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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
Reported) January 14, 2000
GREENWICH CAPITAL ACCEPTANCE, INC. (as depositor under the Pooling
and Servicing Agreement, dated as of December 1, 1999, relating to
the Fifth Third Mortgage Loan Trust 1999-1 Mortgage Loan Pass-Through
Certificates, Series 1999-1).
GREENWICH CAPITAL ACCEPTANCE, INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 333-90547 06-1442101
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
600 Steamboat Road
Greenwich, Connecticut 06830
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Address of Principal (Zip Code)
Executive Offices)
</TABLE>
Registrant's telephone number, including area code (203) 625-2700
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<PAGE>
Item 5. Other Events.
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On December 29, 1999, Greenwich Capital Acceptance, Inc. entered into
a Pooling and Servicing Agreement dated as of December 1, 1999 (the "Pooling
and Servicing Agreement"), by and among Greenwich Capital Acceptance, Inc., as
depositor, Fifth Third Bank affiliates, as sellers (the "Sellers"), Fifth
Third Bank, as master servicer and Bank One, National Association, as trustee
and into a Mortgage Loan Purchase Agreement dated as of December 1, 1999 (the
"Mortgage Loan Purchase Agreement"), by and among Greenwich Capital
Acceptance, Inc., as purchaser, the Sellers and Fifth Third Bank. The Pooling
and Servicing Agreement is annexed hereto as Exhibit 10.1 and the Mortgage
Loan Purchase Agreement is annexed hereto as Exhibit 10.2.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial
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Information and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
10.1 Pooling and Servicing Agreement
10.2 Mortgage Loan Purchase Agreement
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GREENWICH CAPITAL ACCEPTANCE, INC.
By:/s/ John Graham
_________________________________
Name: John Graham
Title: Vice President
Dated: January 11, 2000
<PAGE>
Exhibit Index
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Exhibit Page
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10.1 Pooling and Servicing Agreement
10.2 Mortgage Loan Purchase Agreement
EXHIBIT 10.1
EXECUTION COPY
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GREENWICH CAPITAL ACCEPTANCE, INC.,
Depositor
THE FIFTH THIRD BANK AFFILIATES NAMED HEREIN,
Sellers
FIFTH THIRD BANK,
Master Servicer
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1999
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Fifth Third Mortgage Loan Trust 1999-1
Pass-Through Certificates, Series 1999-1
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<PAGE>
Table of Contents
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.......................................2
Section 1.02. Accounting.........................................28
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.......................28
Section 2.02. Acceptance by Trustee..............................31
Section 2.03. Repurchase or Substitution of Mortgage Loans by
a Seller...........................................33
Section 2.04. Representations and Warranties of the Sellers
with Respect to the Mortgage Loans................35
Section 2.05. Representations, Warranties and Covenants of the
Master Servicer....................................36
Section 2.06. Representations and Warranties of the Depositor....38
Section 2.07. Issuance of Certificates...........................40
Section 2.08. Representations and Warranties of the Sellers......40
Section 2.09. Covenants of the Sellers...........................42
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.................42
Section 3.02. Sub-Servicing Agreements Between Master Servicer
and Sub-Servicers..................................44
Section 3.03. Successor Sub-Servicers............................45
Section 3.04. Liability of the Master Servicer...................45
Section 3.05. No Contractual Relationship Between Sub-Servicers
and the Trustee or Certificateholders..............46
Section 3.06. Assumption or Termination of Sub-Servicing
Agreements by Trustee..............................46
Section 3.07. Collection of Certain Mortgage Loan Payments.......46
Section 3.08. Sub-Servicing Accounts.............................47
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.................................48
Section 3.10. Collection Account and Distribution Account........48
Section 3.11. Withdrawals from the Collection Account and
Distribution Account...............................50
Section 3.12. Investment of Funds in the Collection Account......52
Section 3.13. [Reserved].........................................53
Section 3.14. Maintenance of Hazard Insurance, Primary
Insurance Polices and Errors and Omissions and
Fidelity Coverage..................................53
Section 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.........................................55
Section 3.16. Realization upon Defaulted Mortgage Loans..........56
Section 3.17. Trustee to Cooperate; Release of Mortgage Files....58
Section 3.18. Servicing Compensation.............................59
Section 3.19. Reports to the Trustee; Collection Account
Statements.........................................59
Section 3.20. Statement as to Compliance.........................59
Section 3.21. Independent Public Accountants' Servicing Report...60
Section 3.22. Access to Certain Documentation; Filing of
Reports by Trustee.................................60
Section 3.23. Title, Management and Disposition of REO Property..61
Section 3.24. Obligations of the Master Servicer in Respect
of Prepayment Interest Shortfalls..................64
Section 3.25. [Reserved].........................................64
Section 3.26. Obligations of the Master Servicer in Respect of
Adjustments........................................64
Section 3.27. Solicitations......................................65
ARTICLE IV
FLOW OF FUNDS
Section 4.01. Distributions......................................65
Section 4.02. Allocation of Realized Losses and Excess Losses....67
Section 4.03. Statements.........................................67
Section 4.04. Remittance Reports; Advances.......................70
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates...................................71
Section 5.02. Registration of Transfer and Exchange of
Certificates.......................................72
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..76
Section 5.04. Persons Deemed Owners..............................76
Section 5.05. Appointment of Paying Agent........................77
ARTICLE VI
THE SELLERS, THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Sellers, the Master Servicer
and the Depositor..................................77
Section 6.02. Merger or Consolidation of, or Assumption of
the Obligations of, any Seller, the Master
Servicer or the Depositor..........................77
Section 6.03. Limitation on Liability of the Master Servicer
and Others.........................................78
Section 6.04. Master Servicer Not to Resign......................78
Section 6.05. Delegation of Duties...............................79
ARTICLE VII
DEFAULT
Section 7.01. Master Servicer Events of Termination..............79
Section 7.02. Trustee to Act; Appointment of Successor...........81
Section 7.03. Waiver of Master Servicer Events of Termination....82
Section 7.04. Notification to Certificateholders.................82
Section 7.05. Survivability of Master Servicer Liabilities.......82
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties of Trustee..................................82
Section 8.02. Certain Matters Affecting the Trustee..............84
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans..............................................85
Section 8.04. Trustee May Own Certificates.......................86
Section 8.05. Trustee's Fees and Expenses........................86
Section 8.06. Eligibility Requirements for Trustee...............86
Section 8.07. Resignation or Removal of Trustee..................87
Section 8.08. Successor Trustee..................................87
Section 8.09. Merger or Consolidation of Trustee.................88
Section 8.10. Appointment of Co-Trustee or Separate Trustee......88
Section 8.11. Limitation of Liability............................89
Section 8.12. Trustee May Enforce Claims Without Possession
of Certificates....................................89
Section 8.13. Suits for Enforcement..............................90
Section 8.14. Waiver of Bond Requirement.........................90
Section 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement........................................90
Section 8.16. Appointment of Custodians..........................90
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01. REMIC Administration...............................91
Section 9.02. Prohibited Transactions and Activities.............93
Section 9.03. Indemnification with Respect to Certain Taxes
and Loss of REMIC Status...........................93
Section 9.04. REO Property.......................................93
ARTICLE X
TERMINATION
Section 10.01. Termination........................................94
Section 10.02. Additional Termination Requirements................96
ARTICLE XI
Reserved
<PAGE>
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment..........................................96
Section 12.02. Recordation of Agreement; Counterparts.............98
Section 12.03. Limitation on Rights of Certificateholders.........98
Section 12.04. Governing Law; Jurisdiction........................99
Section 12.05. Notices............................................99
Section 12.06. Severability of Provisions........................100
Section 12.07. Article and Section References....................100
Section 12.08. Notice to the Rating Agencies.....................100
Section 12.09. Further Assurances................................101
Section 12.10. Benefits of Agreement.............................101
Section 12.11. Acts of Certificateholders........................101
<PAGE>
EXHIBITS AND SCHEDULES:
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Exhibit A Form of Class A-1 Certificates
Exhibit B Form of Class B-1 and Class B-2 Certificates
Exhibit C Form of Class R Certificates
Exhibit D Form of Custodial Agreement
Exhibit E Request for Release
Exhibit F-1 Form of Trustee's Initial Certification
Exhibit F-2 Form of Trustee's Final Certification
Exhibit F-3 Form of Receipt of Mortgage Note
Exhibit G Form of Lost Note Affidavit
Exhibit H Form of ERISA Representation
Exhibit I Form of Investment Letter
Exhibit J Form of Class R Certificate Transfer Affidavit
Exhibit K Form of Transferor Certificate
Exhibit L Form of Liquidation Report
Schedule A Mortgage Loan Schedule with respect to Fifth Third
Mortgage Company
Schedule B Mortgage Loan Schedule with respect to Fifth Third Bank,
Central Ohio
Schedule C Mortgage Loan Schedule with respect to Fifth Third Bank, Florida
Schedule D Mortgage Loan Schedule with respect to Fifth Third Bank, Indiana
Schedule E Mortgage Loan Schedule with respect to Fifth Third Bank,
Kentucky, Inc.
Schedule F Mortgage Loan Schedule with respect to Fifth Third Bank,
Northern Kentucky, Inc.
Schedule G Mortgage Loan Schedule with respect to Fifth Third Bank,
Northwestern Ohio, N.A.
Schedule H Mortgage Loan Schedule with respect to Fifth Third Bank,
Ohio Valley
Schedule I Mortgage Loan Schedule with respect to Fifth Third Bank,
Southwest, F.S.B.
<PAGE>
This Pooling and Servicing Agreement is dated as of December 1, 1999
(the "Agreement"), among GREENWICH CAPITAL ACCEPTANCE, INC., as depositor (the
"Depositor"), THE FIFTH THIRD BANK AFFILIATES NAMED HEREIN, as sellers (the
"Sellers"), FIFTH THIRD BANK, as master servicer (the "Master Servicer"), and
BANK ONE, NATIONAL ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple
classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Trust Fund created hereunder. The Certificates will consist of
five classes of certificates, designated as (i) the Class A-1 Certificates,
(ii) the Class A-2 Certificates, (iii) the Class B-1 Certificates, (iv) the
Class B-2 Certificates and (v) the Class R Certificates.
As provided herein, the Trustee shall elect that Loan Group I will be
treated for federal income tax purposes as a real estate mortgage investment
conduit ("REMIC I") and that Loan Group II will be treated as a separate real
estate mortgage investment conduit ("REMIC II"). The Class A-1 and Class B-1
Certificates represent ownership of all of the "regular interests" in REMIC I
and the Class A-2 and Class B-2 Certificates represent ownership of all the
"regular interests" in REMIC II, and the Class R Certificates represent the
beneficial ownership of the sole class of "residual interests" in REMIC I and
the sole class of "residual interests" in REMIC II for purposes of the REMIC
Provisions.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate, Original Class Certificate Principal Balance and Assumed
Final Maturity Date for each Class of Certificates comprising the interests in
the Trust Fund created hereunder:
<PAGE>
<TABLE>
<CAPTION>
Original Class
Certificate Principal Pass-Through Assumed Final
Class Balance Rate Maturity Date
<S> <C> <C> <C>
Class A-1................. $ 253,248,700.00 (1) November 2015
Class A-2................. $ 370,894,600.00 (1) November 2030
Class B-1................. $ 8,507,125.62 (1) November 2015
Class B-2................. $ 18,496,116.84 (1) November 2030
============================== ============================ ======================= ====================================
Class R................... N/A N/A N/A
============================== ============================ ======================= ====================================
</TABLE>
(i) (1) Calculated pursuant to the definition of Pass-Through Rate.
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. All other calculations of interest
described herein shall be made on the basis of an assumed 360-day year
consisting of twelve 30-day months.
Many of the defined terms listed below may apply to both Loan Groups
/ Certificate Groups and are sometimes used in this Agreement to refer to a
particular Loan Group / Certificate Group by the adjectival use of the words
"Group I" and "Group II".
"1933 Act": The Securities Act of 1933, as amended.
"Account": Either the Collection Account or the Distribution Account.
"Accrual Period": With respect to each Distribution Date, the
calendar month prior to the month of that Distribution Date, calculated on the
basis of an assumed 360 day year consisting of twelve 30-day months.
"Advance": As to any Mortgage Loan or REO Property, any advance made
by the Master Servicer in respect of any Distribution Date pursuant to Section
4.04.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise and "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"Agreement": This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"Applicable Regulations": As to any Mortgage Loan, all federal, state
and local laws, statutes, rules and regulations applicable thereto.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to
reflect or record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": The sum of the Group I Available Funds and Group
II Available Funds.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Coverage Termination Date": With respect to each Loan
Group, the point in time at which the related Bankruptcy Loss Coverage Amount
is reduced to zero.
"Bankruptcy Loss": With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction; provided, however, that a Bankruptcy Loss
shall not be deemed a Bankruptcy Loss hereunder so long as the Master Servicer
has notified the Trustee in writing that the Master Servicer is diligently
pursuing any remedies that may exist in connection with the related Mortgage
Loan and either (A) the related Mortgage Loan is not in default with regard to
payments due thereunder or (B) delinquent payments of principal and interest
under the related Mortgage Loan and any related escrow payments in respect of
the Mortgage Loan are being advanced on a current basis by the Master
Servicer, in either case without giving effect to any Debt Service Reduction
or Deficient Valuation.
"Bankruptcy Loss Coverage Amount": As of any Determination Date and
each Loan Group, the Bankruptcy Loss Coverage Amount shall equal the Initial
Bankruptcy Coverage Amount for that Loan Group as reduced by (i) the aggregate
amount of Bankruptcy Losses allocated to the related Class of Subordinate
Certificates since the Cut-off Date and (ii) any permissible reductions in the
Bankruptcy Loss Coverage Amount as evidenced by a letter from each Rating
Agency to the Trustee to the effect that any such reduction will not result in
a downgrading of the then current rating assigned by it to the related Class
of Senior Certificates.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of
which is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the
Closing Date, the Class A-1 and Class A-2 Certificates shall be Book-Entry
Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking or savings institutions in the State of Ohio, the State of New
York or in the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificate Group": Either the Group I Certificates or the Group II
Certificates.
