this Agreement.
(b) The Trustee shall make withdrawals from the Basis Risk Reserve
Fund to make distributions pursuant to Section 5.02(d).
(c) Funds in the Basis Risk Reserve Fund shall be invested in
Eligible Investments. Any earnings on such amounts shall be distributed to the
related Class A2 Certificates. The Class A2 Certificate shall evidence
ownership of the Basis Risk Reserve Fund for federal income tax purposes and
the Holder thereof shall direct the Trustee, in writing no later than the
Settlement Date or any transfer date of such Class A2 Certificates, as to
investment of amounts on deposit therein. In the absence of such instructions,
amounts in the Basis Risk Reserve Fund may remain uninvested or be invested in
Eligible Investments selected by the Trustee in its sole discretion. The Class
A2 Certificateholder shall be liable for any losses incurred on such
investments. In the absence of written instructions from the Class A2
Certificateholder as to investment of funds on deposit in the Basis Risk
Reserve Fund, such funds shall be invested in accordance with the directions
of the Depositor. Any amounts on deposit in the Basis Risk Reserve Fund in
excess of the Reserve Fund Requirement on any Distribution Date shall be
distributed to the Class A2 Certificate on such Distribution Date.
(d) Upon termination of the Trust Fund, any amounts remaining in the
Basis Risk Reserve Fund shall be distributed to the Class A2
Certificateholder.
ARTICLE VI
THE CERTIFICATES
SECTION 6.01. The Certificates.
(a) The Certificates shall be in substantially the forms set forth
in Exhibits A, B, C and D hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Agreement or as may in the reasonable judgment of the Trustee or the Depositor
be necessary, appropriate or convenient to comply, or facilitate compliance,
with applicable laws, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which any of
the Certificates may be listed, or as may, consistently herewith, be
determined by the officers executing such Certificates, as evidenced by their
execution thereof.
(b) The Definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or
may be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
(c) Each Class of Book-Entry Certificates will be evidenced by one
or more certificates, beneficial ownership of which will be held in the dollar
denominations in Certificate Principal Amount specified in this paragraph.
Each Class of Book-Entry Certificates will be issued in minimum denominations
of a $25,000 Certificate Principal Amount and integral multiples of $1,000 in
excess thereof, except for the Class B Certificates which will be issued in
minimum denominations of $100,000 Certificate Principal Amount and integral
multiples of $1,000 in excess thereof. The Class R Certificates will be issued
as a single Certificate and maintained in definitive, fully registered form in
a minimum denomination equal to 100% of the Percentage Interest of such Class.
One Certificate of each Class of Certificates other than the Class R
Certificates may be issued in any denomination in excess of the minimum
denomination.
(d) The Certificates shall be executed by manual or facsimile
signature on behalf of the Trust Fund by the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trustee shall bind the Trust Fund, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of such Certificates or did not hold such offices
at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication executed by the
Trustee by manual signature, and such certificate of authentication upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 6.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained, a
Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. Upon
surrender for registration of transfer of any Certificate, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in like aggregate interest and of
the same Class.
(b) At the option of a Certificateholder, Certificates (other than
Book-Entry Certificates which shall be subject to Section 6.07 hereof) may be
exchanged for other Certificates of authorized denominations and the same
aggregate interest in the Trust Fund and of the same Class, upon surrender of
the Certificates to be exchanged at the office or agency of the Trustee in the
City of New York at 123 Washington Street, New York, New York 10006 where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee will give prompt written notice to Certificateholders of any change in
the location of the any such office or agency. The Certificate Register will
be kept in Santa Ana, California at the offices of the Trustee located at the
Corporate Trust Office and may be kept in an electronic form capable of
printing out a hard copy of the Certificate Register. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the Holder thereof or his attorney duly authorized in writing.
(c) All Certificates surrendered for registration of transfer and
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(d) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein. With respect to the transfer and registration of transfer of a
Restricted Certificate to a transferee that takes delivery in the form of a
Definitive Certificate, the Trustee shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor or
the Placement Agent, an affiliate (as defined in Rule 405 under the 1933 Act)
of the Depositor or the Placement Agent or (y) being made to a "qualified
institutional buyer" (a "QIB") as defined in Rule 144A under the 1933 Act by a
transferor that has provided the Trustee with a certificate in the form of
Exhibit H hereto.
(e) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person unless the Trustee has
received (A) a certificate substantially in the form of Exhibit I hereto from
such transferee or (B) an Opinion of Counsel satisfactory to the Trustee and
the Depositor to the effect that the purchase and holding of such a
Certificate will not constitute or result in the assets of the Trust Fund
being deemed to be "plan assets" subject to the prohibited transactions
provisions of ERISA or Section 4975 of the Code and will not subject the
Trustee or the Depositor to any obligation in addition to those undertaken in
the Agreement; provided, however, that the Trustee will not require such
certificate or opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Trustee has rendered an opinion to the
effect that the purchase and holding of an ERISA-Restricted Certificate by a
Plan or a Person that is purchasing or holding such a Certificate with the
assets of a Plan will not constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code. The preparation and delivery of the
certificate and opinions referred to above shall not be an expense of the
Trust Fund, the Trustee or the Depositor. Notwithstanding the foregoing, no
opinion or certificate shall be required for the initial issuance of the
ERISA-Restricted Certificates.
(f) As a condition of the registration of transfer or exchange of
any Certificate, the Trustee may require the certified taxpayer identification
number of the owner of the Certificate and the payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith;
provided, however, that the Trustee shall have no obligation to require such
payment or to determine whether or not any such tax or charge may be
applicable. No service charge shall be made to the Certificateholder for any
registration, transfer or exchange of Certificate.
(g) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to (i) a Disqualified Organization or (ii) an individual,
corporation or partnership or other person unless such person is (A) not a
Non-U.S. Person or (B) is a Non-U.S. Person that holds a Residual Certificate
in connection with the conduct of a trade or business within the United States
and has furnished the transferor and the Trustee with an effective Internal
Revenue Service Form 4224 or successor form at the time and in the manner
required by the Code (any such person who is not covered by clause (A) or (B)
above is referred to herein as a "Non-permitted Foreign Holder").
Prior to and as a condition of the registration of any transfer,
sale or other disposition of a Residual Certificate, the proposed transferee
shall deliver to the Trustee an affidavit in substantially the form attached
hereto as Exhibit J-1 representing and warranting, among other things, that
such transferee is (i) neither a Disqualified Organization, an agent or
nominee acting on behalf of a Disqualified Organization, nor a Non-permitted
Foreign Holder (any such transferee, a "Permitted Transferee") and (ii) a QIB
or either the Depositor or an affiliate (as defined in Rule 405 under the 1933
Act) thereof and the proposed transferor shall deliver to the Trustee an
affidavit in substantially the form attached hereto as Exhibit J-2. In
addition, the Trustee may (but shall have no obligation to) require, prior to
and as a condition of any such transfer, the delivery by the proposed
transferee of an Opinion of Counsel, addressed to the Depositor and the
Trustee satisfactory in form and substance to the Depositor, that such
proposed transferee or, if the proposed transferee is an agent or nominee, the
proposed beneficial owner, is not a Disqualified Organization, agent or
nominee thereof, or Non-permitted Foreign Holder. Notwithstanding the
registration in the Certificate Register of any transfer, sale, or other
disposition of a Residual Certificate to a Disqualified Organization, an agent
or nominee thereof, or Non-permitted Foreign Holder, such registration shall
be deemed to be of no legal force or effect whatsoever and such Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder shall
not be deemed to be a Certificateholder for any purpose hereunder, including,
but not limited to, the receipt of distributions on such Residual Certificate.
The Trustee shall not be under any liability to any person for any
registration or transfer of a Residual Certificate to a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder or for
the maturity of any payments due on such Residual Certificate to the Holder
thereof or for taking any other action with respect to such Holder under the
provisions of the Agreement, so long as the transfer was effected in
accordance with this Section 6.02(g), unless the Trustee shall have actual
knowledge at the time of such transfer or the time of such payment or other
action that the transferee is a Disqualified Organization, agent or nominee
thereof, or Non-permitted Foreign Holder. The Trustee shall be entitled to
recover from any Holder of a Residual Certificate that was a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder at the
time it became a Holder or any subsequent time it became a Disqualified
Organization, agent or nominee thereof, or Non-permitted Foreign Holder, all
payments made on such Residual Certificate at and after either such times (and
all costs and expenses, including but not limited to attorneys' fees, incurred
in connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Trustee shall be paid and delivered to the last
preceding Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 6.02(g),
then upon receipt of written notice to the Trustee that the registration of
transfer of such Residual Certificate was not in fact permitted by this
Section 6.02(g), the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of such registration of
transfer of such Residual Certificate. The Trustee shall be under no liability
to any Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section 6.02(g), for making any payment due
on such Certificate to the registered Holder thereof or for taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered upon receipt of the affidavit described in
the preceding paragraph of this Section 6.02(g).