"Certificateholder" or "Holder": The Person in whose name a
Certificate is registered in the Certificate Register, except that a
Disqualified Organization or non-U.S. Person shall not be a Holder of a Class
R Certificate for any purpose hereof.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
"Certificate Principal Balance": With respect to any Class of
Certificates and any Distribution Date, the Certificate Principal Balance
thereof on the Closing Date (the "Original Certificate Principal Balance")
reduced by the sum of (i) all amounts actually distributed in respect of
principal of that Class on all prior Distribution Dates and (ii) the Realized
Losses, including Excess Losses, if any, actually allocated to that Class on
all prior Distribution Dates.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class R Certificate": The Class R Certificate executed by the
Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit C and evidencing the
ownership of the uncertificated Residual Interest in REMIC I and REMIC II.
"Close of Business": As used herein, with respect to any Business Day
and location, 5:00 p.m. at such location.
"Closing Date": December 29, 1999.
"Code": The Internal Revenue Code of 1986 as it may be amended from
time to time.
"Collection Account": The account or accounts created and maintained
by the Master Servicer pursuant to Section 3.10(a), which shall be entitled
"Fifth Third Bank, as Master Servicer for Bank One, National Association, as
Trustee, in trust for registered Holders of Fifth Third Mortgage Loan Trust
1999-1, Mortgage Loan Pass-Through Certificates, Series 1999-1", and which
must be an Eligible Account.
"Compensating Interest": As defined in Section 3.24 hereof.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at 1 Bank One Plaza, Suite
IL1-0126 Chicago, Illinois 60670-0126, Attention: Fifth Third Series 1999-1,
or at such other address as the Trustee may designate from time to time by
notice to the Certificateholders, the Depositor, the Master Servicer and the
Sellers.
"Custodial Agreement": The agreement between the Trustee and Fifth
Third Bank, as custodian, dated as of December 1, 1999 substantially in the
form of Exhibit D attached hereto.
"Custodian": A custodian, which (in the case of any Custodian other
than the initial Custodian) shall not be the Depositor, Master Servicer, a
Seller or any affiliate of any of them, appointed pursuant to the Custodial
Agreement. The initial Custodian shall be Fifth Third Bank, a state chartered
Ohio banking corporation, and any successor thereto.
"Cut-off Date": With respect to any Mortgage Loan other than a
Qualified Substitute Mortgage Loan, the Close of Business on December 1, 1999.
With respect to any Qualified Substitute Mortgage Loan, the date designated as
such on the Mortgage Loan Schedule (as amended).
"Cut-off Date Aggregate Principal Balance": With respect to each Loan
Group, the aggregate of the Cut-off Date Principal Balances of the Mortgage
Loans in that Loan Group.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date (or as of the
applicable date of substitution with respect to a Qualified Substitute
Mortgage Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for that Mortgage Loan by a court
of competent jurisdiction in a proceeding under the Bankruptcy Code, unless
the reduction results from a Deficient Valuation.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced
by one or more Qualified Substitute Mortgage Loans.
"Delinquent": Any Mortgage Loan, the Monthly Payment due on a Due
Date with respect to which is not made by the Close of Business on the next
scheduled Due Date for such Mortgage Loan.
"Delivery Date": As defined in Section 2.01 hereof.
"Depositor": Greenwich Capital Acceptance, Inc., a Delaware
corporation, or any successor in interest.
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as
a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of
the Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 20th
day of the month in which that Distribution Date occurs or, if the 20th day is
not a Business Day, the immediately following Business Day.
"Directly Operate": With respect to any REO Property, the furnishing
or rendering of services to the tenants thereof, the management or operation
of such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by either REMIC other than
through an Independent Contractor; provided, however, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into
or renews leases, deals with taxes and insurance, or makes decisions as to
repairs or capital expenditures with respect to such REO Property.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of:
(i) the United States, any state or political subdivision
thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing,
(ii) any 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,
(iii) any organization described in Section 1381(a)(2)(C) of
the Code,
(iv) an "electing large partnership" within the meaning of
Section 775 of the Code or
(v) any other Person so designated by the Trustee based upon an
Opinion of Counsel provided by nationally recognized counsel to the
Trustee that the holding of an ownership interest in a Class R
Certificate by such Person may cause the Trust Fund or any Person
having an ownership interest in any Class of Certificates (other than
such Person) to incur liability for any federal tax imposed under the
Code that would not otherwise be imposed but for the transfer of an
ownership interest in the Class R Certificate to such Person.
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, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "state" and
"international organizations" shall have the meanings set forth in Section
7701 of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Bank One, National Association, as Trustee, in trust
for the registered Certificateholders of Fifth Third Mortgage Loan Trust
1999-1, Mortgage Loan Pass-Through Certificates, Series 1999-1" and which must
be an Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in January 2000.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which that Distribution Date
occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive
of any days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which that
Distribution Date occurs and ending on the first day of the month in which
that Distribution Date occurs.
"Eligible Account": Any of
(i) an account or accounts maintained with a federal or state
chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such
holding company) are rated P-1 by Moody's and F-1 by Fitch, if rated
by Fitch, at the time any amounts are held on deposit therein,
(ii) an account or accounts the deposits in which are fully
insured by the FDIC (to the limits established by it), the uninsured
deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to the Trustee and to
the Rating Agencies, the Certificateholders will have a claim with
respect to the funds in the account or a perfected first priority
security interest against the collateral (which shall be limited to
Permitted Investments) securing those funds that is superior to
claims of any other depositors or creditors of the depository
institution with which such account is maintained,
(iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution,
national banking association or trust company acting in its fiduciary
capacity or
(iv) an account otherwise acceptable to the Rating Agencies
without reduction or withdrawal of its then current ratings of the
Certificates as evidenced by a letter from each Rating Agency to the
Trustee. Eligible Accounts may bear interest.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums and other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Excess Loss": With respect to each Loan Group, the amount of any (i)
Fraud Loss realized after the Fraud Loss Coverage Termination Date, (ii)
Special Hazard Loss realized after the Special Hazard Coverage Termination
Date or (iii) Bankruptcy Loss realized after the Bankruptcy Coverage
Termination Date.
"FDIC": The Federal Deposit Insurance Corporation or any successor
thereto.
"Fannie Mae": The Federal National Mortgage Association or any
successor thereto.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by a Seller or by the Master Servicer pursuant to or as contemplated
by Section 2.03 or 10.01), a determination made by the Master Servicer (and
with respect to which written confirmation by a Servicing Officer shall have
been received by the Trustee) that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Master Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Master Servicer shall maintain records,
prepared by a Servicing Officer, of each Final Recovery Determination made
thereby.
"Fitch": Fitch IBCA, Inc. and its successors.
"Foreclosure Price": The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Fraud Loan": A Liquidated Mortgage Loan as to which a Fraud Loss has
occurred.
"Fraud Losses": With respect to each Loan Group, Realized Losses on
any Mortgage Loans in that Loan Group sustained by reason of a default arising
from fraud, dishonesty or misrepresentation in connection with that Mortgage
Loan, including a loss by reason of the denial of coverage under any related
Primary Insurance Policy because of such fraud, dishonesty or
misrepresentation.
"Fraud Loss Coverage Amount": As of the Closing Date $7,852,674 for
Loan Group I and $11,681,721 for Loan Group II, in each case subject to
reduction from time to time, by the amount of Fraud Losses allocated to the
related Class of Subordinate Certificates. In addition, on each anniversary of
the Cut-off Date, the applicable Fraud Loss Coverage Amount will be reduced as
follows: (a) on the first, second, third and fourth anniversaries of the
Cut-off Date, to an amount equal to the lesser of (i) (A) 2% of the related
then current Group Loan Balance, in the case of the first anniversary, and (B)
1% of the related then current Group Loan Balance, in the case of the second,
third and fourth such anniversaries, and (ii) the excess of the applicable
Fraud Loss Coverage Amount as of the preceding anniversary of the Cut-off Date
over the cumulative amount of Fraud Losses allocated to the related Class of
Subordinate Certificates since such preceding anniversary; and (b) on the
fifth anniversary of the Cut-off Date, to zero.
"Fraud Loss Coverage Termination Date": With respect to each Loan
Group, the point in time at which the related Fraud Loss Coverage Amount is
reduced to zero.
"Freddie Mac": The Federal Home Loan Mortgage Corporation or any
successor thereto.
"Group I Available Funds" and "Group II Available Funds": With
respect to any Distribution Date and the applicable Loan Group, an amount
equal to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on or prior to the Determination Date, (b) Liquidation
Proceeds, Insurance Proceeds, Principal Prepayments and other unscheduled
recoveries of principal and interest in respect of the Mortgage Loans in the
related Loan Group during the related Prepayment Period, (c) the aggregate of
any amounts received in respect of a related REO Property withdrawn from any
REO Account and deposited in the Collection Account for such Distribution
Date, (d) the aggregate of any amounts deposited in the Collection Account by
the Master Servicer in respect of related Prepayment Interest Shortfalls for
that Distribution Date, (e) the aggregate of any related Advances made by the
Master Servicer for that Distribution Date and (f) the aggregate of any
related advances made by the Trustee for that Distribution Date pursuant to
Section 7.02, over (ii) the sum of (a) related amounts reimbursable or payable
to the Master Servicer pursuant to Section 3.11(a), (b) the amount payable to
the Trustee pursuant to Section 8.05 and (c) related amounts deposited in the
Collection Account or the Distribution Account, as the case may be, in error.
"Group I Certificates": The Class A-1 and the Class B-1 Certificates.
"Group I Loan Balance": As of any date, the aggregate of the
Principal Balances of all Mortgage Loans in Loan Group I as of that date.
"Group I Mortgage Loan": A Mortgage Loan that is identified as such
on the Mortgage Loan Schedule.
"Group Principal Distribution Amount": With respect to each Loan
Group and any Distribution Date, the sum of (i) each scheduled payment of
principal collected or advanced on the related Mortgage Loans by the Master
Servicer in respect of the related Due Period, (ii) that portion of the
Purchase Price, representing principal of any repurchased Mortgage Loan in
such Loan Group, deposited to the Collection Account during the related
Prepayment Period, (iii) the principal portion of any related Substitution
Adjustments deposited in the Collection Account during the related Prepayment
Period, (iv) the principal portion of all Insurance Proceeds received during
the related Prepayment Period with respect to Mortgage Loans in that Loan
Group that are not yet Liquidated Mortgage Loans; (v) the principal portion of
all related Net Liquidation Proceeds received during the related Prepayment
Period with respect to Liquidated Mortgage Loans in that Loan Group, (vi) the
principal portion of all partial and full principal prepayments of such
Mortgage Loans applied by the Master Servicer during the related Prepayment
Period, and (vii) on the Distribution Date on which a Loan Group is to be
terminated pursuant to Section 10.01, that portion of the Termination Price,
in respect of principal for that Loan Group.
"Group II Certificates": The Class A-2 and Class B-2 Certificates.
"Group II Loan Balance": As of any date, the aggregate of the
Principal Balances of all Mortgage Loans in Loan Group II as of such date.
"Group II Mortgage Loan": A Mortgage Loan that is identified as such
on the Mortgage Loan Schedule.
"Independent": When used with respect to any specified Person, any
such Person who (a) is in fact independent of the Depositor, the Master
Servicer and their respective Affiliates, (b) does not have any direct
financial interest in or any material indirect financial interest in the
Depositor or the Master Servicer or any Affiliate thereof, and (c) is not
connected with the Depositor or the Master Servicer or any Affiliate thereof
as an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions; provided, however, that a Person shall
not fail to be Independent of the Depositor or the Master Servicer or any
Affiliate thereof merely because such Person is the beneficial owner of 1% or
less of any class of securities issued by the Depositor or the Master Servicer
or any Affiliate thereof, as the case may be.
"Independent Contractor": Either (i) any Person (other than the
Master Servicer) that would be an "independent contractor" with respect to
either REMIC within the meaning of Section 856(d)(3) of the Code if the
related REMIC were a real estate investment trust (except that the ownership
tests set forth in that section shall be considered to be met by any Person
that owns, directly or indirectly, 35% or more of any Class of Certificates),
so long as either REMIC does not receive or derive any income from such Person
and provided that the relationship between such Person and the related REMIC
is at arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the
Trustee has received an Opinion of Counsel to the effect that the taking of
any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8)
of the Code (determined without regard to the exception applicable for
purposes of Section 860D(a) of the Code), or cause any income realized in
respect of such REO Property to fail to qualify as Rents from Real Property.
"Initial Bankruptcy Coverage Amount": $50,000 in the case of Loan
Group I and $50,000 in the case of Loan Group II, as applicable.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate, the amount designated "Initial Certificate Principal Balance" on
the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Distributable Amount": With respect to any Distribution
Date and each Class of Certificates (other than the Class R Certificate), the
sum of (i) the Monthly Interest Distributable Amount for that Class and (ii)
the Unpaid Interest Shortfall for that Class.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any
related Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to
any acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent on a contractual basis for such Due Period and not previously
recovered.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such
Mortgage Loan is removed from the Trust Fund by reason of its being purchased,
sold or replaced pursuant to or as contemplated by Section 2.03 or Section
10.01. With respect to any REO Property, either of the following events: (i) a
Final Recovery Determination is made as to such REO Property; or (ii) such REO
Property is removed from the Trust Fund by reason of its being sold or
purchased pursuant to Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received
by the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's
sale, foreclosure sale or otherwise, or (iii) the repurchase, substitution or
sale of a Mortgage Loan or an REO Property pursuant to or as contemplated by
Section 2.03, Section 3.23 or Section 10.01.
"Liquidation Report": A report to be provided by the Master Servicer
upon request by the Trustee substantially in the form attached hereto in
Exhibit L.
"Loan-to-Value Ratio": As of any date and Mortgage Loan, the
fraction, expressed as a percentage, the numerator of which is the Principal
Balance of the Mortgage Loan, and the denominator of which is the Value of the
related Mortgaged Property.
"Loan Group": Either Loan Group I or Loan Group II, as the context
requires.
"Loan Group Balance": Either the Group I Loan Balance or the Group II
Loan Balance, as applicable.
"Loan Group I": At any time, the Group I Mortgage Loans in the
aggregate and any REO Properties acquired in respect thereof.
"Loan Group II": At any time, the Group II Mortgage Loans in the
aggregate and any REO Properties acquired in respect thereof.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Sellers certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of
the related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit I hereto.
"Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.
"Majority Class R Certificateholders": The Holders of Class R
Certificates evidencing at least a 51% Percentage Interest in the Class R
Certificates.
"Master Servicer": Fifth Third Bank, a state chartered Ohio banking
corporation, or any successor master servicer appointed as herein provided.
"Master Servicer Affiliate": A Person (i) controlling, controlled by
or under common control with the Master Servicer or which is 50% or more owned
by the Master Servicer and (ii) which is qualified to service residential
mortgage loans.
"Master Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Master Servicer Events of Termination": As defined in Section 7.01
hereof.
"Master Servicer Remittance Date": With respect to any Distribution
Date, the Business Day preceding such Distribution Date.
"Monthly Interest Distributable Amount": With respect to each Class
of Certificates (other than the Class R Certificates) and for any Distribution
Date, the amount of interest accrued during the related Accrual Period at the
related Pass-Through Rate on the Certificate Principal Balance of that Class
immediately prior to that Distribution Date.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is
payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation
and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any
reduction in the amount of interest collectible from the related Mortgagor
pursuant to the Relief Act; (b) without giving effect to any extension granted
or agreed to by the Master Servicer pursuant to Section 3.01; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are
paid when due.
"Moody's": Moody's Investors Service, Inc. and its successors.
"Mortgage": The mortgage, deed of trust or other instrument creating
a first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01, Section 2.03(d) or Section 2.10 as from time
to time held as a part of the Trust Fund, the Mortgage Loans so held being
identified in the Mortgage Loan Schedules.
"Mortgage Loan Purchase Agreement": The Agreement between the Sellers
and the Depositor, dated as of December 1, 1999, regarding the transfer of the
Mortgage Loans by the Sellers to or at the direction of the Depositor.
"Mortgage Loan Schedules": As of any date, the list of Mortgage Loans
included in the Trust Fund on such date, separately identifying the Group I
Mortgage Loans and the Group II Mortgage Loans, attached hereto as Schedule A,
Schedule B, Schedule C, Schedule D, Schedule E, Schedule F, Schedule G,
Schedule H and Schedule I. Each Mortgage Loan Schedule shall be prepared by
the applicable Seller and shall set forth the following information with
respect to each Mortgage Loan:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including
the state and zip code;
(iv) a code indicating whether the Mortgaged Property was
represented by the borrower, at the time of origination, as being
owner-occupied;
(v) the type of Residential Dwelling constituting the Mortgaged
Property;
(vi) the original months to maturity;
(vii) the stated remaining months to maturity from the Cut-off
Date based on the original amortization schedule;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Mortgage Rate in effect immediately following the
Cut-off Date;
(x) the date on which the first Monthly Payment is or was due
on the Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment due on the first Due
Date after the Cut-off Date;
(xiii) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(xiv) the original principal amount of the Mortgage Loan;
(xv) the Stated Principal Balance of the Mortgage Loan as of
the Close of Business on the Cut-off Date;
(xvi) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase financing, rate/term refinancing, cash-out refinancing);
(xvii) the Value of the Mortgaged Property;
(xviii) the sale price of the Mortgaged Property, if
applicable; and
(xix) the program code.
Each of the Mortgage Loan Schedules, as in effect from time to time,
shall set forth the following information, as of the Cut-off Date with respect
to the Mortgage Loans sold by the related Seller in the aggregate and by Loan
Group: (1) the number of Mortgage Loans; (2) the current Principal Balance of
the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans. Each of
the Mortgage Loan Schedules shall be amended from time to time by the
applicable Seller in accordance with the provisions of this Agreement.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to each Mortgage Loan and each Mortgage
Loan that becomes an REO Property, the annual rate at which interest accrues
on such Mortgage Loan in accordance with the provisions of the related
Mortgage Note.
"Mortgaged Property": The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Interest Shortfall": With respect to each Loan Group and any
Distribution Date, the sum of (i) any related Net Prepayment Interest
Shortfalls for that date and (ii) any related Relief Act Interest Shortfalls
for that date.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.
"Net Loan Rate": With respect to any Mortgage Loan (or the related
REO Property), as of any date of determination, a per annum rate of interest
equal to the then applicable Mortgage Rate for such Mortgage Loan minus the
Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to each Loan Group
and any Distribution Date, the excess, if any, of any Prepayment Interest
Shortfalls in such Loan Group for such date over the related Compensating
Interest.
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made in respect of a Mortgage Loan or REO Property that, in the good faith
business judgment of the Master Servicer, will not ultimately be recoverable
from Late Collections, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or REO Property as provided herein.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer, the
Sellers or the Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate this Agreement with respect to a Loan
Group pursuant to Section 10.01.
"Original Class Certificate Principal Balance": With respect to the
Class A-1, Class A-2, Class B-1 and Class B-2 Certificates, the corresponding
amounts set forth opposite such Classes above in the Preliminary Statement
and, with respect to the Class R Certificates, zero.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial, as owner or as pledgee.
"Pass-Through Rate": With respect to each of the Class A-1, Class
A-2, Class B-1 and Class B-2 Certificates, as applicable, and for any
Distribution Date, the average of the Net Loan Rates of the Mortgage Loans in
the related Loan Group as of the first day of the month preceding the month in
which that Distribution Date occurs (or, in the case of the first Distribution
Date, the Closing Date), weighted on the basis of the related Principal
Balances as of the first day of such preceding month.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class R Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance represented by such
Certificate and the denominator of which is the Original Class Certificate
Principal Balance of the related Class. With respect to a Class R Certificate,
the portion of the Class evidenced thereby, expressed as a percentage, as
stated on the face of such Certificate; provided, however, that the sum of all
such percentages for each such Class totals 100%.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the
Sellers, the Trustee or any of their respective Affiliates or for which an
Affiliate of the Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof
and subject to supervision and examination by federal and/or state
authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, such depository
institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating
categories of each Rating Agency and provided that each such
investment has an original maturity of no more than 365 days and (B)
any other demand or time deposit or deposit which is fully insured by
the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting
as principal) rated A or higher by both Rating Agencies; provided,
however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (i) above and must
(A) be valued daily at current market prices plus accrued interest or
(B) pursuant to such valuation, be equal, at all times, to 105% of
the cash transferred by the Trustee in exchange for such collateral
and (C), be delivered to the Trustee or, if the Trustee is supplying
the collateral, an agent for the Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by the
Rating Agencies in its highest long-term unsecured rating categories
at the time of such investment or contractual commitment providing
for such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by the Rating Agencies in its
highest short-term unsecured debt rating available at the time of
such investment;
(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by
the Trustee or an affiliate thereof having the highest applicable
rating from Fitch (if rated by Fitch) and Moody's; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies
in writing as a permitted investment of funds backing securities
having ratings equivalent to its highest initial ratings of the
Senior Certificates;
provided, however, that no instrument described hereunder shall
evidence either the right to receive (a) only interest with respect to the
obligations underlying such instrument or (b) both principal and interest
payments derived from obligations underlying such instrument and the interest
and principal payments with respect to such instrument provide a yield to
maturity at par greater than 120% of the yield to maturity at par of the
underlying obligations.
"Permitted Transferee": Any Transferee of a Residual Certificate
other than a Disqualified Organization or a non-U.S. Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Preference Claim": As defined in Section 11.04(d).
"Prepayment Assumption": As defined in the Prospectus Supplement.
"Prepayment Interest Shortfall": With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment in
full during the related Prepayment Period, an amount equal to the excess of
one month's interest at the applicable Net Loan Rate on the amount of such
Principal Prepayment over the amount of interest (adjusted to the Net Loan
Rate) actually paid by the related Mortgagor with respect to such Prepayment
Period. The obligations of the Master Servicer in respect of any Prepayment
Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding such Distribution Date.
"Primary Insurance Policy" Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
"Principal Balance": As to any Mortgage Loan and any day, other than
a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus
all collections credited against the Principal Balance of any such Mortgage
Loan. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan as of the final recovery of related Liquidation Proceeds
and a Principal Balance of zero thereafter. As to any REO Property and any
day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the
full amount of scheduled interest due on any Due Date in any month or months
subsequent to the month of prepayment.
"Prospectus Supplement": That certain Prospectus Supplement dated
December 29, 1999 relating to the initial sale of the Senior Certificates.
"Purchase Price": With respect to any Mortgage Loan or REO Property
to be purchased pursuant to or as contemplated by Section 2.03 or Section
10.01, and as confirmed by an Officers' Certificate from the Master Servicer
to the Trustee, an amount equal to the sum of (i) 100% of the Principal
Balance thereof as of the date of purchase (or such other price as provided in
Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on
such Principal Balance at the applicable Mortgage Rate from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an Advance by
the Master Servicer, which payment or Advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar
month in which the purchase is to be effected, and (y) an REO Property, the
sum of (1) accrued interest on such Principal Balance at the applicable
Mortgage Rate from the Due Date as to which interest was last covered by a
payment by the Mortgagor or an Advance by the Master Servicer through the end
of the calendar month immediately preceding the calendar month in which such
REO Property was acquired, plus (2) REO Imputed Interest for such REO Property
for each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such
purchase is to be effected, net of the total of all net rental income,
Insurance Proceeds, Liquidation Proceeds and Advances that as of the date of
purchase had been distributed as or to cover REO Imputed Interest pursuant to
Section 4.04, (iii) any unreimbursed Servicing Advances and Advances and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv)
any amounts previously withdrawn from the Collection Account in respect of
such Mortgage Loan or REO Property pursuant to Section 3.23, and (v) in the
case of a Mortgage Loan required to be purchased pursuant to Section 2.03,
expenses reasonably incurred or to be incurred by the Master Servicer or the
Trustee in respect of the breach or defect giving rise to the purchase
obligation.
"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 state having jurisdiction over such insurer in connection
with the insurance policy issued by such insurer, duly authorized and licensed
in such states to transact a mortgage guaranty insurance business in such
states and to write the insurance provided by the insurance policy issued by
it, approved as a Fannie Mae-approved mortgage insurer and having a claims
paying ability rating of at least "AA" or equivalent rating by a nationally
recognized statistical rating organization. Any replacement insurer with
respect to a Mortgage Loan must have at least as high a claims paying ability
rating as the insurer it replaces had on the Closing Date.
"Qualified Substitute Mortgage Loan": A mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance,
after application of all scheduled payments of principal and interest due
during or prior to the month of substitution, not in excess of, and not more
than 5% less than, the outstanding principal balance of the Deleted Mortgage
Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) have a Mortgage Rate not less than (and not more than one
percentage point in excess of) the Mortgage Rate of the Deleted Mortgage Loan,
(iii) have a remaining term to maturity not greater than (and not more than
one year less than) that of the Deleted Mortgage Loan, (iv) be current as of
the date of substitution, (v) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (vi) have a risk grading determined by the
applicable Seller to be at least equal to the risk grading assigned on the
Deleted Mortgage Loan, (vii) have been underwritten or re-underwritten by the
applicable Seller in accordance with the same underwriting criteria and
guidelines as the Deleted Mortgage Loan and (viii) conform to each
representation and warranty set forth in Section 2.04 hereof applicable to the
Deleted Mortgage Loan. In the event that one or more mortgage loans are
substituted for one or more Deleted Mortgage Loans, the amounts described in
clause (i) hereof shall be determined on the basis of aggregate principal
balances, the Mortgage Rates described in clause (ii) hereof shall be
determined on the basis of weighted average Mortgage Rates, the terms
described in clause (iii) hereof shall be determined on the basis of weighted
average remaining term to maturity, the Loan-to-Value Ratios described in
clause (v) hereof shall be satisfied as to each such mortgage loan, the risk
gradings described in clause (vi) hereof shall be satisfied as to each such
mortgage loan, and, except to the extent otherwise provided in this sentence,
the representations and warranties described in clause (viii) hereof must be
satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate,
as the case may be.
"Rating Agencies": Fitch and Moody's or their respective successors.
If either such agency or its successors shall no longer be in existence,
"Rating Agencies" shall include such nationally recognized statistical rating
agency, or other comparable Person, as shall have been designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Master Servicer.
"Realized Loss": With respect to any Liquidated Mortgage Loan, the
amount of loss realized equal to the portion of the Principal Balance
remaining unpaid after application of all Net Liquidation Proceeds in respect
of such Mortgage Loan.
"Record Date": The last day of the calendar month preceding the month
in which the related Distribution Date occurs.
"Regular Certificate": Any of the Class A-1, Class A-2, Class B-1 or
Class B-2 Certificates.
"Related Loan Group": With respect to the Group I Certificates, Loan
Group I and with respect to the Group II Certificates, Loan Group II.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution
Date and each Loan Group, for any Mortgage Loan in that Loan Group as to which
there has been a reduction in the amount of interest collectible thereon for
the most recently ended Due Period as a result of the application of the
Relief Act, the amount by which (i) interest collectible on that Mortgage Loan
during such Due Period is less than (ii) one month's interest on the Principal
Balance of such Mortgage Loan at the Loan Rate for such Mortgage Loan before
giving effect to the application of the Relief Act.
"REMIC": Either REMIC I or REMIC II, as the context may require.