(g) Each Holder of a Residual Certificate, by such Holder's
acceptance thereof, shall be deemed for all purposes to have consented to the
provisions of this section.
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Servicer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and interest in the Trust Fund. In connection with the issuance of any
new Certificate under this Section 6.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section 6.03 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 6.04. Persons Deemed Owners.
Subject to the provisions of Section 6.07 with respect to any
Book-Entry Certificates, prior to due presentation of a Certificate for
registration of transfer, the Servicer, the Trustee, and any agent of the
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Servicer, the Trustee nor any agent of the
Servicer or the Trustee shall be affected by any notice to the contrary.
SECTION 6.05. Access to List of Certificateholders' Names and Addresses.
(a) If three or more Certificateholders (i) request in writing from
the Trustee a list of the names and addresses of Certificateholders, (ii)
state that such Certificateholders desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and (iii) provide a copy of the communication which such
Certificateholders propose to transmit, then the Trustee shall, within ten
Business Days after the receipt of such request, afford such
Certificateholders access during normal business hours to a current list of
the Certificateholders. The expense of providing any such information
requested by a Certificateholder shall be borne by the Certificateholders
requesting such information and shall not be borne by the Trustee. Every
Certificateholder, by receiving and holding a Certificate, agrees that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
(b) The Servicer, so long as it is the Servicer hereunder, shall
have unlimited access to a list of the names and addresses of the
Certificateholders which list shall be provided by the Trustee promptly upon
the request of the Servicer.
SECTION 6.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense
an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustee in respect of the Certificates and this
Agreement may be served. The Trustee initially designates its office at 123
Washington Street, New York, New York 10006 as its office for such purpose.
The Trustee will give prompt written notice to the Certificateholders of any
change in the location of any such office or agency.
SECTION 6.07. Book-Entry Certificates.
(a) Each class of Book-Entry Certificates, upon original issuance,
shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to DTC, the initial
Clearing Agency, by, or on behalf of, the Depositor. The Book-Entry
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of DTC, and no Beneficial Holder will receive a definitive
certificate representing such Beneficial Holder's interest in the Book-Entry
Certificates, except as provided in Section 6.09. Unless and until Definitive
Certificates have been issued to the Beneficial Holders pursuant to Section
6.09:
(i) the provisions of this Section 6.07 shall be in full force and
effect with respect to such Book-Entry Certificates;
(ii) the Depositor and the Trustee may deal with the Clearing Agency
for all purposes with respect to such Book-Entry Certificates (including
the making of distributions on such Certificates) as the sole Holder of
such Certificates;
(iii) to the extent that the provisions of this Section 6.07
conflict with any other provisions of this Agreement, the provisions of
this Section 6.07 shall control;
(iv) the rights of the Beneficial Holders of such Book-Entry
Certificates shall be exercised only through the Clearing Agency and the
Participants and shall be limited to those established by law and
agreements between such Beneficial Holders and the Clearing Agency and/or
the Participants. Pursuant to the Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 6.09, the initial
Clearing Agency will make book-entry transfers among the Participants and
receive and transmit distributions of principal and interest on the
related Certificates to such Participants;
(v) any transferee of a beneficial interest in a Restricted
Certificate in the form of a Book-Entry Certificate will be deemed to
have made one of the representations set forth in Exhibit H hereto and if
any purported transferee shall become a registered Holder of a Restricted
Certificate in violation of such representations, then the last preceding
qualified transferee shall be deemed restored to all rights as Holder
thereof retroactive to the date of such transfer of such Restricted
Certificate; and
(vi) any transferee of a beneficial interest in an ERISA-Restricted
Certificate in the form of a Book-Entry Certificate will be deemed to
have made one of the representations set forth in Exhibit I hereto,
unless the Trustee has received an opinion of counsel referred to in
Section 6.02(e) and if any purported transferee shall become a registered
Holder of an ERISA-Restricted Certificate in violation of such
representations, then the last preceding qualified transferee shall be
deemed restored to all rights as Holder thereof retroactive to the date
of such transfer of such ERISA-Restricted Certificate.
(b) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
each Class of such Book-Entry Certificates evidencing a specified percentage
of the aggregate unpaid principal amount of such Certificates, such direction
or consent may be given by the Clearing Agency at the direction of Beneficial
Holders owning such Certificates evidencing the requisite percentage of
principal amount of such Certificates. The Clearing Agency may take
conflicting actions with respect to each Class of such Book-Entry Certificates
to the extent that such actions are taken on behalf of the Beneficial Holders.
SECTION 6.08. Notices to Clearing Agency.
Whenever notice or other communication to the Holders of each Class
of Book-Entry Certificates is required under this Agreement, unless and until
Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 6.09, the Trustee shall give all such
notices and communications specified herein to be given to Holders of each
Class of the Book-Entry Certificates to the Clearing Agency which shall give
such notices and communications to the related Participants in accordance with
its applicable rules, regulations and procedures.
SECTION 6.09. Definitive Certificates.
If (a) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities under the Depository Agreement with respect to the
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its option, advises the Trustee in writing
that it elects to terminate the book-entry system with respect to any or all
of the Book-Entry Certificates through the Clearing Agency or (c) after the
occurrence of an Event of Default, Holders of each Class of Book-Entry
Certificates evidencing not less than 66-2/3% of the aggregate Certificate
Principal Amount of such Class of the Book-Entry Certificates advise the
Trustee in writing that the continuation of a book-entry system with respect
to the such Certificates through the Clearing Agency is no longer in the best
interests of the Holders of such Certificates with respect to such Class of
the Book-Entry Certificates, the Trustee shall notify all Holders of such
Certificates of the occurrence of any such event and the availability of
Definitive Certificates. Upon surrender to the Trustee of the such
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall authenticate and
deliver the Definitive Certificates. Neither the Depositor nor the Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the Trustee shall
recognize the Holders of Definitive Certificates as Certificateholders
hereunder.
ARTICLE VII
THE DEPOSITOR, SELLER AND THE SERVICER
SECTION 7.01. Liabilities of the Depositor, Seller and the Servicer.
(a) The Depositor, Seller and the Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
(b) It is understood and agreed that the obligation under this
Agreement of the Seller or the Servicer to repurchase or substitute any
Mortgage Loan as to which any breach of representation or warranty or other
obligation contained in Section 2.01, 2.02, 2.03, 2.04 or 3.12 of this
Agreement or in Section 2 of the Mortgage Loan Purchase Agreement has occurred
and is continuing shall constitute the sole and exclusive remedy respecting
such breach available to the Depositor, the Certificateholders or the Trustee
on their behalf so long as the Seller repurchases or substitutes any such
Mortgage Loan. Neither the Certificateholders nor the Trustee on their behalf
shall be entitled to any consequential damages.
(c) Without limiting the effect of Section 7.01(b), the Servicer
shall defend and indemnify the Trust Fund, the Trustee, the Depositor, the
Certificate Registrar, the Seller and the Certificateholders against any and
all costs, expenses, losses, damages, claims or liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, arising
from third party claims or actions (including penalties or fees imposed by any
governmental or regulatory body or agency) in respect of any breach of the
Servicer's covenants, representations or warranties set forth herein or in
respect of any action taken or omitted by the Servicer with respect to any
Mortgage Loan constituting a failure by the Servicer to perform its
obligations under this Agreement. This indemnity shall survive any Event of
Default (but a Servicer's obligations under this Section 7.01 shall not relate
to any actions of any predecessor or subsequent Servicer after an Event of
Default) and any payment of the amount owing under, or any repurchase by the
Servicer of, any such Mortgage Loan.
(d) Without limiting the effect of Section 7.01(b), the Seller shall
defend and indemnify the Trust Fund, the Trustee, the Depositor, the
Certificate Registrar, the Servicer and the Certificateholders against any and
all costs, expenses, losses, damages, claims or liabilities, including
reasonable fees and expenses of counsel and expenses of litigation, arising
from third party claims or actions (including penalties or fees imposed by any
governmental or regulatory body or agency) in respect of any breach of the
Seller's covenants, representations or warranties set forth herein or in
respect of any action taken or omitted by the Seller with respect to any
Mortgage Loan constituting a failure by the Seller to perform its obligations
under this Agreement. This indemnity shall survive any payment of the amount
owing under, or any repurchase by the Seller of, any such Mortgage Loan.