"REMIC I" and "REMIC II": Each as defined in the Preliminary
Statement on page 1 hereof.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee pursuant to Section 4.04.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property
on behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar
month during which such REO Property was at any time part of the Trust Fund,
one month's interest at the applicable Net Loan Rate on the Principal Balance
of such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the Close of Business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for
any calendar month, the excess, if any, of (a) the aggregate of all amounts
received in respect of such REO Property during such calendar month, whether
in the form of rental income, sale proceeds (including, without limitation,
that portion of the Termination Price paid in connection with a purchase of
all of the Mortgage Loans and REO Properties pursuant to Section 10.01 that is
allocable to such REO Property) or otherwise, net of any portion of such
amounts (i) payable pursuant to Section 3.23 in respect of the proper
operation, management and maintenance of such REO Property or (ii) payable or
reimbursable to the Master Servicer pursuant to Section 3.23 for unpaid
Servicing Fees in respect of the related Mortgage Loan and unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO
Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer
on behalf of the Trust Fund through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project, (iv) a manufactured home,
or (v) a detached one-family dwelling in a planned unit development, none of
which is a co-operative or mobile home.
"Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman
or Vice Chairman of the Executive or Standing Committee of the Board of
Directors or Trustees, the President, any vice president, any assistant vice
president, the Secretary, any assistant secretary, the Treasurer, any
assistant treasurer, the Cashier, any assistant cashier, any trust officer or
assistant trust officer, the Controller and any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and, with respect to a
particular matter, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Sellers": The following affiliates of Fifth Third Bank and their
respective successors in interest, each in its capacity as a seller under this
Agreement:
(a) Fifth Third Mortgage Company
(b) Fifth Third Bank, Central Ohio
(c) Fifth Third Bank, Florida
(d) Fifth Third Bank, Indiana
(e) Fifth Third Bank, Kentucky, Inc.
(f) Fifth Third Bank, Northern Kentucky, Inc.
(g) Fifth Third Bank, Northwestern Ohio, N.A.
(h) Fifth Third Bank, Ohio Valley
(i) Fifth Third Bank, Southwest, F.S.B.
"Senior Certificate": Any one of the Class A-1 Certificates or Class
A-2 Certificates as designated on the face thereof substantially in the form
annexed hereto as Exhibit A, executed by the Trustee and authenticated and
delivered by the Trustee, representing the right to distributions as set forth
herein and therein.
"Senior Certificateholder": Any Holder of a Senior Certificate.
"Senior Percentage": With respect to each Certificate Group and any
Distribution Date, the percentage equivalent of a fraction the numerator of
which is the Certificate Principal Balance of the related Class of Senior
Certificates on that Distribution Date and the denominator of which is the
aggregate of the Certificate Principal Balances of the Classes of Senior and
Subordinate Certificates in that Certificate Group on that Distribution Date.
"Senior Prepayment Percentage": With respect to each Certificate
Group and any Distribution Date up to and including the Distribution Date
occurring in December 2004, 100%; thereafter, as follows: (i) from January
2005 through December 2005, the related Senior Percentage plus 70% of the
related Subordinate Percentage for that Distribution Date; (ii) from January
2006 through December 2006, the related Senior Percentage plus 60% of the
related Subordinate Percentage for that Distribution Date; (iii) from January
2007 through December 2007, the related Senior Percentage plus 40% of the
related Subordinate Percentage for that Distribution Date; (iv) from January
2008 through December 2008, the related Senior Percentage plus 20% of the
related Subordinate Percentage for that Distribution Date; and (v) from and
after January 2009, the related Senior Percentage for that Distribution Date;
provided, however, that if on any Distribution Date the Senior Percentage
exceeds the initial Senior Percentage, the Senior Prepayment Percentage for
that Distribution Date will equal 100%. Notwithstanding the foregoing, no
decrease in the Senior Prepayment Percentage will occur unless both of the
Senior Step Down Conditions are satisfied for the related Loan Group.
"Senior Principal Distribution Amount": With respect to each
Certificate Group and for any Distribution Date, the sum of (1) the related
Senior Percentage of all amounts described in clauses (i) through (iv) of the
definition of "Group Principal Distribution Amount" for that Distribution
Date, (2) with respect to each Mortgage Loan in the related Loan Group that
became a Liquidated Mortgage Loan during the Prepayment Period in which that
Distribution Date occurs, the lesser of (x) the Senior Percentage of the
Stated Principal Balance of that Mortgage Loan and (y) the related Senior
Prepayment Percentage of the amount of the Liquidation Proceeds allocable to
principal received with respect to that Mortgage Loan, and (3) the related
Senior Prepayment Percentage of the amounts described in clause (vi) of the
definition of "Group Principal Distribution Amount" for that Distribution
Date.
"Senior Step Down Conditions": With respect to each Certificate Group
and as of the first Distribution Date as to which any decrease in the related
Senior Prepayment Percentage applies, (i) the outstanding Principal Balance of
all Mortgage Loans in the related Loan Group Delinquent 60 days or more
(averaged over the preceding six month period), as a percentage of the
Certificate Principal Balance of the related Class of Subordinate Certificates
on that Distribution Date, does not equal or exceed 50% and (ii) cumulative
Realized Losses with respect to the Mortgage Loans in the related Loan Group
do not exceed (a) with respect to the Distribution Date on the fifth
anniversary of the first Distribution Date, 30% of the Original Certificate
Principal Balance of that Class, (b) with respect to the Distribution Date on
the sixth anniversary of the first Distribution Date, 35% of the Original
Certificate Principal Balance of that Class, (c) with respect to the
Distribution Date on the seventh anniversary of the first Distribution Date,
40% of the Original Certificate Principal Balance of that Class, (d) with
respect to the Distribution Date on the eighth anniversary of the first
Distribution Date, 45% of the Original Certificate Principal Balance of that
Class and (e) with respect to the Distribution Date on the ninth anniversary
of the first Distribution Date, 50% of the Original Certificate Principal
Balance of that Class.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and expenses)
incurred by the Master Servicer in the performance of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration, inspection and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Sections 3.01, 3.09, 3.16, and 3.23.
"Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of
any payment of interest which accompanies a Principal Prepayment in full made
by the Mortgagor during such calendar month, interest for the number of days
covered by such payment of interest) at the Servicing Fee Rate on the same
principal amount on which interest on such Mortgage Loan accrues for such
calendar month. The Servicing Fee may be retained by any Sub-Servicer as its
servicing compensation.
"Servicing Fee Rate": 0.25% per annum.
"Servicing Officer": Any officer of the Master Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished
by the Master Servicer to the Trustee and the Depositor on the Closing Date,
as such list may from time to time be amended.
"Servicing Standard": The standards set forth in Section 3.01.
"Special Hazard Coverage Termination Date": With respect to each
Certificate Group, the point in time at which the related Special Hazard Loss
Coverage Amount is reduced to zero.
"Special Hazard Loss": Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss but not including (i) any loss of
a type covered by a hazard insurance policy or a flood insurance policy
required to be maintained with respect to such Mortgaged Property pursuant to
Section 3.23 to the extent of the amount of such loss covered thereby, or (ii)
any loss caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of the
Trustee, the Master Servicer or any of their agents or employees (without
regard to any portion of the loss not covered by any errors and omissions
policy);
(c) errors in design, faulty workmanship or faulty materials, unless
the collapse of the property or a part thereof ensues and then only for the
ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or radioactive
or chemical contamination, all whether controlled or uncontrolled, and whether
such loss be direct or indirect, proximate or remote or be in whole or in part
caused by, contributed to or aggravated by a peril covered by the definition
of the term "Special Hazard Loss";
(e) hostile or warlike action in time of peace and war, including
action in hindering, combating or defending against an actual, impending or
expected attack:
1. by any government or sovereign power, de jure or de facto,
or by any authority maintaining or using military, naval or air
forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or
forces;
(f) any weapon of war employing nuclear fission, fusion or other
radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped power or
action taken by governmental authority in hindering, combating or defending
against such an occurrence, seizure or destruction under quarantine or customs
regulations, confiscation by order of any government or public authority or
risks of contraband or illegal transportation or trade.
"Special Hazard Loss Coverage Amount": With respect to the first
Distribution Date, $2,862,736 for Loan Group I and $3,893,907 for Loan Group
II . With respect to each Loan Group and any Distribution Date after the first
Distribution Date, the lesser of (a) the greater of (i) 1% of the aggregate of
the Principal Balances of the Mortgage Loans in that Loan Group and (ii) twice
the Principal Balance of the largest Mortgage Loan in that Loan Group and (b)
the related Special Hazard Loss Coverage Amount as of the Closing Date less
the amount, if any, of Special Hazard Losses allocated to the related
Subordinate Certificates since the Closing Date. All Principal Balances for
the purpose of this definition will be calculated as of the first day of the
calendar month preceding the month of such Distribution Date after giving
effect to scheduled payments on the Mortgage Loans then due, whether or not
paid.
"Special Hazard Mortgage Loan": A Liquidated Mortgage Loan as to
which a Special Hazard Loss has occurred.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan: (a) as
of any date of determination up to but not including the Distribution Date on
which the proceeds, if any, of a Liquidation Event with respect to such
Mortgage Loan would be distributed, the outstanding principal balance of such
Mortgage Loan as of the Cut-off Date, as shown in the applicable Mortgage Loan
Schedule, minus the sum of (i) the principal portion of each Monthly Payment
due on a Due Date subsequent to the Cut-off Date, to the extent received from
the Mortgagor or advanced by the Master Servicer and distributed pursuant to
Section 4.01 on or before such date of determination, (ii) all Principal
Prepayments received after the Cut-off Date, to the extent distributed
pursuant to Section 4.01 on or before such date of determination, (iii) all
Liquidation Proceeds and Insurance Proceeds applied by the Master Servicer as
recoveries of principal in accordance with the provisions of Section 3.16, to
the extent distributed pursuant to Section 4.01 on or before such date of
determination, and (iv) any Realized Loss incurred with respect thereto as a
result of a Deficient Valuation made during or prior to the Due Period for the
most recent Distribution Date coinciding with or preceding such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such Mortgage Loan would be distributed,
zero. With respect to any REO Property: (x) as of any date of determination up
to but not including the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, an
amount (not less than zero) equal to the Stated Principal Balance of the
related Mortgage Loan as of the date on which such REO Property was acquired
on behalf of the Trust Fund, minus the aggregate amount of REO Principal
Amortization in respect of such REO Property for all previously ended calendar
months, to the extent distributed pursuant to Section 4.01 on or before such
date of determination; and (y) as of any date of determination coinciding with
or subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed,
zero.
"Subordinate Certificate": Any one of the Class B-1 Certificates or
Class B-2 Certificates as designated on the face thereof substantially in the
form annexed hereto as Exhibit B, executed by the Trustee and authenticated
and delivered by the Trustee, representing the right to distributions as set
forth herein and therein.
"Subordinated Percentage": With respect to each Certificate Group and
any Distribution Date, the difference between 100% and the related Senior
Percentage for that Distribution Date.
"Subordinated Prepayment Percentage": With respect to each
Certificate Group and any Distribution Date, the difference between 100% and
the related Senior Prepayment Percentage for that Distribution Date.
"Subordinated Principal Distribution Amount": With respect to each
Certificate Group and any Distribution Date, an amount equal to the sum of (1)
the Subordinated Percentage of all amounts described in clauses (i) through
(iv) of the definition of "Group Principal Distribution Amount" for that
Distribution Date, (2) with respect to each Mortgage Loan in the related Loan
Group that became a Liquidated Mortgage Loan during the Prepayment Period in
which that Distribution Date occurs the amount of the Liquidation Proceeds
allocated to principal received with respect thereto remaining after
application thereof pursuant to clause (2) of the definition of Senior
Principal Distribution Amount, up to the Subordinated Percentage of the Stated
Principal Balance of such Mortgage Loan and (3) the Subordinated Prepayment
Percentage of all amounts described in clause (vi) of the definition of "Group
Principal Distribution Amount" for that Distribution Date.
"Sub-Servicer": Any Person with which either Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer
which meets the requirements set forth in Section 3.08 and is otherwise
acceptable to the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub-Servicer relating to servicing and administration of
certain Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment": As defined in Section 2.03(d) hereof.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the REMIC Trust in its capacity as a REMIC
under the REMIC Provisions, together with any and all other information
reports or returns that may be required to be furnished to the
Certificateholders of the related Certificate Group or filed with the Internal
Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
"Termination Price": As defined in Section 10.01(a) hereof.
"Trust": Fifth Third Mortgage Loan Trust 1999-1, the trust created
hereunder.
"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered
hereunder, with respect to a portion of which REMIC election is to be made,
such entire Trust Fund consisting of: (i) such Mortgage Loans as from time to
time are subject to this Agreement, together with the Mortgage Files relating
thereto, and together with all collections thereon and proceeds thereof, (ii)
any REO Property, together with all collections thereon and proceeds thereof,
(iii) the Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to this Agreement and
any proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan
Purchase Agreement (including any security interest created thereby); (v) the
Collection Account, the Distribution Account (subject to the last sentence of
this definition) and any REO Account and such assets that are deposited
therein from time to time and any investments thereof, together with any and
all income, proceeds and payments with respect thereto. Notwithstanding the
foregoing, however, the Trust Fund specifically excludes (1) all payments and
other collections of principal and interest due on the Mortgage Loans on or
before the Cut-off Date and (2) all income and gain realized from Permitted
Investments of funds on deposit in the Collection Account.
"Trustee": Bank One, National Association, a national banking
association, or any successor trustee appointed as herein provided.
"Trustee's Fee": The amount set forth in Section 8.05 as compensation
to the Trustee for all services rendered by it in the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties of the Trustee hereunder.
"Uninsured Cause": Any cause of damage to a Mortgaged Property such
that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies required to be maintained pursuant to Section
3.14.
"United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation, partnership or other entity treated as a
corporation or partnership for federal income tax purposes (other than a
partnership that is not treated as a U.S. Person pursuant to any applicable
Treasury regulations) created or organized in, or under the laws of, the
United States, any state thereof or the District of Columbia, or an estate the
income of which from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States,
or a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have authority to control all substantial decisions of the trust. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"Unpaid Interest Shortfall Amount": With respect to each Class of
Certificates (other than the Class R Certificates) and (i) the first
Distribution Date, zero, and (ii) any Distribution Date after the first
Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly
Interest Distributable Amount for that Class for the immediately preceding
Distribution Date and (2) the outstanding Unpaid Interest Shortfall Amount, if
any, for that Class for such preceding Distribution Date exceeds (b) the
aggregate amount distributed on that Class in respect of interest pursuant to
clause (a) of this definition on the preceding Distribution Date.
"Value": With respect to any Mortgage Loan, and the related Mortgaged
Property, the lesser of:
(i) the lesser of (a) the value thereof as determined by an
appraisal made for the originator of the Mortgage Loan at the time or
origination of the Mortgage Loan by an appraiser who met the minimum
requirements of Fannie Mae and Freddie Mac, and (b) the value thereof
as determined by a review appraisal conducted by the Sellers in the
event any such review appraisal determines an appraised value more
than 10% lower than the value thereof, in the case of a Mortgaged
Loan with a Loan-to-Value Ratio less than or equal to 80%, or more
than 5% lower than the value thereof, in the case of a Mortgage Loan
with a Loan-to-Value Ratio greater than 80%, as determined by the
appraisal referred to in clause (i)(a) above; and
(ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided, however, that (A) in the case of a refinanced Mortgage Loan (which
is a Mortgage Loan the proceeds of which were not used to purchase the related
Mortgaged Property), such value of the Mortgaged Property is based solely upon
the lesser of (i) the value determined by an appraisal made for the originator
of such refinanced Mortgaged Loan at the time of origination of such
refinanced Mortgage Loan by an appraiser who met the minimum requirements of
Fannie Mae and Freddie Mac and (ii) the value thereof as determined by a
review appraisal conducted by the Sellers in the event any such review
appraisal determines an appraised value more than 10% lower than the value
thereof, in the case of a Mortgage Loan with a Loan-to-Value Ratio less than
or equal to 80%, or more than 5% lower than the value thereof, in the case of
a Mortgage Loan with a Loan-to-Value Ratio greater than 80%, as determined by
the appraisal referred to in clause (ii)(A)(i) above, and (B) in the case of a
Mortgage Loan originated in connection with a "lease option purchase," such
value of the Mortgaged Property is based on the lower of the value determined
by an appraisal made for the originator of such Mortgage Loan at the time of
origination or the sale price of such Mortgaged Property if the "lease option
purchase price" was set less than 12 months prior to origination, and is based
on the value determined by an appraisal made for the originator of such
Mortgage Loan at the time of the origination if the "lease option purchase
price" was set 12 months or more prior to origination.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights
allocated among Holders of such Certificates outstanding shall be the
fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Balance of all the Certificates of such Class then outstanding and
the denominator of which is the aggregate Certificate Balance of all the
Certificates then outstanding; provided, however, the Subordinate and Class R
Certificates shall not be entitled to any voting rights for so long as any
Senior Certificates remain outstanding; provided further that when none of the
Regular Certificates is outstanding, 100% of the Voting Rights shall be
allocated among Holders of the Class R Certificates in accordance with such
Holders' respective Percentage Interests in the Certificates of such Class.
The Voting Rights allocated to a Class of Certificates shall be allocated
among all holders of each such Class in proportion to the outstanding
Certificate Balance of such Certificates; provided, however, that any
Certificate registered in the name of the Master Servicer, the Depositor or
the Trustee or any of their respective affiliates shall not be included in the
calculation of Voting Rights.
Section 1.02. Accounting.
Unless otherwise specified herein, for the purpose of any definition
or calculation, whenever amounts are required to be netted, subtracted or
added or any distributions are taken into account such definition or
calculation and any related definitions or calculations shall be determined
without duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right,
title and interest of the Depositor, including any security interest therein
for the benefit of the Depositor, in and to (i) each Mortgage Loan identified
on the Mortgage Loan Schedules, including the related Cut-off Date Principal
Balance, all interest due thereon after the Cut-off Date and all collections
in respect of interest and principal due after the Cut-off Date; (ii) any real
property that secured each such Mortgage Loan and that has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) the Depositor's interest in
any insurance policies in respect of the Mortgage Loans; (iv) all proceeds of
any of the foregoing; and (v) all other assets included or to be included in
the Trust Fund. Such assignment includes all interest and principal due to the
Depositor or the Master Servicer after the Cut-off Date with respect to the
Mortgage Loans.
In connection with such transfer and assignment, each Seller, on
behalf of the Depositor, does hereby deliver on the Closing Date, unless
otherwise specified in this Section 2.01, to, and deposit with the Trustee, or
the Custodian as its designated agent, the following documents or instruments
with respect to each related Mortgage Loan (a "Mortgage File") so transferred
and assigned:
(i) the original Mortgage Note, endorsed either on its
face or by allonge attached thereto (A) in blank, in which
case the Trustee shall cause the endorsement to be
completed upon the request of and at the expense of the
applicable Seller or (B) in the following form: "Pay to the
order of Bank One, National Association, as Trustee under
the Pooling and Servicing Agreement, dated as of December
1, 1999, Fifth Third Mortgage Loan Trust 1999-1, Mortgage
Loan Pass-Through Certificates, Series 1999-1, without
recourse", or with respect to any lost Mortgage Note, an
original Lost Note Affidavit stating that the original
mortgage note was lost, misplaced or destroyed, together
with a copy of the related mortgage note; provided,
however, that such substitutions of Lost Note Affidavits
for original Mortgage Notes may occur only with respect to
Mortgage Loans, the aggregate Cut-off Date Principal
Balance of which is less than or equal to 2.00% of the Pool
Balance as of the Cut-off Date;
(ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage
was executed pursuant to a power of attorney, with evidence
of recording thereon or, if such Mortgage or power of
attorney has been submitted for recording but has not been
returned from the applicable public recording office, has
been lost or is not otherwise available, a copy of such
Mortgage or power of attorney, as the case may be, certified
to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned
either (A) in blank (but otherwise in recordable form) or
(B) to "Bank One, National Association, as Trustee under the
Pooling and Servicing Agreement, dated as of December 1,
1999, Fifth Third Mortgage Loan Trust 1999-1, Mortgage Loan
Pass-Through Certificates, Series 1999-1, without recourse";
(iv) an original copy of any intervening assignment of
Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title
insurance policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
With respect to items (i) and (iii) above, the Seller shall deliver
the required documents to the Trustee, or the Custodian as its designated
agent, within 30 days of the Closing Date. Each Seller shall promptly cause to
be recorded in the appropriate public office for real property records any
assignment delivered by the Custodian to the Seller pursuant to the Custodial
Agreement and, upon receipt thereof from such public office, shall return each
such assignment to the Custodian.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor on or prior to the Closing Date an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit F-3 hereto.
If any of the documents referred to in Section 2.01(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y)
has been lost or such public recording office has retained the original of
such document, the obligations of the applicable Seller to deliver such
documents shall be deemed to be satisfied upon (1) delivery to the Trustee, or
the Custodian on behalf of the Trustee, no later than the Closing Date, of a
copy of each such document certified by that Seller in the case of (x) above
or the applicable public recording office in the case of (y) above to be a
true and complete copy of the original that was submitted for recording and
(2) if such copy is certified by that Seller, delivery to the Trustee, or the
Custodian on behalf of the Trustee, promptly upon receipt thereof of either
the original or a copy of such document certified by the applicable public
recording office to be a true and complete copy of the original. If the
original lender's title insurance policy, or a certified copy thereof, was not
delivered pursuant to Section 2.01(v) above, the applicable Seller shall
deliver or cause to be delivered to the Trustee, or the Custodian on behalf of
the Trustee, the original or a copy of a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow
company, with the original or a certified copy thereof to be delivered to the
Trustee or the Custodian, promptly upon receipt thereof. Each Seller shall
deliver or cause to be delivered to the Trustee, or the Custodian on behalf of
the Trustee, promptly upon receipt thereof any other documents constituting a
part of a Mortgage File received with respect to any Mortgage Loan sold to the
Depositor by that Seller, including, but not limited to, any original
documents evidencing an assumption or modification of any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the
applicable Seller shall have 90 days to cure such defect or deliver such
missing document to the Trustee, or the Custodian on behalf of the Trustee. If
that Seller does not cure such defect or deliver such missing document within
such time period, that Seller shall either repurchase or substitute for such
Mortgage Loan in accordance with Section 2.03. Each Seller shall cause the
Assignments of Mortgage which it delivered in blank to be completed and shall
cause all Assignments referred to in Section 2.01(iii) hereof and, to the
extent necessary, in Section 2.01(iv) hereof to be recorded; provided,
however, that Seller need not cause to be recorded any Assignment which
relates to a Mortgage Loan in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by that Seller to the Trustee and
the Rating Agencies, the recordation of such Assignment is not necessary to
protect the Trustee's interest in the related Mortgage Loan. Each Seller shall
be required to deliver such Assignments for recording within 30 days of the
Closing Date. Each Seller shall furnish the Trustee, or its designated agent,
with a copy of each Assignment of Mortgage submitted for recording. In the
event that any such Assignment is lost or returned unrecorded because of a
defect therein, the applicable Seller shall promptly have a substitute
Assignment prepared or have such defect cured, as the case may be, and
thereafter cause each such Assignment to be duly recorded. In the event that
any Mortgage Note is endorsed in blank as of the Closing Date, promptly
following the Closing Date the applicable Seller shall cause to be completed
such endorsements as follows: "Pay to the order of Bank One, National
Association, as Trustee under the Pooling and Servicing Agreement, dated as of
December 1, 1999, Fifth Third Mortgage Loan Trust 1999-1, without recourse."
The Depositor herewith delivers to the Trustee an executed copy of
the Mortgage Loan Purchase Agreement.
The Master Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two weeks
of their execution; provided, however, that the Master Servicer shall provide
the Custodian with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall provide the original
of any document submitted for recordation or a copy of such document certified
by the appropriate public recording office to be a true and complete copy of
the original within 270 days of its submission for recordation. In the event
that the Master Servicer cannot provide a copy of such document certified by
the public recording office within such 270 day period, the Master Servicer
shall deliver to the Custodian, within such 270 day period, an Officers'
Certificate of the Master Servicer which shall (A) identify the recorded
document, (B) state that the recorded document has not been delivered to the
Custodian due solely to a delay caused by the public recording office, (C)
state the amount of time generally required by the applicable recording office
to record and return a document submitted for recordation, if known, and (D)
specify the date the applicable recorded document is expected to be delivered
to the Custodian, if known, and, upon receipt of a copy of such document
certified by the public recording office, the Master Servicer shall
immediately deliver such document to the Custodian. In the event the
appropriate public recording office will not certify as to the accuracy of
such document, the Master Servicer shall deliver a copy of such document
certified by an officer of the Master Servicer to be a true and complete copy
of the original to the Custodian.
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges the receipt, or acknowledges receipt by the
Custodian acting as its agent subject to the provisions of Section 2.01 and
subject to the review described below and any exceptions noted on the
exception report described in the next paragraph below, of the documents
referred to in Section 2.01 above and all other assets included in the
definition of "Trust Fund" and declares that it holds and will hold such
documents and the other documents delivered to it constituting a Mortgage
File, and that it holds or will hold all such assets and such other assets
included in the definition of "Trust Fund" in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review, or that it has reviewed (or has caused the Custodian on behalf of the
Trustee, to have reviewed) each Mortgage File on or prior to the Closing Date
(or, with respect to any document delivered after the Startup Day, within 45
days of receipt and with respect to any Qualified Substitute Mortgage Loan,
within 45 days after the assignment thereof). The Trustee further agrees, for
the benefit of the Certificateholders, to certify (or has caused the Custodian
on behalf of the Trustee to certify) and deliver to the Depositor, the Master
Servicer and each Rating Agency in substantially the form attached hereto as
Exhibit F-1, within 45 days after the Closing Date (or, with respect to any
document delivered after the Startup Day, within 45 days of receipt and with
respect to any Qualified Substitute Mortgage, within 45 days after the
assignment thereof) that, as to each Mortgage Loan listed in the Mortgage Loan
Schedules (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents required to be delivered to
it pursuant Section 2.01 of this Agreement are in its possession, (ii) such
documents have been reviewed by it and have not been mutilated, damaged or
torn and relate to such Mortgage Loan and (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedules that corresponds to items (i) and (ii) of the Mortgage Loan
Schedules accurately reflects information set forth in the Mortgage File. It
is herein acknowledged that, in conducting such review, the Trustee (or the
Custodian on behalf of the Trustee) is under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other
papers to determine that they are genuine, enforceable, or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face.
Prior to the first anniversary date of this Agreement the Trustee
shall deliver (or cause the Custodian on behalf of the Trustee, to deliver) to
the Depositor and the Master Servicer a final certification in the form
annexed hereto as Exhibit F-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Trustee (or the Custodian on behalf of the Trustee) finds any document or
documents constituting a part of a Mortgage File to be missing or defective in
any material respect, at the conclusion of its review the Trustee shall so
notify the applicable Seller, the Depositor and the Master Servicer. In
addition, upon the discovery by a Seller, the Depositor or the Master Servicer
(or upon receipt by the Trustee of written notification of such breach) of a
breach of any of the representations and warranties made by a Seller in the
related Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which
materially adversely affects such Mortgage Loan or the interests of the
related Certificateholders in such Mortgage Loan, the party discovering such
breach shall give prompt written notice to the other parties to this
Agreement.