(e) Any amounts received by the Trustee from the Seller or Servicer
on behalf of the Trust Fund pursuant to this Article VII shall be deposited in
the Certificate Account and shall be distributed as part of the Total
Distribution Amount. If either the Seller or the Servicer has made any
indemnity payments to the Trustee pursuant to this Article VII and the Trustee
thereafter collects any of such amounts from others, the Trustee will repay
such amounts collected to the Seller or Servicer, as applicable, together with
any interest collected thereon.
SECTION 7.02. Merger or Consolidation of the Depositor, the Seller or the
Servicer.
(a) Subject to Section 7.02(b), the Depositor, the Seller and the
Servicer will each do or cause to be done all things necessary to preserve and
keep in full force and effect its existence, rights and franchises (charter
and statutory) 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, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) Any of the Seller, the Servicer or the Depositor may merge or
consolidate with any Person, and any Person into which the Seller, the
Servicer or the Depositor may be merged or consolidated, or any Person
resulting from any merger or consolidation to which the Seller or the Servicer
shall be a party, or any Person succeeding to the business of the Seller,
Servicer or the Depositor, shall be the successor of the Seller, the Servicer
or the Depositor, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however,
that the successor or surviving Person to the Servicer shall be qualified to
sell mortgage loans to, and to service mortgage loans on behalf of, Fannie Mae
or Freddie Mac.
(c) Notwithstanding anything else in this Section 7.02 or in Section
7.04 hereof to the contrary, the Servicer may assign its rights and delegate
its duties and obligations under this Agreement (except for the obligation of
the Servicer or Seller to effectuate repurchases or substitutions of Mortgage
Loans hereunder, including pursuant to Section 2.01, 2.02 or 2.04 hereof,
which shall remain with Washington Mutual hereunder); provided, however, that
the Servicer gives the Depositor and the Trustee notice of such assignment;
and provided further, that such purchaser or transferee accepting such
assignment and delegation shall be an institution that is a Fannie Mae and
Freddie Mac approved seller/servicer in good standing, which has a net worth
of at least $15,000,000, and which is willing to service the Mortgage Loans
and executes and delivers to the Depositor and the Trustee an agreement
accepting such delegation and assignment, which contains an assumption by such
Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a
party to this Agreement. In the case of any such assignment and delegation,
the Servicer shall be released from its obligations under this Agreement
(except as provided above), except that the Servicer shall remain liable for
all liabilities and obligations incurred by it as Servicer hereunder prior to
the satisfaction of the conditions to such assignment and delegation set forth
in the preceding sentence.
SECTION 7.03. Limitation on Liability of the Depositor, the Servicer and
Others.
Neither the Depositor nor the Servicer nor any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Certificateholders for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect
the Depositor or the Servicer against any breach of representations or
warranties made by it herein or protect the Depositor or the Servicer or any
such person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or negligence in the performance of duties or
by reason of reckless disregard of obligations and duties hereunder. The
Depositor, the Servicer and any director, officer, employee or agent of the
Depositor or the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor or the Servicer shall be
indemnified by the Trust 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
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor the Servicer shall
be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to their respective duties hereunder and which in its
opinion may involve it in any expense or liability; provided, however, that
either the Depositor or the Servicer may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder.
SECTION 7.04. Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties
imposed upon it hereunder except upon determination that such obligations and
duties hereunder are no longer permissible under applicable law or except in
connection with a permitted assignment pursuant to Section 7.02. Any such
determination that the Servicer's obligations are no longer permissible shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
The Servicer shall give notice of any proposed resignation to the Trustee, the
Certificateholders and the Rating Agencies. No such resignation by the
Servicer shall become effective until the Trustee or a successor servicer
shall have assumed the Servicer's responsibilities and obligations in
accordance with Section 8.02 hereof or shall affect any obligation of the
Seller hereunder.
SECTION 7.05. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Fannie Mae or Freddie Mac
for persons performing servicing for mortgage loans purchased by Fannie Mae or
Freddie Mac. In the event that any such policy or bond ceases to be in effect,
the Servicer shall obtain a comparable replacement policy or bond from an
insurer or issuer, meeting the requirements set forth above as of the date of
such replacement.
SECTION 7.06. Seller and Servicer May Own Certificates.
Each of the Seller and the Servicer in its individual or any other
capacity may become the owner or pledgee of Certificates with the same rights
as it would have if it were not the Seller or the Servicer, as the case may
be.
ARTICLE VIII
DEFAULT
SECTION 8.01. Events of Default.
(a) "Event of Default," wherever used herein, 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) any failure by the Servicer to remit to the Trustee any payment
other than a Monthly Advance required to be made by the Servicer under
the terms of this Agreement, which failure shall continue unremedied for
a period of three Business Days after the date upon which written notice
of such failure shall have been given to the Servicer by the Trustee or
the Depositor or to the Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Interests evidenced
by the Certificates; or
(ii) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this Agreement (except as set forth in (iii)
below) which failure (A) materially affects the rights of the
Certificateholders and (B) shall continue unremedied for a period of 60
days after the date on which written notice of such failure shall have
been given to the Servicer by the Trustee or the Depositor, or to the
Servicer and the Trustee by the Holders of Certificates evidencing not
less than 25% of the Voting Interests evidenced by the Certificates; or
(iii) if a representation or warranty set forth in Section 2.03
hereof shall prove to be materially incorrect as of the time made in any
respect that materially and adversely affects interests of the
Certificateholders, and the circumstances or condition in respect of
which such representation or warranty was incorrect shall not have been
eliminated or cured, or any affected Mortgage Loan shall not have been
substituted for or repurchased, within 60 days (or, if such breach is not
capable of being cured within 60 days and is not subject to the remedies
set forth in Section 2.04 and provided that the Servicer believes in good
faith that such breach can be cured and is diligently pursuing the cure
thereof, within 120 days) after the date on which written notice thereof
shall have been given to the Servicer and Seller by the Trustee for the
benefit of the Certificateholders or by the Depositor; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Servicer or all or substantially all of the property of
the Servicer; or
(vi) the Servicer 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; or
(vii) either Rating Agency shall lower or withdraw the outstanding
rating of the Certificates because the existing or prospective financial
condition or mortgage loan servicing capability of the Servicer is
insufficient to maintain such outstanding rating; or
(viii) any failure of the Servicer to make any Monthly Advance in
the manner and at the time required to be made from its own funds
pursuant to this Agreement and after receipt of notice from the Trustee
pursuant to Section 5.04, which failure continues unremedied after the
close of business on the Business Day immediately following the
Distribution Date.
(b) If an Event of Default due to the actions or inaction of the
Servicer described in clauses (i) through (vii) of Section 8.01(a) shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Trustee shall, if so directed by the Holders
of Certificates evidencing not less than 25% of the Voting Interests evidenced
by the Certificates, by notice in writing to the Servicer (with a copy to the
Rating Agencies), terminate all of the rights and obligations of the Servicer
under this Agreement (other than rights to reimbursement for Monthly Advances
or other advances previously made, as provided in Section 3.09 or 4.01).
(c) If an Event of Default described in clause (viii) shall occur,
the Trustee shall, prior to the next Distribution Date, terminate the rights
and obligations of the Servicer hereunder (other than rights to reimbursement
for Monthly Advances or other advances previously made, as provided in Section
3.09 or 4.01) and succeed to the rights and obligations of the Servicer
hereunder pursuant to Section 8.02, including the obligation to make Monthly
Advances on such Distribution Date pursuant to the terms hereof.
SECTION 8.02. Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.01 hereof or resigns pursuant to Section
7.04 hereof, subject to the provisions of Section 3.06 hereof, the Trustee
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Agreement and with respect to the transactions set forth
or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms
and provisions hereof, provided that neither the Trustee nor any other
successor to the Servicer pursuant to this Section 8.02 shall be deemed to
have made any representation or warranty made by the Servicer, shall be
obligated to effect any repurchase or substitute of any Mortgage Loan, or
shall have any responsibility for an act or omission of any predecessor
Servicer. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans that the Servicer would have been entitled to
charge to the related Custodial Account if the Servicer had continued to act
hereunder (except that the terminated Servicer shall retain the right to be
reimbursed for advances (including, without limitation, Monthly Advances)
theretofore made by the Servicer with respect to which it would be entitled to
be reimbursed if it had not been so terminated as Servicer).
Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in accordance with this Section 8.02, the Trustee
may, if it shall be unwilling to so act, or shall, if it is unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution, the appointment of which does
not adversely affect the then current rating of the Certificates, as the
successor to the Servicer hereunder in the assumption of all or any part of
the responsibilities, duties or liabilities of the Servicer. Pending
appointment of a successor to the Servicer hereunder, the Trustee, unless the
Trustee is prohibited by law from so acting, shall act in such capacity as
provided herein. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Servicer hereunder. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
(b) The Servicer that has been terminated shall, at the request of
the Trustee but at the expense of such Servicer, deliver to the assuming party
all documents and records relating to each Sub-Servicing Agreement and the
related Mortgage Loans and an accounting of amounts collected and held by it
and otherwise use its best efforts to effect the orderly and efficient
transfer of each Sub-Servicing Agreement to the assuming party.
(c) The Servicer shall cooperate with the Trustee and any successor
servicer in effecting the termination of the Servicer's responsibilities and
rights hereunder, including without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at the time be
credited by the Servicer to the Custodial Account or thereafter received with
respect to the Mortgage Loans and the Servicer Mortgage Files.
(d) Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(a) the failure of the Servicer to (i) deliver, or any delay in delivering,
cash, documents or records to it, (ii) cooperate as required by this
Agreement, or (iii) deliver the Servicer Mortgage Files to the Trustee as
required by this Agreement, or (b) restrictions imposed by any regulatory
authority having jurisdiction over the Servicer.
(e) Any successor to the Servicer as servicer shall during the term
of its service as servicer maintain in force the policy or policies that the
Servicer is required to maintain pursuant to Section 7.05 hereof. No
termination of the Servicer shall have any affect on the obligations of the
Seller hereunder.
SECTION 8.03. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Rating Agencies.
(b) Within 2 Business Days after its notice of the occurrence of any
Event of Default, the Trustee shall transmit by mail to all Certificateholders
and the Rating Agencies notice of each such Event of Default hereunder known
to the Trustee, unless such Event of Default shall have been cured or waived.
SECTION 8.04. Waiver of Events of Default.
The Holders representing at least 66-2/3% of the Voting Interests of
Certificates affected by a default or Event of Default hereunder may waive any
default or Event of Default, provided, however, that (a) a default or Event of
Default under clause (i) or (viii) of Section 8.01(a) may be waived only by
Holders of Certificates of 100% of the Class affected by such default or Event
of Default and (b) no waiver pursuant to this Section 8.04 shall affect the
Holders of Certificates in the manner set forth in Section 11.01(b)(i), (ii)
or (iii). Upon any such waiver of a default or Event of Default by the Holders
representing the requisite percentage of Voting Interests of Certificates
affected by such default or Event of Default, such default or Event of Default
shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder. No such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon except to
the extent expressly so waived.
ARTICLE IX
CONCERNING THE TRUSTEE
SECTION 9.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default that may have occurred,
undertakes with respect to the Trust Fund to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured and not waived, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs. Any permissive right of the Trustee set forth in this Agreement shall
not be construed as a duty.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee that 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. The Trustee shall
have no duty to recompute, recalculate or verify the accuracy of any
resolution, certificate, statement, opinion, report, document, order or other
instrument so furnished to the Trustee.
(c) 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, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability which would be imposed by
reason of its willful misfeasance or bad faith; provided, however, that:
(i) prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default that may have occurred,
the duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
personally 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 the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Agreement which it reasonably believed in good
faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless the Trustee was negligent or acted in bad
faith or with willful misfeasance;
(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 Holders of Certificates evidencing not
less than 25% of the Voting Interests allocated to each Class of
Certificates 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; and
(iv) no provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of
any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Except with respect to an Event of Default described in clause
(i) of Section 8.01(a), the Trustee shall not be deemed to have knowledge of
any Event of Default or event which, with notice or lapse of time, or both,
would become an Event of Default, unless a Responsible Officer of the Trustee
shall have received written notice thereof from the Servicer, the Depositor or
a Certificateholder, or a Responsible Officer of the Trustee has actual notice
thereof, and in the absence of such notice no provision hereof requiring the
taking of any action or the assumption of any duties or responsibility by the
Trustee following the occurrence of any Event of Default or event which, with
notice or lapse of time or both, would become an Event of Default, shall be
effective as to the Trustee.
(e) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided,
however, that the Trustee shall use its best efforts to remit to the Servicer,
upon receipt, any such complaint, claim, demand, notice or other document (i)
which is delivered to the Corporate Trust Office of the Trustee, (ii) of which
a Responsible Officer has actual knowledge, and (iii) which contains
information sufficient to permit the Trustee to make a determination that the
real property to which such document relates is a Mortgaged Property.
SECTION 9.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 9.01:
(i) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of Servicing Officers, 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 or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (which has not
been cured or waived), to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default that may have
occurred, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates evidencing not less than 25% of the Voting
Interests allocated to each Class of Certificates; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such
expense or liability as a condition to taking any such action; the
reasonable expense of every such investigation shall be paid by the
Servicer in the event that such investigation relates to an Event of
Default by the Servicer, if an Event of Default by the Servicer shall
have occurred and is continuing, and otherwise by the Certificateholders
requesting the investigation;
(vi) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
affiliates, agents or attorneys;
(vii) the Trustee shall not be required to expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is
not assured to it; and
(viii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial
or other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
SECTION 9.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein shall be taken as the statements of
the Depositor or the 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, the Certificates or of any
Mortgage Loan or related document. The Trustee shall not be accountable for
the use or application by the Depositor, the Seller or the Servicer of any
funds paid to the Depositor, the Seller or the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Certificate Account by
the Depositor, the Seller or the Servicer.
SECTION 9.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the other
parties with the same rights as it would have if it were not the Trustee.
SECTION 9.05. Trustee's Compensation and Expenses.
(a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and reimbursement of its expenses in accordance
with a separate fee letter.
(b) The Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified by the Servicer and held harmless against any
loss, liability or expense (i) incurred in connection with any legal action
relating to this Agreement or the Certificates, or the performance of any of
the Trustee's duties hereunder, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Trustee's duties hereunder or by reason of reckless
disregard of the Trustee's obligations and duties hereunder and (ii) resulting
from the exercise of any power of attorney granted by the Trustee to the
Servicer in accordance with this Agreement. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder.
SECTION 9.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association having its principal office in a state and city acceptable to the
Depositor and the Servicer 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 or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 9.06, the Trustee shall resign immediately in the manner and with
the effect specified in Section 9.07 hereof.
SECTION 9.07. Resignation and Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by (i) giving written notice of resignation to the
Depositor, the Seller and the Servicer and by mailing notice of resignation by
first class mail, postage prepaid, to the Certificateholders at their
addresses appearing on the Certificate Register, and to the Rating Agencies,
not less than 60 days before the date specified in such notice when, subject
to Section 9.08, such resignation is to take effect, and (ii) acceptance by a
successor trustee in accordance with Section 9.08 meeting the qualifications
set forth in Section 9.06. 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.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 hereof and shall fail to resign
after written request thereto by the Servicer, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)
a tax is imposed or threatened with respect to the Trust Fund by any state in
which the Trustee or the Trust Fund held by the Trustee is located, (iv) the
continued use of the Trustee would result in a downgrading of the rating by
the Rating Agencies of any Class of Certificates with a rating or (v) the
Trustee breaches any of its obligations or representations hereunder, then the
Depositor, with the consent of the Servicer, may remove the Trustee and, with
the consent of the Servicer, appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the Trustee and one copy to the successor trustee. The Trustee may also be
removed at any time by the Holders of Certificates evidencing not less than
50% of the Voting Interests evidenced by the Certificates. Notice of any
removal of the Trustee and acceptance of appointment by the successor trustee
shall be given to the Rating Agencies by the Servicer.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.08 hereof.
SECTION 9.08. Successor Trustee.
(a) If the Trustee resigns pursuant to Section 9.07, the Depositor,
with the consent of the Servicer, shall appoint a successor trustee that
satisfies the requirements of Section 9.06. Any successor trustee appointed as
provided in Section 9.07 hereof shall execute, acknowledge and deliver to the
Depositor and the Servicer and to its predecessor trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with the like effect as if originally named as trustee herein. The Depositor
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.
(b) No successor trustee shall accept appointment as provided in
this Section 9.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 9.06 hereof and shall not
adversely affect the then current rating of the Certificates.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section 9.08, the Servicer shall mail notice of the
succession of such trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Servicer fails to mail
such notice within ten days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
SECTION 9.09. Merger or Consolidation of Trustee.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Person succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such Person shall be eligible under the
provisions of Section 9.06 hereof without the execution or filing of any paper
or further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.
SECTION 9.10. Appointment of Co-Trustee or Separate Trustee.