The Depositor and the Trustee intend that the assignment and transfer
herein contemplated constitute a sale of the Mortgage Loans, the related
Mortgage Notes and the related documents, conveying good title thereto free
and clear of any liens and encumbrances, from the Depositor to the Trustee and
that such property not be part of the Depositor's estate or property of the
Depositor in the event of any insolvency by the Depositor. In the event that
such conveyance is deemed to be, or to be made as security for, a loan, the
parties intend that the Depositor shall be deemed to have granted and does
hereby grant to the Trustee a first priority perfected security interest in
all of the Depositor's right, title and interest in and to the Mortgage Loans,
the related Mortgage Notes and the related documents, and that this Agreement
shall constitute a security agreement under applicable law.
Section 2.03. Repurchase or Substitution of Mortgage Loans by a
Seller.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or
of the breach by a Seller of any representation, warranty or covenant under
the Mortgage Loan Purchase Agreement or in Section 2.04 in respect of any
Mortgage Loan which materially adversely affects the value of that Mortgage
Loan or the interest therein of the Certificateholders, the Trustee (or the
Custodian on behalf of the Trustee) shall promptly notify the applicable
Seller and the Master Servicer of such defect, missing document or breach and
request that the applicable Seller deliver such missing document or cure such
defect or breach within 90 days from the date that such Seller was notified of
such missing document, defect or breach, and if such Seller does not deliver
such missing document or cure such defect or breach in all material respects
during such period, the Trustee shall enforce such Seller's obligation under
the Mortgage Loan Purchase Agreement and cause such Seller to repurchase that
Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the
Determination Date following the expiration of such 90 day period (subject to
Section 2.03(e)); provided, however, that, in connection with any such breach
that could not reasonably have been cured within such 90 day period, if the
applicable Seller shall have commenced to cure such breach within such 90 day
period, that Seller shall be permitted to proceed thereafter diligently and
expeditiously to cure the same within the additional period provided under the
Mortgage Loan Purchase Agreement; and provided further that, in the case of
the breach of any representation, warranty or covenant made by the Sellers in
Section B of Exhibit A of the Mortgage Loan Purchase Agreement, the Master
Servicer shall be obligated to cure such breach or purchase the affected
Mortgage Loans. The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
applicable Seller the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
applicable Seller shall furnish to it and as shall be necessary to vest in
that Seller any Mortgage Loan released pursuant hereto and the Trustee shall
have no further responsibility with regard to such Mortgage File (it being
understood that the Trustee shall have no responsibility for determining the
sufficiency of such assignment for its intended purpose). In lieu of
repurchasing any such Mortgage Loan as provided above, the applicable Seller
may cause such Mortgage Loan to be removed from the Trust Fund (in which case
it shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.03(d). It is understood and agreed that the obligation of
each Seller to cure or to repurchase (or to substitute for) any Mortgage Loan
as to which a document is missing, a material defect in a constituent document
exists or as to which such a breach has occurred and is continuing shall
constitute the sole remedy against the Sellers respecting such omission,
defect or breach available to the Trustee on behalf of the Certificateholders.
(b) [Reserved]
(c) Within 90 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any
representation, warranty or covenant of the Master Servicer set forth in
Section 2.05 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the Master Servicer shall cure such
breach in all material respects.
(d) Any substitution of Qualified Substitute Mortgage Loans for
Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As
to any Deleted Mortgage Loan for which a Seller substitutes a Qualified
Substitute Mortgage Loan or Loans, such substitution shall be effected by that
Seller delivering to the Trustee, for such Qualified Substitute Mortgage Loan
or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and
such other documents and agreements, with all necessary endorsements thereon,
as are required by Section 2.01, together with an Officers' Certificate
providing that each such Qualified Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Adjustment (as described
below), if any, in connection with such substitution. The Trustee, or the
Custodian on behalf of the Trustee, shall acknowledge receipt for such
Qualified Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, shall review such documents as specified in Section 2.02 and
deliver to the Master Servicer, with respect to such Qualified Substitute
Mortgage Loan or Loans, a certification substantially in the form attached
hereto as Exhibit F-1, with any applicable exceptions noted thereon. Within
one year of the date of substitution, the Trustee, or the Custodian on behalf
of the Trustee, shall deliver to the Master Servicer a certification
substantially in the form of Exhibit F-2 hereto with respect to such Qualified
Substitute Mortgage Loan or Loans, with any applicable exceptions noted
thereon. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution are not part of the Trust Fund and will be
retained by the applicable Seller. For the month of substitution,
distributions to Certificateholders will reflect the collections and
recoveries in respect of such Deleted Mortgage Loan in the Due Period
preceding the month of substitution and the Depositor or the applicable
Seller, as the case may be, shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The applicable
Seller shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
applicable Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee, or the Custodian on behalf of
the Trustee. Upon such substitution, such Qualified Substitute Mortgage Loan
or Loans shall constitute part of the Trust Fund and shall be subject in all
respects to the terms of this Agreement and, in the case of a substitution
effected by a Seller, the Mortgage Loan Purchase Agreement, including, in the
case of a substitution effected by a Seller all applicable representations and
warranties thereof included in the Mortgage Loan Purchase Agreement and all
applicable representations and warranties thereof set forth in Section 2.04,
in each case as of the date of substitution.
For any month in which a Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (each, a "Substitution Adjustment"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate, as to each such Qualified Substitute Mortgage Loan, of
the principal balance thereof as of the date of substitution, together with
one month's interest on such principal balance at the applicable Net Loan
Rate. On the date of such substitution, the applicable Seller will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the related Substitution Adjustment, if any, and
the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or
Loans and certification by the Master Servicer of such deposit, shall release
to the applicable Seller the related Mortgage File or Files and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the applicable Seller shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, each applicable Seller shall obtain at its own expense
and deliver to the Trustee an Opinion of Counsel to the effect that such
substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code, or (b) the REMIC to
fail to qualify as a REMIC at any time that any Certificate is outstanding. If
such Opinion of Counsel can not be delivered, then such substitution may only
be effected at such time as the required Opinion of Counsel can be given.
(e) Upon discovery by a Seller, the Master Servicer or the Trustee
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code, the party discovering such fact
shall within two Business Days give written notice thereof to the other
parties. In connection therewith, the applicable Seller shall repurchase or,
subject to the limitations set forth in Section 2.03(d), substitute one or
more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within
90 days of the earlier of discovery or receipt of such notice with respect to
such affected Mortgage Loan. Any such repurchase or substitution shall be made
in the same manner as set forth in Section 2.03(a), if made by a Seller. The
Trustee shall reconvey to the applicable Seller the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
Section 2.04. Representations and Warranties of the Sellers with
Respect to the Mortgage Loans.
Each Seller hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that, as of the Closing Date or as of such
other date specifically provided herein, the representations and warranties
made by that Seller pursuant to Section 3.01 of the Mortgage Loan Purchase
Agreement are hereby being made to the Trustee and are true and correct as of
the Closing Date.
With respect to the representations and warranties incorporated in
this Section 2.04 that are made to the best of each Seller's knowledge or as
to which each Seller has no knowledge, if it is discovered by the Depositor,
the applicable Seller, the Master Servicer or the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan or the
interest therein of the Certificateholders then, notwithstanding the
applicable Seller's lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation or
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Within 90 days of its discovery or its receipt of notice of any such
missing or materially defective documentation or any such breach of a
representation or warranty, the applicable Seller shall promptly deliver such
missing document or cure such defect or breach in all material respects or, in
the event such defect or breach cannot be cured, the applicable Seller shall
repurchase the affected Mortgage Loan or cause the removal of such Mortgage
Loan from the Trust Fund and substitute for it one or more Qualified
Substitute Mortgage Loans, in either case, in accordance with Section 2.03.
It is understood and agreed that the representations and warranties
incorporated in this Section 2.04 shall survive delivery of the Mortgage Files
to the Trustee and shall inure to the benefit of the Certificateholders
notwithstanding any restrictive or qualified endorsement or assignment. Upon
discovery by any of the Depositor, the Master Servicer, the applicable Seller
or the Trustee of a breach of any of the foregoing representations and
warranties which materially and adversely affects the value of any Mortgage
Loan or the interests therein of the Certificateholders, the party discovering
such breach shall give prompt written notice to the other parties, and in no
event later than two Business Days from the date of such discovery. It is
understood and agreed that the obligations of each Seller set forth in Section
2.03(a) to cure, substitute for or repurchase a related Mortgage Loan pursuant
to the Mortgage Loan Purchase Agreement constitute the sole remedies available
to the Certificateholders or to the Trustee on their behalf respecting a
breach of the representations and warranties incorporated in this Section
2.04.
Section 2.05. Representations, Warranties and Covenants of the Master
Servicer.
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee and the Certificateholders and
to the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
formation and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing
or is exempt from such licensure, qualification or requirement of
good standing in the states where the Mortgaged Property is located
if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Master Servicer or
is a condition to the enforceability or validity of each Mortgage
Loan; the Master Servicer has the power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement)
by the Master Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized and are
part of its official records; this Agreement constitutes the valid,
binding and enforceable obligation of the Master Servicer, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally or the rights of federally insured financial institutions;
and all requisite corporate action has been taken by the Master
Servicer to make this Agreement valid and binding upon the Master
Servicer in accordance with its terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master
Servicer and will not result in the breach of any term or provision
of the charter or by-laws of the Master Servicer or result in the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under,
any agreement, indenture or loan or credit agreement or other
instrument to which the Master Servicer or its property is subject,
or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Master Servicer or its property is
subject;
(iii) The execution and delivery of this Agreement by the
Master Servicer and the performance and compliance with its
obligations and covenants hereunder do not require the consent or
approval of any governmental authority or, if such consent or
approval is required, it has been obtained;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Master
Servicer, constitute and will constitute valid, legal and binding
obligations of the Master Servicer, enforceable in accordance with
their respective terms, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally, or the rights of creditors of federally
insured financial institutions, and general principles of equity;
(v) [Reserved];
(vi) The Master Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(vii) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Master Servicer
that, either individually or in the aggregate, (A) could reasonably
be expected to prohibit or materially and adversely affect the
performance by the Master Servicer of its obligations under, or
validity or enforceability of, this Agreement, or (B) could
reasonably be expected to result in any material impairment of the
right or ability of the Master Servicer to carry on its business
substantially as now conducted, or (C) could reasonably be expected
to result in any material liability on the part of the Master
Servicer, or (D) would draw into question the validity or
enforceability of this Agreement or of any action taken or to be
taken in connection with the obligations of the Master Servicer
contemplated herein, or (E) would otherwise be likely to impair
materially the ability of the Master Servicer to perform under the
terms of this Agreement;
(viii) Neither this Agreement nor any information, certificate
of an officer, statement furnished in writing or report delivered to
the Trustee by the Master Servicer in connection with the
transactions contemplated hereby contains any untrue statement of a
material fact; and
(ix) The Master Servicer (a) acknowledges that its performance
under this Agreement will be adversely affected if it is unable to
become "Year 2000 Compliant" prior to January 1, 2000, (b) has made
an assessment of the microchip and computer-based systems, hardware,
software and other equipment used by the Master Servicer in
connection with such performance (collectively, "Systems") and (c)
confirms that it has developed and is implementing a program to help
assure that its Systems will be Year 2000 Compliant by January 1,
2000. As used herein, "Year 2000 Compliant" means (1) the Systems
process, provide and/or receive (provided data received from third
party providers is Year 2000 Compliant), so as to avoid the
occurrence of a material adverse effect thereon, date data (including
without limitation calculating, comparing, and sequencing), within,
from, into, and between centuries, including leap year calculations,
and (2) none of the performance or the functionality or the Master
Servicer's performance under this Agreement will be materially
adversely affected by dates prior to, on or after January 1, 2000.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Trustee and shall inure to the benefit of the Trustee,
the Depositor and the Certificateholders. Upon discovery by any of the
Depositor, the Master Servicer, a Seller or the Trustee of a breach of any of
the foregoing representations, warranties and covenants which materially and
adversely affects the value of any Mortgage Loan or the interests therein of
the Certificateholders, the party discovering such breach shall give prompt
written notice (but in no event later than two Business Days following such
discovery) to the Master Servicer, the applicable Seller and the Trustee.
Section 2.06. Representations and Warranties of the Depositor.
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general an except as such
enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage
Loan, the Depositor had good and marketable title to each Mortgage
Loan (insofar as such title was conveyed to it by the applicable
Seller) subject to no prior lien, claim, participation interest,
mortgage, security interest, pledge, charge or other encumbrance or
other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all
right, title interest in the Mortgage Loans to the Trustee on behalf
of the Trust;
(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay
or defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Delaware, with full corporate power and authority to own its assets
and conduct its business as presently being conducted;
(vi) The Depositor is not in violation of its certificate of
incorporation or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Depositor is
a party or by which it or its properties may be bound, which default
might result in any material adverse changes in the financial
condition, earnings, affairs or business of the Depositor or which
might materially and adversely affect the properties or assets, taken
as a whole, of the Depositor;
(vii) The execution, delivery and performance of this Agreement
by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the
knowledge of the Depositor, constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Depositor is a party or by which the
Depositor is bound or to which any of the property or assets of the
Depositor is subject, nor will such actions result in any violation
of the provisions of the certificate of incorporation or by-laws of
the Depositor or, to the best of the Depositor's knowledge without
independent investigation, any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Depositor or any of its properties or assets
(except for such conflicts, breaches, violations and defaults as
would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization,
order, registration or qualification of or with any court or
governmental agency or body of the United States or any other
jurisdiction is required for the issuance of the Certificates, or the
consummation by the Depositor of the other transactions contemplated
by this Agreement, except such consents, approvals, authorizations,
registrations or qualifications as (a) may be required under State
securities or "Blue Sky" laws, (b) have been previously obtained or
(c) the failure of which to obtain would not have a material adverse
effect on the performance by the Depositor of its obligations under,
or the validity or enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a)
which if determined adversely to the Depositor would have a material
adverse effect on the business, results of operations or financial
condition of the Depositor; (b) asserting the invalidity of this
Agreement or the Certificates; (c) seeking to prevent the issuance of
the Certificates or the consummation by the Depositor of any of the
transactions contemplated by this Agreement, as the case may be; or
(d) which might materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
Section 2.07. Issuance of Certificates.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to the Custodian on its behalf the Mortgage Files, subject to
the provisions of Sections 2.01 and 2.02, 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 and in exchange
therefor, the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Certificates in
authorized denominations. The interests evidenced by the Certificates
constitute the entire beneficial ownership interest in the Trust Fund.
Section 2.08. Representations and Warranties of the Sellers.
Each Seller hereby represents and warrants to the Trust and the
Trustee on behalf of the Certificateholders that as of the Closing Date or as
of such date specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Seller is
duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it
or properties owned or leased by it requires such qualification and
in which the failure to so qualify would have a material adverse
effect on (a) its business, properties, assets or condition
(financial or other), (b) the performance of its obligations under
this Agreement, (c) the value or marketability of the related
Mortgage Loans, or (d) its ability to foreclose on the related
Mortgaged Properties to the extent such foreclosure is conducted by
the Master Servicer.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement which is part of its official records. When executed and
delivered, this Agreement will constitute the Seller's legal, valid
and binding obligations enforceable in accordance with its terms,
except as enforcement of such terms may be limited by (1) bankruptcy,
insolvency, reorganization, receivership, moratorium or similar laws
affecting the enforcement of creditors' rights generally and the
rights of creditors of federally insured financial institutions and
by the availability of equitable remedies, (2) general equity
principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law) or (3) public policy considerations
underlying the securities laws, to the extent that such policy
considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities
laws liabilities.
(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting
its business as it is presently conducted. It is not required to
obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or
authorizations, or registrations or declarations as shall have been
obtained or filed, as the case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement
by the Seller will not conflict with or result in a breach of, or
constitute a default under, any provision of any existing law or
regulation or any order or decree of any court applicable to the
Seller or any of its properties or any provision of its articles of
incorporation, charter or by-laws, or constitute a material breach
of, or result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to any mortgage,
indenture, contract or other agreement to which it is a party or by
which it may be bound.
(v) No certificate of an officer, written statement or written
report delivered pursuant to the terms hereof of the Seller contains
any untrue statement of a material fact or omits to state any
material fact necessary to make the certificate, statement or report
not misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the related Mortgage Loans to the
Depositor, nor is the Seller aware of any pending insolvency of the
Seller.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by the Seller and its performance and
compliance with the terms of this Agreement will not constitute a
violation with respect to, any order or decree of any court, or any
order or regulation of any federal, state, municipal or governmental
agency having jurisdiction, which violation would materially and
adversely affect the Seller's financial condition (financial or
otherwise) or operations, or materially and adversely affect the
performance of any of its duties hereunder.
(ix) There are no actions or proceedings against the Seller, or
pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal; nor, to the Seller's
knowledge, are there any investigations (i) that, if determined
adversely, would prohibit the Seller from entering into this
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) that, if
determined adversely, would prohibit or materially and adversely
affect the Seller's ability to perform any of its respective
obligations under, or the validity or enforceability of, this
Agreement.
(x) The Seller did not transfer the related Mortgage Loans to
the Depositor with any intent to hinder, delay or defraud any of its
creditors.
(xi) The Seller acquired title to the related Mortgage Loans in
good faith, without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the related
Mortgage Notes and the related Mortgages by the Seller to the
Depositor are not subject to the bulk transfer laws or any similar
statutory provisions in effect in any applicable jurisdiction.
Section 2.09. Covenants of the Sellers. Each Seller hereby covenants
that, except for the transfer hereunder, the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any lien on any related Mortgage Loan, or any interest
therein; the Seller will notify the Trustee, as assignee of the Depositor, and
the Master Servicer of the existence of any lien on any related Mortgage Loan
immediately upon discovery thereof, and the Seller will defend the right,
title and interest of the Trust, as assignee of the Depositor, in, to and
under the related Mortgage Loans, against all claims of third parties claiming
through or under the Seller; provided, however, that nothing in this Section
2.09 shall prevent or be deemed to prohibit a Seller from suffering to exist
upon any of the related Mortgage Loans any liens for municipal or other local
taxes and other governmental charges if such taxes or governmental charges
shall not at the time be due and payable or if the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves with respect thereto.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
The Master Servicer shall service and administer the Mortgage Loans
on behalf of the Trustee and in the best interests of and for the benefit of
the Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the Mortgage
Loans and, to the extent consistent with such terms, in the same manner in
which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer
or any Affiliate of the Master Servicer or any Sub-Servicer may have
with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Master Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to
receive compensation for its services hereunder or with respect to
any particular transaction.
To the extent consistent with the foregoing, the Master Servicer
shall seek to maximize the timely and complete recovery of principal and
interest on the Mortgage Notes. Subject only to the above-described servicing
standards and the terms of this Agreement and of the Mortgage Loans, the
Master Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and
all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing,
the Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee, when the Master Servicer believes it
appropriate in its best judgment in accordance with the servicing standards
set forth above, to execute and deliver, on behalf of the Certificateholders
and the Trustee, and upon notice to the Trustee, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Mortgage Loans and the
Mortgaged Properties and to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Trustee and Certificateholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.17, the Trustee shall
execute, at the written request of the Master Servicer, and furnish to the
Master Servicer and any Sub-Servicer any special or limited powers of attorney
and other documents necessary or appropriate to enable the Master Servicer or
any Sub-Servicer to carry out their servicing and administrative duties
hereunder; provided, however, such limited powers of attorney or other
documents shall be prepared by the Master Servicer and submitted to the
Trustee for execution. The Trustee shall not be liable for the actions of the
Master Servicer or any Sub-Servicers under such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards of
the preceding paragraph, the Master Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09, and further as provided in
Section 3.11. Any cost incurred by the Master Servicer or by Sub-Servicers in
effecting the timely payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating distributions to Certificateholders,
be added to the unpaid Principal Balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary, the
Master Servicer may not make any future advances with respect to a Mortgage
Loan and the Master Servicer shall not (i) permit any modification with
respect to any Mortgage Loan that would change the Mortgage Rate, reduce or
increase the Principal Balance (except for reductions resulting from actual
payments of principal) or change the final maturity date on such Mortgage Loan
(unless, as provided in Section 3.07, the Mortgagor is in default with respect
to the Mortgage Loan or such default is, in the judgment of the Master
Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or
amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or Treasury regulations promulgated thereunder) and (B) cause the REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions.
The Master Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this
Agreement.
Section 3.02. Sub-Servicing Agreements Between Master Servicer and
Sub-Servicers.
(a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans;
provided, however, that such agreements would not result in a withdrawal or a
downgrading by the Rating Agencies of the rating on any Class of Senior
Certificates. The Trustee is hereby authorized to acknowledge, at the request
of the Master Servicer, any Sub-Servicing Agreement that meets the
requirements applicable to Sub-Servicing Agreements set forth in this
Agreement and that is otherwise permitted under this Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer.
Each Sub-Servicing Agreement must impose on the Sub-Servicer requirements
conforming to the provisions set forth in Section 3.08 and provide for
servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Master Servicer will examine each Sub-Servicing Agreement and will be
familiar with the terms thereof. The terms of any Sub-Servicing Agreement will
not be inconsistent with any of the provisions of this Agreement. The Master
Servicer and the Sub-Servicers may enter into and make amendments to the
Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms
shall be consistent with and not violate the provisions of this Agreement, and
that no such amendment or different form shall be made or entered into which
could be reasonably expected to be materially adverse to the interests of the
Certificateholders without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights; provided, further, that the consent of
the Holders of Certificates entitled to at least 66% of the Voting Rights
shall not be required (i) to cure any ambiguity or defect in a Sub-Servicing
Agreement, (ii) to correct, modify or supplement any provisions of a
Sub-Servicing Agreement, or (iii) to make any other provisions with respect to
matters or questions arising under a Sub-Servicing Agreement, which, in each
case, shall not be inconsistent with the provisions of this Agreement. Any
variation without the consent of the Holders of Certificates entitled to at
least 66% of the Voting Rights from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Sub-Servicing Accounts, or
credits and charges to the Sub-Servicing Accounts or the timing and amount of
remittances by the Sub-Servicers to the Master Servicer, are conclusively
deemed to be inconsistent with this Agreement and therefore prohibited. The
Master Servicer shall deliver to the Trustee copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the
Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall
enforce the obligations of each Sub-Servicer under the related Sub-Servicing
Agreement and of the Sellers under the Mortgage Loan Purchase Agreement,
including, without limitation, any obligation to make advances in respect of
delinquent payments as required by a Sub-Servicing Agreement, or to purchase a
Mortgage Loan on account of missing or defective documentation or on account
of a breach of a representation, warranty or covenant, as described in Section
2.03(a). Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out
to such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement, to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans, or (ii) from
a specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed. Enforcement of the Mortgage Loan
Purchase Agreement against the Sellers shall be effected by the Trustee in
accordance with the foregoing provisions of this paragraph.
Section 3.03. Successor Sub-Servicers.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer
or the Master Servicer, and the Master Servicer either shall service directly
the related Mortgage Loans or shall enter into a Sub-Servicing Agreement with
a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Master Servicer or the Trustee
(if the Trustee is acting as successor master servicer) without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer (or the Trustee, if such party is then acting as successor master
servicer) shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Termination).
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer
and a Sub-Servicer or reference to actions taken through a Sub-Servicer or
otherwise, the Master Servicer shall remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the
Sub-Servicer and to the same extent and under the same terms and conditions as
if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with
a Sub-Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify
such indemnification.
Section 3.05. No Contractual Relationship Between Sub-Servicers and
the Trustee or Certificateholders.
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a
Sub-Servicer in its capacity as such shall be deemed to be between the
Sub-Servicer and the Master Servicer alone, and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the
Sub-Servicer except as set forth in Section 3.06. The Master Servicer shall be
solely liable for all fees owed by it to any Sub-Servicer, irrespective of
whether the Master Servicer's compensation pursuant to this Agreement is
sufficient to pay such fees.
Section 3.06. Assumption or Termination of Sub-Servicing Agreements
by Trustee.
In the event the Master Servicer shall for any reason no longer be
the Master Servicer (including by reason of the occurrence of a Master
Servicer Event of Termination), the Trustee shall thereupon assume all of the
rights and obligations of the Master Servicer under each Sub-Servicing
Agreement that the Master Servicer may have entered into, unless the Trustee
elects to terminate any Sub-Servicing Agreement in accordance with its terms
as provided in Section 3.03. Upon such assumption, the Trustee (or the
successor master servicer appointed pursuant to Section 7.02) shall be deemed,
subject to Section 3.03, to have assumed all of the departing Servicer's
interest therein and to have replaced the departing Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the
departing Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement that arose before it ceased to
be the Master Servicer and (ii) neither the Trustee nor any successor Master
Servicer shall be deemed to have assumed any liability or obligation of the
Master Servicer that arose before it ceased to be the Master Servicer.
The Master Servicer at its expense shall, upon request of Trustee,
deliver to the assuming party all documents and records relating to each
Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments.
The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided, however, that any extension pursuant to
clause (ii) above shall not affect the amortization schedule of any Mortgage
Loan for purposes of any computation hereunder, except as provided below. In
the event of any such arrangement pursuant to clause (ii) above, the Master
Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.04 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangement. Notwithstanding the foregoing, in the event that any Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable, the Master Servicer, consistent with the standards set
forth in Section 3.01, may also waive, modify or vary any term of such
Mortgage Loan (including modifications that would change the Mortgage Rate,
forgive the payment of principal or interest or extend the final maturity date
of such Mortgage Loan), accept payment from the related Mortgagor of an amount
less than the Stated Principal Balance in final satisfaction of such Mortgage
Loan, or consent to the postponement of strict compliance with any such term
or otherwise grant indulgence to any Mortgagor (any and all such waivers,
modifications, variances, forgiveness of principal or interest, postponements,
or indulgences collectively referred to herein as "forbearance"); provided,
however, that in no event shall the Master Servicer grant any such forbearance
(other than as permitted by the second sentence of this Section) with respect
to any one Mortgage Loan more than once in any 12-month period or more than
three times over the life of such Mortgage Loan. The Master Servicer's
analysis supporting any forbearance and the conclusion that any forbearance
meets the standards of Section 3.01 (including the standard that such
forbearance will maximize the timely and complete recovery of principal and
interest on the Mortgage Notes) shall be reflected in writing in the Mortgage
File.
Section 3.08. Sub-Servicing Accounts.
In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer's receipt thereof, all
proceeds of Mortgage Loans received by the Sub-Servicer less its servicing
compensation to the extent permitted by the Sub-Servicing Agreement, and shall
thereafter deposit such amounts in the Sub-Servicing Account, in no event more
than two Business Days after the receipt of such amounts. The Sub-Servicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not
later than two Business Days after the deposit of such amounts in the
Sub-Servicing Account. For purposes of this Agreement, the Master Servicer
shall be deemed to have received payments on the Mortgage Loans when the
Sub-Servicer receives such payments.