(a) 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 any Mortgage Note may at
the time be located, the Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee 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 and
for the benefit of the applicable Certificateholders, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this
Section 9.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable. If the Servicer
shall not have joined in such appointment within fifteen days after the
receipt by it of a request to do so, or in the 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 hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
9.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 9.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for any obligation of the Trustee under this
Agreement to advance funds on behalf of the Servicer, shall be conferred
or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to be
performed by the Trustee (whether as Trustee hereunder or as successor to
the Servicer), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Servicer and the Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article IX. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicer and the Depositor.
(d) 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.
(e) The Trustee agrees to instruct the co-trustees, if any, to the
extent necessary to fulfill the Trustee's obligations hereunder.
(f) The Servicer shall pay what it determines in its sole discretion
to be the reasonable compensation of any co-trustee required to be appointed
hereunder, provided that any such expenditure shall be a reimbursable expense
of the Servicer from funds on deposit in the Custodial Account pursuant to
Section 3.09(a)(vi).
SECTION 9.11. Office of the Trustee.
The office of the Trustee for purposes of receipt of notices and
demands is the Corporate Trust Office.
SECTION 9.12. Tax Returns, 1934 Act Reporting, Other Data.
(a) The Trustee shall prepare or cause to be prepared on behalf of
the Trust Fund, based upon the information furnished by the Servicer or
calculated by the Trustee in accordance with this Agreement pursuant to
instructions given by the Depositor, and shall file federal tax returns and
appropriate state income tax returns and such other returns as may be required
by applicable law relating to the Trust Fund and shall forward copies to the
Depositor of all such returns and Form 1099 information and such other
information within the control of the Trustee as the Depositor may reasonably
request in writing, and shall forward to each Certificateholder such forms and
furnish such information within the control of the Trustee as are required by
the Code and the REMIC Provisions to be furnished to them, and will prepare
and disseminate to Certificateholders Form 1099s (or otherwise furnish
information within the control of the Trustee) to the extent required by
applicable law.
(b) The Trustee shall prepare and file with the Internal Revenue
Service ("IRS"), on behalf of the Trust Fund, an application on IRS Form SS-4.
(c) The Depositor will prepare or cause to be prepared the initial
current report on Form 8-K and thereafter the Trustee will prepare or cause to
be prepared Forms 10-K and 10-Q (if necessary), or monthly current reports on
Form 8-K, on behalf of the Trust Fund, as may be required by applicable law or
regulation, and will file such reports electronically with the Securities and
Exchange Commission (the "SEC"). The Trustee will sign each such report on
behalf of the Trust Fund, and will forward a copy of each such report to the
Depositor promptly after such report has been filed with the SEC. The
Depositor agrees to use its best efforts to seek to terminate such filing
obligation after the period during which such filings are required under the
1934 Act.
(d) The Trustee will provide all information to Bloomberg that is
necessary to have the information regarding the Certificates and the
transaction posted on Bloomberg and the Trustee will provide Bloomberg with
all necessary information (including information regarding the Mortgage Loans)
for Bloomberg to update information necessary regarding the Certificates and
the transaction on Bloomberg.
ARTICLE X
TERMINATION
SECTION 10.01. Termination upon Liquidation or Repurchase of all Mortgage
Loans.
(a) The obligations and responsibilities of the Servicer, the
Seller, the Depositor and the Trustee created hereby with respect to the Trust
Fund created hereby shall terminate upon the earlier of:
(i) the repurchase by the Servicer at its election, of all Mortgage
Loans and all property acquired in respect of any Mortgage Loan remaining
in the Trust Fund, which repurchase right the Servicer may exercise at
its sole and exclusive election as of any Distribution Date (such
applicable Distribution Date being herein referred to as the "Optional
Termination Date") following the Distribution Date on which the aggregate
Scheduled Principal Balance of the Mortgage Loans at the time of the
repurchase is less than or equal to 10% of the aggregate Scheduled
Principal Balance of the Mortgage Loans as of the Cut-off Date; and
(ii) the later of (A) twelve months after the maturity of the last
Mortgage Loan remaining in the Trust Fund, (B) the liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund and the disposition of all REO Property and (C) the
distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement.
In no event shall the trust created hereby continue beyond the expiration of
21 years from the death of the last survivor of the descendants of Mr. Joseph
P. Kennedy, former Ambassador of the United States to Great Britain, living on
the date of execution of this Agreement. Any termination of the Trust Fund
shall be carried out in such a manner so that the termination of each REMIC
included therein shall qualify as a "qualified liquidation" under the REMIC
Provisions.
(b) The Mortgage Loan Repurchase Price for any such Optional
Termination of the Trust Fund shall be equal to the Aggregate Loan Balance of
the Mortgage Loans as of the date of repurchase, together with accrued and
unpaid interest thereon from the date to which such interest was paid or
advanced at the sum of the applicable Net Mortgage Rate with respect to each
Mortgage Loan through the last day of the month of such repurchase, plus any
sums on account of such Mortgage Loan that have been advanced by the Servicer
and are reimbursable to the Servicer hereunder (including the Scheduled
Principal Balance of each Mortgage Loan that was secured by any REO Property);
provided, however, that if the Servicer shall so choose, the Servicer may
remit the Mortgage Loan Repurchase Price net of advances that would otherwise
be reimbursable to the Servicer and the Servicer will have no further
entitlement to reimbursement for such advances. The Trustee shall give notice
to the Rating Agencies of the Servicer's election to purchase the Mortgage
Loans pursuant to this Section 10.01 and of the Optional Termination Date.
SECTION 10.02. Procedure Upon Optional or Other Final Termination.
(a) In case of any Optional Termination pursuant to Section 10.01,
the Servicer shall, at least twenty days prior to the date notice is to be
mailed to the affected Certificateholders pursuant to Section 10.02(c), notify
the Trustee of such Optional Termination Date and of the Mortgage Loan
Repurchase Price.
(b) Any repurchase of the Mortgage Loans by the Servicer shall be
made on an Optional Termination Date by deposit of the Mortgage Loan
Repurchase Price into the Certificate Account before the Distribution Date on
which such repurchase is effected. Upon receipt by the Trustee of an Officers'
Certificate of the Servicer certifying as to the deposit of such repurchase
price into the Certificate Account, the Servicer shall prepare and the Trustee
and each co-trustee and separate trustee, if any, then acting as such under
this Agreement, shall, upon request and at the expense of the Servicer execute
and deliver all such instruments of transfer or assignment, in each case
without recourse, as shall be necessary, to vest title in the Servicer in the
Mortgage Loans so repurchased and shall transfer or deliver to the Servicer
the repurchased Mortgage Loans. Any distributions on the Mortgage Loans
received by the Trustee subsequent to (or with respect to any period
subsequent to) the Optional Termination Date shall be promptly remitted by it
to the Servicer.
(c) Notice of the Distribution Date on which the Servicer
anticipates that the final distribution shall be made (whether upon Optional
Termination or otherwise), shall be given promptly by the Servicer to the
Trustee and by the Trustee by first class mail to Holders of the affected
Certificates. Such notice shall be mailed no earlier than the 15th day and not
later than the 10th day preceding the Optional Termination Date or date of
final distribution, as the case may be. Such notice shall specify (i) the
Distribution Date upon which final distribution on the affected Certificates
will be made upon presentation and surrender of such Certificates at the
office or agency therein designated, (ii) the amount of such final
distribution and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, such distribution being made only upon
presentation and surrender of such Certificates at the office or agency
maintained for such purposes (the address of which shall be set forth in such
notice).
(d) In the event that any Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining such Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain subject to the Trust Fund.
SECTION 10.03. Additional Termination Requirements.
(a) In the event the Servicer exercises its purchase option pursuant
to Section 10.01, each REMIC shall be terminated in accordance with the
following additional requirements, unless the Trustee has received an Opinion
of Counsel to the effect that the failure of the REMICs to comply with the
requirements of this Section will not (i) result in the imposition of taxes on
a "prohibited transaction" of the REMICs, as described in Section 860F of the
Code, or (ii) cause the REMICs to fail to qualify as a REMIC at any time that
any Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date set forth in
the notice given by the Servicer under Section 10.02, the Trustee shall
adopt a plan of complete liquidation of the REMICs and specify the first
day of the applicable 90-day liquidation period in a statement attached
to the Trust Fund's final tax return pursuant to Treasury Regulations
Section 1.860F-1, and satisfy (or cause to be satisfied) all of the
requirements of a qualified liquidation under the REMIC Provisions; and
(ii) at or after the time of adoption of any such plan of complete
liquidation for the REMICs at or prior to the Final Distribution Date,
the Trustee shall sell all of the assets (if any) of the Trust Fund to
the Servicer for cash; provided, however, that in the event that a
calendar quarter ends after the time of adoption of such a plan of
complete liquidation but prior to the final Distribution Date, the
Trustee shall not sell any of the assets of the Trust Fund prior to the
close of that calendar quarter.
(b) By its acceptance of a Class R Certificate, the Holders thereof
hereby agree to adopt such a plan of complete liquidation and to take such
other action in connection therewith as may be reasonably required to
liquidate and otherwise terminate the REMICs.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01. Amendment.
(a) This Agreement may be amended from time to time by the
Depositor, the Servicer, the Seller and the Trustee without the consent of any
of the Certificateholders,
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein that may be
inconsistent with any other provisions herein or that may be inconsistent
with information provided in the Offering Documents,
(iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or desirable to maintain the qualification
of each REMIC as REMIC at all times that any Certificate is outstanding
or to avoid or minimize the risk of the imposition of any tax on the
Trust Fund pursuant to the Code that would be a claim against the Trust
Fund, provided that the Trustee has received an Opinion of Counsel to the
effect that (A) such action is necessary or desirable to maintain such
qualification or to avoid or minimize the risk of the imposition of any
such tax and (B) such action will not adversely affect the status of any
REMIC as a REMIC or adversely affect in any material respect the
interests of any Certificateholder,
(iv) to make any other provisions with respect to matters or
questions arising under this Agreement that are not materially
inconsistent with the provisions of this Agreement, provided that such
action shall not adversely affect in any material respect the interests
of any Certificateholder or adversely affect the status of any REMIC as a
REMIC as evidenced by an Opinion of Counsel or written confirmation
received by each Rating Agency then rating the Certificates that such
amendment to this Agreement will not result in a downgrade of the current
rating then assigned to any Class of Certificates affected by such
amendment, or
(v) To add appropriate restrictions and legends to any of the Class
A1, Class A2, Class M1, Class M2 or Class M3 Certificates that are no
longer registered under the 1933 Act.
(b) This Agreement may be amended from time to time by the
Depositor, the Servicer, the Seller and the Trustee with the consent of the
Holders of Certificates evidencing, in the aggregate, not less than 66-2/3% of
the Voting Interests of all the Certificates for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
the Certificates; provided, however, that no such amendment may (i) reduce in
any manner the amount of, delay the timing of or change the manner in which
payments received on or with respect to Mortgage Loans are required to be
distributed with respect to any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of a Class of Certificates in a manner other than as
set forth in (i) above without the consent of the Holders of Certificates
evidencing not less than 66-2/3% of the Voting Interests of such Class, (iii)
reduce the aforesaid percentages of Voting Interests, the holders of which are
required to consent to any such amendment without the consent of 100% of the
Holders of Certificates of the Class affected thereby, (iv) change the
percentage of the Scheduled Principal Balance of the Mortgage Loans specified
in Section 10.01(a) relating to optional termination of the Trust Fund without
the consent of 100% of the Holders of Certificates, (v) modify the provisions
of this Section 11.01 without the consent of 100% of the Holders of
Certificates, or (vi) terminate this Agreement or the Trust Fund created
hereunder other than as provided in Article X hereof without the consent of
100% of the Holders of Certificates.
It shall not be necessary for the consent of Certificateholders
under this Section to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
(c) Promptly after the execution of any amendment to this Agreement,
the Trustee shall furnish written notification of the substance of such
amendment to each Certificateholder and the Rating Agencies.
(d) Prior to the execution of any amendment to this Agreement, the
Trustee shall receive an Opinion of Counsel that any such amendment is
authorized by and permitted hereunder and that it will not adversely affect
the status of any REMIC as a REMIC.
SECTION 11.02. Recordation of Agreement; Counterparts.
(a) This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
Such recordation, if any, shall be effected by the Servicer at its expense on
direction of the Trustee, but only upon direction of the Trustee accompanied
by an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders of the Trust
Fund.
(b) For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
SECTION 11.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.04. Intention of Parties.
(a) It is the express intent of the Depositor, the Seller, the
Servicer and the Trustee that the conveyance by the Seller to the Depositor
pursuant to the Mortgage Loan Purchase Agreement and the conveyance by the
Depositor to the Trustee and by the Seller to the Trustee as provided for in
Section 2.01 of each of the Seller's and Depositor's right, title and interest
in and to the Mortgage Loans be, and be construed as, an absolute sale and
assignment by the Seller to the Depositor and by the Depositor to the Trustee
of the Mortgage Loans for the benefit of the Certificateholders. Further, it
is not intended that either conveyance be deemed to be a pledge of the
Mortgage Loans by the Seller to the Depositor or by the Depositor to the
Trustee to secure a debt or other obligation. However, in the event that the
Mortgage Loans are held to be property of the Seller or the Depositor, or if
for any reason the Mortgage Loan Purchase Agreement or this Agreement is held
or deemed to create a security interest in the Mortgage Loans, then it is
intended that (i) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (ii) the conveyances provided for in Section 2.01 shall be
deemed to be a grant by the Seller and the Depositor to the Trustee on behalf
of the Certificateholders, to secure payment in full of the Secured
Obligations (as defined below), of a security interest in all of the Seller's
and the Depositor's right (including the power to convey title thereto), title
and interest, whether now owned or hereafter acquired, in and to the Mortgage
Loans, including the Mortgage Notes, the Mortgages, any related insurance
policies and all other documents in the related Trustee Mortgage Files, and
all accounts, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit and investment property consisting of the Trust Fund,
arising from or relating to (A) the Mortgage Loans, including with respect to
each Mortgage Loan, the Mortgage Note and related Mortgage, and all other
documents in the related Trustee Mortgage Files, and including any Replacement
Mortgage Loans; (B) pool insurance policies, hazard insurance policies and any
bankruptcy bond relating to the foregoing, if applicable; (C) the Certificate
Account; (D) the Custodial Account; (E) the Basis Risk Reserve Fund; (F) all
amounts payable on or after the Cut-off Date to the holders of the Mortgage
Loans in accordance with the terms thereof; (F) all income, payments, proceeds
and products of the conversion, voluntary or involuntary, of the foregoing
into cash, instruments, securities or other property, including without
limitation all amounts from time to time held or invested in the Certificate
Account, whether in the form of cash, instruments, securities or other
property; and (G) all cash and non-cash proceeds of any of the foregoing;
(iii) the possession or control by the Trustee or any other agent of the
Trustee of Mortgage Notes or such other items of property as constitute
instruments, money, documents, advices of credit, letters of credit, goods,
certificated securities or chattel paper shall be deemed to be possession or
control by the secured party, or possession or control by a purchaser, for
purposes of perfecting the security interest pursuant to the Uniform
Commercial Code (including, without limitation, Sections 9-305 or 9-115
thereof); and (iv) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents of, or
persons holding for, the Trustee, as applicable, for the purpose of perfecting
such security interest under applicable law. "Secured Obligations" means (i)
the rights of each Certificateholder to be paid any amount owed to it under
this Agreement, (ii) all other obligations of the Seller and the Depositor
under this Agreement and the Mortgage Loan Purchase Agreement and (iii) the
right of the Certificateholders to the Mortgage Loans.
(b) The Seller and the Depositor, and, at the Depositor's direction,
the Servicer and the Trustee, shall, to the extent consistent with this
Agreement, take such reasonable actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans
and the other Trust Fund property described above, such security interest
would be deemed to be a perfected security interest of first priority as
applicable. The Servicer shall file, at its expense, all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect the Trustee's
security interest in or lien on the Mortgage Loans, including without
limitation (i) continuation statements, (ii) such other statements as may be
occasioned by any transfer of any interest of the Servicer or the Depositor in
any Mortgage Loan; and filings necessary as a result in any change in the UCC.
SECTION 11.05. Notices.
In addition to other notices provided under this Agreement, the
Trustee shall notify the Rating Agencies in writing of: (a) any amendment of
this Agreement pursuant to 11.01; (b) the final payment of any amounts owing
to a Class of Certificates; (c) any Event of Default under this Agreement; and
(d) in the event any Mortgage Loan is repurchased in accordance with this
Agreement; and (e) the appointment of any successor to the Servicer.
All directions, demands and notices hereunder shall be in writing
(except where also required to be given telephonically) and shall be deemed to
have been duly given when received (i) in the case of the Depositor,
Structured Asset Securities Corporation, 200 Vesey Street, 12th Floor, New
York, New York 10285, Attention: Single Family Mortgage Department, 12th
Floor; (ii) in the case of the Trustee, Bankers Trust Company of California,
N.A., 1761 East St. Andrew Place, Santa Ana, California 94111, Attention:
Corporate Trust Services or such other address as may hereafter be furnished
to the Depositor, the Seller and the Servicer in writing by the Trustee; (iii)
in the case of the Seller or Servicer, Washington Mutual Bank, FA, 540 E. Main
Street, Stockton, California 95290, Attention: Jess G. Almanza and to 9451
Corbin Avenue, Northridge, California 91324, Attention: Gabriel V. Barroso
(with a copy to 9200 Oakdale Avenue, Chatsworth, California 91311, Attention:
Fay L. Chapman, Senior Executive Vice President); and (iv) in the case of the
Rating Agencies, Moody's Investors Service, 99 Church Street, New York, New
York 10007, Attention: Mortgage-Backed Securities Rating Group; and (v) Fitch
IBCA, Inc., One State Street Plaza, New York, New York 10004, Attention:
Residential Mortgages; and Standard & Poor's Rating Services, 55 Water Street,
New York, New York, Attention: Residential Mortgages. Notices given by
telecopy shall be deemed received when request is confirmed by telephone.
Notices of default are also required to be given by registered mail. Notices
to Certificateholders shall be deemed given when mailed, first class postage
prepaid.
SECTION 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 11.07. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third party by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
provided herein, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Interests evidenced by the Certificates shall also have
made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 11.07, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 11.08. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall
not be personally liable for obligations of the Trust Fund, that the interests
in the Trust Fund represented by the Certificates shall be nonassessable for
any reason whatsoever, and that the Certificates, upon due authentication
thereof by the Trustee pursuant to this Agreement, are and shall be deemed
fully paid.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized all as of the 31st day of March, 2000.
STRUCTURED ASSET SECURITIES CORPORATION,
as Depositor
By:____________________________________________
Name:
Title:
WASHINGTON MUTUAL BANK, FA,
as Seller and Servicer
By:____________________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
not in its individual capacity, but solely
as Trustee
By:____________________________________________
Name:
Title:
<PAGE>
STATE OF CALIFORNIA )
: ss.:
COUNTY OF ________ )
On this day of March, 2000, before me, personally appeared
________________ _______________________, known to me to be a
_____________________________ of Bankers Trust Company of California, N.A.,
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said bank, and acknowledged to me that such bank
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the day of March, 2000, before me, personally appeared
________________ ____________________, known to me to be a
______________________________ of Structured Asset Securities Corporation, one
of the corporations that executed the within instrument and also known to me
to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
STATE OF WASHINGTON )
: ss.:
COUNTY OF_________ )
On the day of March, 2000, before me, a Notary Public in and for
said State, personally appeared _____________________________, known to me to
be a the _________________ of Washington Mutual Bank, FA, the federally
chartered savings association, that executed the within instrument and also
known to me to be the person who executed it on behalf of said bank, and
acknowledged to me that such bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------------
Notary Public
[NOTARIAL SEAL]
<PAGE>
EXHIBIT A
FORM OF CLASS A1 AND A2 CERTIFICATE
<PAGE>
EXHIBIT B
FORM OF CLASS M1, M2 AND M3 CERTIFICATE
<PAGE>
EXHIBIT C
FORM OF CLASS B1, B2 AND B3 CERTIFICATE
<PAGE>
EXHIBIT D
FORM OF CLASS R CERTIFICATE
<PAGE>
EXHIBIT E
SCHEDULE OF MORTGAGE LOANS
<PAGE>
EXHIBIT F-1
FORM OF INITIAL LOAN LIST CERTIFICATION
March 31, 2000
Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Washington Mutual Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2000-1
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Trustee, hereby
certifies that, except for the exceptions noted on the schedule attached
hereto, it has received a Mortgage File with respect to each Mortgage Loan
listed on the Mortgage Loan Schedule. The Trustee has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically mentioned above. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of
the documents delivered in accordance with Section 2.01 of the Pooling and
Servicing Agreement or any of the Mortgage Loans identified in the Mortgage
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized terms used herein without definition shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: ______________________________________
Name:
Title:
<PAGE>
EXHIBIT F-2
FORM OF INITIAL CERTIFICATION OF TRUSTEE
April 30, 2000
Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Washington Mutual Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2000-1
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Trustee, hereby
certifies that, except for the exceptions noted on the schedule attached
hereto, it has (a) received an original Mortgage Note with respect to each
Mortgage Loan listed on the Mortgage Loan Schedule and (b) received an
original Mortgage (or a certified copy thereof) in accordance with Section
2.01(b) of the Pooling and Servicing Agreement with respect to each Mortgage
Loan listed on the Mortgage Loan Schedule. The Trustee has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically mentioned above. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of
the documents delivered in accordance with Section 2.01 of the Pooling and
Servicing Agreement or any of the Mortgage Loans identified in the Mortgage
Loan Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized terms used herein without definition shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: _________________________________________
Name:
Title:
<PAGE>
EXHIBIT F-3
FORM OF FINAL CERTIFICATION OF TRUSTEE
------------------
[date]
Washington Mutual Bank, FA
1201 Third Avenue, 5th Floor
Seattle, Washington 98101
Structured Asset Securities Corporation
200 Vesey Street
New York, New York 10285
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to Washington Mutual Mortgage Loan Trust
Mortgage Pass-Through Certificates, Series 2000-1
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the above-referenced Pooling and Servicing Agreement the undersigned, as
Trustee, hereby certifies that, except for the exceptions noted on the
schedule attached hereto, as to each Mortgage Loan listed in the Mortgage Loan
Schedule it has reviewed the Mortgage File and has determined that (based
solely on its review of each such documents on its face) (i) all documents
described in clauses (i)-(v) of Section 2.01(b) of the Pooling and Servicing
Agreement are in its possession or its agent, (ii) such documents have been
reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered and such documents relate to such Mortgage Loan
and (iii) each Mortgage Note has been endorsed and each assignment of Mortgage
has been delivered as provided in Section 2.01(b) of the Pooling and Servicing
Agreement. The Trustee has made no independent examination of any documents
required to be delivered in accordance with Section 2.01(b) of the Pooling and
Servicing Agreement beyond the review specifically required therein. The
Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents required to
be delivered in accordance with Section 2.01(b) of the Pooling and Servicing
Agreement or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (ii) the collectibility, insurability, effectiveness or
suitability of any such Mortgage Loan.
Capitalized terms used herein without definition have the meanings
ascribed to them in the Pooling and Servicing Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: _______________________________________
Name:
Title:
<PAGE>
EXHIBIT G
FORM OF REQUEST FOR RELEASE
------------------
[date]
To:
In connection with the administration of the Mortgage Loans held by
you as Trustee under the Pooling and Servicing Agreement dated as of March 1,
2000, among Structured Asset Securities Corporation, as Depositor, Washington
Mutual Bank, FA, as seller and servicer, and you, as Trustee (the "Pooling and
Servicing Agreement"), the undersigned hereby requests a release of the
Trustee Mortgage File held by you as Trustee with respect to the following
described Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full.
- -----
(The Servicer hereby certifies that all amounts received in
connection with the Mortgage Loan have been or will be credited
to the Custodial Account pursuant to the Pooling and Servicing
Agreement.)
2. Mortgage Loan repurchased.
- -----
(The Servicer hereby certifies that the Purchase Price has been
credited to the Custodial Account pursuant to the Pooling and
Servicing Agreement.)
3. The Mortgage Loan is being foreclosed.
- -----
4. Other. (Describe)
- -----
The undersigned acknowledges that the above Trustee Mortgage File
will be held by the undersigned in accordance with the provisions of the
Pooling and Servicing Agreement and will be returned, except if the Mortgage
Loan has been paid in full or repurchased (in which case the Trustee Mortgage
File will be retained by us permanently) when no longer required by us for
such purpose.
Capitalized terms used herein shall have the meanings ascribed to
them in the Pooling and Servicing Agreement.
[SERVICER]
By:________________________________________
Name:
Title:
<PAGE>
EXHIBIT H
FORM OF RULE 144A TRANSFER CERTIFICATE
------------------
[date]
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705
Re: Pooling and Servicing Agreement relating to Washington Mutual
Mortgage Loan Trust Mortgage Pass-Through Certificates,
Series 2000-1
Reference is hereby made to the Pooling and Servicing Agreement (the
"Agreement") among Structured Asset Securities Corporation, as Depositor,
Bankers Trust Company of California, N.A., as Trustee and Washington Mutual
Bank, FA, as Seller and Servicer, dated as of March 1, 2000. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Agreement.
This letter relates to $___________ initial Certificate Principal
Amount of Class ____ Certificates which are held in the form of Definitive
Certificates registered in the name of _______________________ (the
"Transferor"). The Transferor has requested a transfer of such Definitive
Certificates for Definitive Certificates of such Class registered in the name
of _______________________ (the "Transferee").
In connection with such request, and in respect of such
Certificates, the Transferor hereby certifies that such Certificates are being
transferred in accordance with (i) the transfer restrictions set forth in the
Agreement and the Certificates and (ii) Rule 144A under the 1933 Act to a
purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer", which
purchaser is aware that the sale to it is being made in reliance upon Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Placement Agent and the Depositor.
----------------------------------------
[Name of Transferor]
By:_____________________________________
Name:
Title:
<PAGE>
EXHIBIT I
FORM OF ERISA TRANSFER AFFIDAVIT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as
follows:
1. That he [she] is [title of officer] ________________________ of
[name of Investor] _________________________________________ (the "Investor"),
a _______________________ [description of type of entity] duly organized and
existing under the laws of the [State of _______________] [United States], on
behalf of which he [she] makes this affidavit.
2. The Investor either (x) is not an employee benefit plan subject
to Section 406 or Section 407 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), the Trustee of any such plan or a person acting
on behalf of any such plan nor a person using the assets of any such plan or
(2) if the Investor is an insurance company, such Investor is purchasing such
Certificates with funds contained in an "Insurance Company General Account"
(as such term is defined in Section v(e) of the Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60; or (y) shall deliver to the Trustee
and the Depositor an opinion of counsel (a "Benefit Plan Opinion")
satisfactory to the Trustee and the Depositor, and upon which the Trustee, the
Servicer and the Depositor shall be entitled to rely, to the effect that the
purchase or holding of such Certificate by the Investor will not result in the
assets of the Trust Fund being deemed to be plan assets and subject to the
prohibited transaction provisions of ERISA or the Code and will not subject
the Trustee, the Servicer or the Depositor to any obligation in addition to
those undertaken by such entities in the Pooling and Servicing Agreement (the
"Agreement") among Structured Asset Securities Corporation, as Depositor,
Bankers Trust Company of California, N.A., as Trustee and Washington Mutual
Bank, FA, as Seller and Servicer, dated as of March 1, 2000, which opinion of
counsel shall not be an expense of the Trustee, the Servicer or the Depositor.
3. The Investor hereby acknowledges that under the terms of the
Agreement, no transfer of the ERISA-Restricted Certificates shall be permitted
to be made to any person unless the Depositor and Trustee have received a
certificate from such transferee in the form hereof.
<PAGE>
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this _____ day of _______________, 20__.
----------------------------------------
[Investor]
By:_____________________________________
Name:
Title:
ATTEST:
- ---------------------------
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named
___________________________, known or proved to me to be the same person who
executed the foregoing instrument and to be the _____________________ of the
Investor, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Investor.
Subscribed and sworn before me this _____ day of ___________ 20___.
----------------------------------
NOTARY PUBLIC
My commission expires the
____ day of ____________,
20__.
<PAGE>
EXHIBIT J-1
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], ___________________________ being first duly
sworn, deposes and says:
1. That he [she] is [title of officer] ________________________ of
[name of Purchaser] _________________________________________ (the
"Purchaser"), a _______________________ [description of type of entity] duly
organized and existing under the laws of the [State of _______________]
[United States], on behalf of which he [she] makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is
______________.
3. That the Purchaser is not a "disqualified organization" within
the meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as
amended (the "Code") and will not be a "disqualified organization" as of
____________________ [date of transfer], and that the Purchaser is not
acquiring a Residual Certificate (as defined in the Agreement) for the account
of, or as agent (including a broker, nominee, or other middleman) for, any
person or entity from which it has not received an affidavit substantially in
the form of this affidavit. For these purposes, a "disqualified organization"
means the United States, any state or political subdivision thereof, any
foreign government, any international organization, any agency or
instrumentality of any of the foregoing (other than an instrumentality if all
of its activities are subject to tax and a majority of its board of directors
is not selected by such governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), any "electing large
partnership" within the meaning of Section 775 of the Code, or any
organization (other than a farmers' cooperative described in Code Section 521)
that is exempt from federal income tax unless such organization is subject to
the tax on unrelated business income imposed by Code Section 511.
4. That the Purchaser is not, and on ____________________ [date of
transfer] will not be, and is not and on such date will not be investing the
assets of, an employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a plan subject to Code Section
4975 or a person or entity that is using the assets of any employee benefit
plan or other plan to acquire a Residual Certificate.
5. That the Purchaser hereby acknowledges that under the terms of
the Pooling and Servicing Agreement (the "Agreement") among Structured Asset
Securities Corporation, as Depositor, Bankers Trust Company of California,
N.A., as Trustee and Washington Mutual Bank, FA, as Seller and Servicer, dated
as of March 1, 2000, no transfer of a Residual Certificate shall be permitted
to be made to any person unless the Trustee has received a certificate from
such transferee to the effect that such transferee is not an employee benefit
plan subject to ERISA or a plan subject to Section 4975 of the Code and is not
using the assets of any employee benefit plan or other plan to acquire a
Residual Certificate.
6. That the Purchaser does not hold REMIC residual securities as
nominee to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (such
entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to such Residual Certificate.
8. That the Purchaser will not transfer a Residual Certificate to
any person or entity (i) as to which the Purchaser has actual knowledge that
the requirements set forth in paragraph 3, 4, 6 or 10 hereof are not satisfied
or that the Purchaser has reason to believe does not satisfy the requirements
set forth in paragraph 7 hereof, and (ii) without obtaining from the
prospective Purchaser an affidavit substantially in this form and providing to
the Trustee a written statement substantially in the form of Exhibit I to the
Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any cash
flows generated by the interest and that it intends to pay taxes associated
with holding such Residual Certificate as they become due.
10. That the Purchaser (i) is a U.S. Person or (ii) is a Non-U.S.
Person that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor
and the Trustee with an effective Internal Revenue Service Form 4224 or
successor form at the time and in the manner required by the Code. "Non-U.S.
Person" means any person other than (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax
purposes) created or organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia; (iii) a partnership (or entity treated as a partnership
for tax purposes) organized in the United States or under the laws of the
United States or of any state thereof, including, for this purpose, the
District of Columbia (unless provided otherwise by future Treasury
regulations); (iv) an estate whose income is includible in gross income for
United States income tax purposes regardless of its source; or (v) a trust, if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more U.S. Persons have authority to
control all substantial decisions of the trust. Notwithstanding the last
clause of the preceding sentence, to the extent provided in Treasury
regulations, certain trusts in existence on August 20, 1996, and treated as
U.S. Persons prior to such date, may elect to continue to be U.S. Persons.
11. That the Purchaser agrees to such amendments of the Agreement as
may be required to further effectuate the restrictions on transfer of any
Residual Certificate to such a "disqualified organization," an agent thereof,
a Book-Entry Nominee, or a person that does not satisfy the requirements of
paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Trustee as
its agent to act as "tax matters person" of the Trust Fund pursuant to the
Agreement.
<PAGE>
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its ______________________ this _____ day of ____________, 20__.
--------------------------------------
[name of Purchaser]
By:___________________________________
Name:
Title:
Personally appeared before me the above-named _________
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the __________ _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________, 20__.
NOTARY PUBLIC
- ---------------------------------
COUNTY OF_____________________
STATE OF_______________________
My commission expires the _____ day of __________, 20__.
<PAGE>
EXHIBIT J-2
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
------------------
[date]
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705
Re: Pooling and Servicing Agreement relating to Washington Mutual
Mortgage Loan Trust Mortgage Pass-Through Certificates,
Series 2000-1
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraphs 3, 4, 6, 7 and 10 thereof is not
true, and has no reason to believe that the Transferee has the intention to
impede the assessment or collection of any federal, state or local taxes
legally required to be paid with respect to a Residual Certificate. In
addition, the Transferor has conducted a reasonable investigation at the time
of the transfer and found that the Transferee had historically paid its debts
as they came due and found no significant evidence to indicate that the
Transferee will not continue to pay its debts as they become due.
Very truly yours,
By: ______________________________
Name:
Title:
<PAGE>
EXHIBIT K
FORM OF NOTE ALLONGE
NOTE ALLONGE
Pay the note affixed to this allonge to the order of
_______________________________, without recourse.
WASHINGTON MUTUAL BANK, FA*
By: __________________________________
Name:
Title:
- --------
o Or, as applicable: WASHINGTON MUTUAL BANK, FA
(formerly known as American Savings Bank, FA)
WASHINGTON MUTUAL BANK, FA
(successor in interest to Great Western Bank, a FSB)
WASHINGTON MUTUAL BANK, FA
(successor in interest to Home Savings of America, FSB)
<PAGE>