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all Escrow Payments shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, all Escrow Payments collected on account of the
Mortgage Loans and shall thereafter deposit such Escrow Payments in the
Servicing Accounts, in no event more than two Business Days after the receipt
of such Escrow Payments, all Escrow Payments collected on account of the
Mortgage Loans for the purpose of effecting the timely payment of any such
items as required under the terms of this Agreement. Withdrawals of amounts
from a Servicing Account may be made only to (i) effect payment of taxes,
assessments, hazard insurance premiums, and comparable items in a manner and
at a time that assures that the lien priority of the Mortgage is not
jeopardized (or, with respect to the payment of taxes, in a manner and at a
time that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure as a result of a tax lien); (ii) reimburse the Master Servicer (or
a Sub-Servicer to the extent provided in the related Sub-Servicing Agreement)
out of related collections for any Servicing Advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; or (v) clear and terminate
the Servicing Account at the termination of the Master Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article X. The Master Servicer will be responsible for the
administration of the Servicing Accounts and will be obligated to make
Servicing Advances to such accounts when and as necessary to avoid the lapse
of insurance coverage on the Mortgaged Property, or which the Master Servicer
knows, or in the exercise of the required standard of care of the Master
Servicer hereunder should know, is necessary to avoid the loss of the
Mortgaged Property due to a tax sale or the foreclosure as a result of a tax
lien. If any such payment has not been made and the Master Servicer receives
notice of a tax lien with respect to the Mortgage being imposed, the Master
Servicer will, within ten business days of such notice, advance or cause to be
advanced funds necessary to discharge such lien on the Mortgaged Property. As
part of its servicing duties, the Master Servicer or Sub-Servicers shall pay
to the Mortgagors interest on funds in the Servicing Accounts, to the extent
required by law and, to the extent that interest earned on funds in the
Servicing Accounts is insufficient, to pay such interest from its or their own
funds, without any reimbursement therefor.
Section 3.10. Collection Account and Distribution Account.
(a) On behalf of the Trust Fund, the Master Servicer shall establish
and maintain, or cause to be established and maintained, one or more accounts
(such account or accounts, the "Collection Account"), held in trust for the
benefit of the Trustee and the Certificateholders. On behalf of the Trust
Fund, the Master Servicer shall deposit or cause to be deposited in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the Master Servicer's
receipt thereof, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to the
Cut-off Date (other than in respect of principal or interest on the Mortgage
Loans due on or before the Cut-off Date) or payments (other than Principal
Prepayments) received by it on or prior to the Cut-off Date but allocable to a
Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds (other
than proceeds collected in respect of any particular REO Property and
amounts paid in connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 10.01);
(iv) any amounts required to be deposited pursuant to Section
3.12 in connection with any losses realized on Permitted Investments
with respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased
in accordance with Section 2.03 or Section 10.01; and
(vii) all amounts required to be deposited in connection with
Substitution Adjustments pursuant to Section 2.03.
The foregoing requirements for deposit in the Collection Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges,
ancillary income and assumption fees, or insufficient funds charges need not
be deposited by the Master Servicer in the Collection Account and may be
retained by the Master Servicer as additional compensation. In the event the
Master Servicer shall deposit in the Collection Account any amount not
required to be deposited therein, it may at any time withdraw such amount from
the Collection Account, any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish and
maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deliver to the Trustee in immediately available funds for deposit in the
Distribution Account on or before the Close of Business New York time on the
Master Servicer Remittance Date, that portion of the Available Funds
(calculated without regard to the references in the definition thereof to
amounts that may be withdrawn from the Distribution Account) for the related
Distribution Date then on deposit in the Collection Account.
(c) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Master Servicer shall give notice to the Trustee of the location of the
Collection Account maintained by it when established and prior to any change
thereof. The Trustee shall give notice to the Master Servicer and the
Depositor of the location of the Distribution Account when established and
prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered
by the Master Servicer to the Trustee for deposit in an account (which may be
the Distribution Account and must satisfy the standards for the Distribution
Account as set forth in the definition thereof) and for all purposes of this
Agreement shall be deemed to be a part of the Collection Account; provided,
however, that the Trustee shall have the sole authority to withdraw any funds
held in the Distribution Account pursuant to this subsection (d). In the event
the Master Servicer shall deliver to the Trustee for deposit in the
Distribution Account any amount not required to be deposited therein, it may
at any time request that the Trustee withdraw such amount from the
Distribution Account and remit to it any such amount, any provision herein to
the contrary notwithstanding. In addition, the Master Servicer, with respect
to items (i) through (iv) below, shall deliver to the Trustee from time to
time for deposit, and the Trustee, with respect to items (i) through (iv)
below, shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.04;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid in connection with a purchase of
Mortgage Loans and REO Properties pursuant to Section 10.01; and
(iv) any Compensating Interest to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest Shortfall.
(e) [Reserved].
(f) The Master Servicer shall deposit in the Collection Account any
amounts required to be deposited pursuant to Section 3.12(b) in connection
with losses realized on Permitted Investments with respect to funds held in
the Collection Account.
Section 3.11. Withdrawals from the Collection Account and
Distribution Account.
(a) The Master Servicer shall, from time to time, make withdrawals
from the Collection Account for any of the following purposes or as described
in Section 4.04:
(i) to remit to the Trustee for deposit in the Distribution
Account the amounts required to be so remitted pursuant to Section
3.10(b) or permitted to be so remitted pursuant to the first sentence
of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master
Servicer for Advances, but only to the extent of amounts received
which represent Late Collections (net of the related Servicing Fees)
of Monthly Payments, Liquidation Proceeds and Insurance Proceeds on
Mortgage Loans with respect to which such Advances were made in
accordance with the provisions of Section 4.04;
(iii) subject to Section 3.16(d), to pay the Master Servicer or
any Sub-Servicer (a) any unpaid Servicing Fees, (b) any unreimbursed
Servicing Advances with respect to each Mortgage Loan, but only to
the extent of any Late Collections, Liquidation Proceeds and
Insurance Proceeds received with respect to such Mortgage Loan, and
(c) any Servicing Advances with respect to the final liquidation of a
Mortgage Loan that are Nonrecoverable Advances, but only to the
extent that Late Collections, Liquidation Proceeds and Insurance
Proceeds received with respect to such Mortgage Loan are insufficient
to reimburse the Master Servicer or any Sub-Servicer for Servicing
Advances;
(iv) to pay to the Master Servicer as servicing compensation
(in addition to the Servicing Fee) on the Master Servicer Remittance
Date any interest or investment income earned on funds deposited in
the Collection Account;
(v) to pay to the Master Servicer or the applicable Seller,
with respect to each related Mortgage Loan that has previously been
purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance
previously made which the Master Servicer has determined to be a
Nonrecoverable Advance in accordance with the provisions of Section
4.04;
(vii) to pay, or to reimburse the Master Servicer for Servicing
Advances in respect of, expenses incurred in connection with any
Mortgage Loan pursuant to Section 3.16(b);
(viii) to pay to the Master Servicer on a Servicer Remittance
Date the excess of aggregate Prepayment Interest Excesses for the
related Distribution Date over aggregate Prepayment Interest
Shortfalls for such Distribution Date; and
(ix) to clear and terminate the Collection Account pursuant to
Section 10.01.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi) and
(vii) above. The Master Servicer shall provide written notification to
the Trustee, on or prior to the next succeeding Master Servicer
Remittance Date, upon making any withdrawals from the Collection Account
pursuant to subclause (vi) above; provided that an Officers' Certificate
in the form described under Section 4.04(d) shall suffice for such
written notification to the Trustee in respect hereof.
(b) The Trustee shall, from time to time, make withdrawals from the
Distribution Account, for any of the following purposes, without priority:
(i) to make distributions in accordance with Sections 4.01 and
8.05;
(ii) to pay any amounts in respect of taxes pursuant to Section
9.01(g); and
(iii) to clear and terminate the Distribution Account pursuant
to Section 10.01.
Section 3.12. Investment of Funds in the Collection Account.
(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (each such account, for purposes of this
Section 3.12, an "Investment Account"), to invest the funds in such Investment
Account in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, no later than the Business
Day immediately preceding the date on which such funds are required to be
withdrawn from such account pursuant to this Agreement. Funds in the
Distribution Account shall be held uninvested. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds
in an Investment Account shall be made in the name of the Trustee (in its
capacity as such), or in the name of a nominee of the Trustee. The Trustee
shall be entitled to sole possession or control (except with respect to
investment direction of funds held in the Collection Account and any income
and gain realized thereon) over each such investment, and any certificate,
securities entitlement or other instrument evidencing any such investment
shall be delivered directly to the Trustee or its agent, together with any
document of transfer necessary to transfer title to such investment to the
Trustee or its nominee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on
such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Trustee that
such Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account and any REO Account held by or on behalf
of the Master Servicer shall be for the benefit of the Master Servicer and
shall be subject to its withdrawal in accordance with Section 3.11 or Section
3.23, as applicable. The Master Servicer shall deposit in the Collection
Account or any REO Account, as applicable, the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon realization of such loss.
(c) All benefit derived from funds deposited in the Distribution
Account shall be for the benefit of the Trustee.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment,
or if a default occurs in any other performance required under any Permitted
Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall
take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
Section 3.13. [Reserved]
Section 3.14. Maintenance of Hazard Insurance, Primary Insurance
Polices and Errors and Omissions and Fidelity Coverage.
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the Mortgaged Property
in an amount which is at least equal to the lesser of the current Principal
Balance of such Mortgage Loan and the amount necessary to fully compensate for
any damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in
the related hazard insurance policy. The Master Servicer shall also cause to
be maintained fire insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements which are a part of such property and (ii) the
outstanding Principal Balance of the related Mortgage Loan at the time it
became an REO Property. The Master Servicer will comply in the performance of
this Agreement with all reasonable rules and requirements of each insurer
under any such hazard policies. Any amounts to be collected by the Master
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
amounts to be released to the Mortgagor in accordance with the procedures that
the Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant
to Section 3.11, if received in respect of a Mortgage Loan, or in the REO
Account, subject to withdrawal pursuant to Section 3.23, if received in
respect of an REO Property. Any cost incurred by the Master Servicer in
maintaining any such insurance shall not, for the purpose of calculating
distributions to Certificateholders, be added to the unpaid Principal Balance
of the related Mortgage Loan, notwithstanding that the terms of such Mortgage
Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Master Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid Principal Balance
of the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that the Master Servicer shall obtain and maintain a
blanket policy with an insurer having a General Policy Rating of AX or better
in Best's Key Rating Guide (or such other rating that is comparable to such
rating) insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection
Account from its own funds the amount not otherwise payable under the blanket
policy because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees
to prepare and present, on behalf of itself, the Trustee and the
Certificateholders, claims under any such blanket policy in a timely fashion
in accordance with the terms of such policy.
(b) The Master Servicer shall not take any action which would result
in non-coverage under any applicable Primary Insurance Policy of any loss
which, but for the actions of the Master Servicer, would have been covered
thereunder. The Master Servicer shall not cancel or refuse to renew any such
Primary Insurance Policy that 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 Insurance Policy for such canceled or non-renewed policy
is maintained with a Qualified Insurer.
The Master Servicer shall not be required to maintain any Primary
Insurance Policy (i) with respect to any Mortgage Loan with a Loan-to-Value
Ratio less than or equal to 80% as of any date of determination or, based on a
new appraisal, the Principal Balance of such Mortgage Loan represents 80% or
less of the new appraised value or (ii) if maintaining such Primary Insurance
Policy is prohibited by applicable law.
The Master Servicer agrees to effect the timely payment of the
premiums on each Primary Insurance Policy, and such costs not otherwise
recoverable shall be recoverable by the Master Servicer from the related
Liquidation Proceeds.
(c) In connection with its activities as Master Servicer of the
Mortgage Loans, the Master Servicer agrees to present on behalf of itself, the
Trustee and Certificateholders, claims to the insurer under any Primary
Insurance Policies and, in this regard, to take such reasonable action as
shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted Mortgage Loans. Any amounts collected by the Master
Servicer under any Primary Insurance Policies shall be deposited in the
Collection Account.
(d) The Master Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that
would meet the requirements of Fannie Mae or Freddie Mac if it were the
purchaser of the Mortgage Loans, unless the Master Servicer has obtained a
waiver of such requirements from Fannie Mae or Freddie Mac. The Master
Servicer shall also maintain a fidelity bond in the form and amount that would
meet the requirements of Fannie Mae or Freddie Mac, unless the Master Servicer
has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The
Master Servicer shall be deemed to have complied with this provision if an
Affiliate of the Master Servicer has such errors and omissions and fidelity
bond coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Master Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days' prior written notice to the Trustee. The Master Servicer
shall also cause each Sub-Servicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such requirements.
Section 3.15. Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether
or not the Mortgagor remains or is to remain liable under the Mortgage Note
and/or the Mortgage), exercise its rights to accelerate the maturity of such
Mortgage Loan under the "due-on-sale" clause, if any, applicable thereto;
provided, however, that the Master Servicer shall not be required to take such
action if in its sole business judgment the Master Servicer believes it is not
in the best interests of the Trust Fund and shall not exercise any such rights
if prohibited by law from doing so. If the Master Servicer reasonably believes
it is unable under applicable law to enforce such "due-on-sale" clause, or if
any of the other conditions set forth in the proviso to the preceding sentence
apply, the Master Servicer will enter into an assumption and modification
agreement from or with the person to whom such property has been conveyed or
is proposed to be conveyed, pursuant to which such person becomes liable under
the Mortgage Note and, to the extent permitted by applicable state law, the
Mortgagor remains liable thereon. The Master Servicer is also authorized to
enter into a substitution of liability agreement with such person, pursuant to
which the original Mortgagor is released from liability and such person is
substituted as the Mortgagor and becomes liable under the Mortgage Note,
provided that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Master Servicer and has a credit
risk rating at least equal to that of the original Mortgagor. In connection
with any assumption or substitution, the Master Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. The Master Servicer shall
not take or enter into any assumption and modification agreement, however,
unless (to the extent practicable in the circumstances) it shall have received
confirmation, in writing, of the continued effectiveness of any applicable
hazard insurance policy. Any fee collected by the Master Servicer in respect
of an assumption, modification or substitution of liability agreement shall be
retained by the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Master Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the Trustee the executed original of such
substitution, modification or assumption agreement, which document shall be
added to the related Mortgage File and shall, for all purposes, be considered
a part of such Mortgage File to the same extent as all other documents and
instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section
3.15, the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
Section 3.16. Realization upon Defaulted Mortgage Loans.
(a) The Master Servicer shall use its best efforts, consistent with
Servicing Standard, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans (including selling
any such Mortgage Loans other than converting the ownership of the related
properties) as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07. The Master Servicer shall be responsible for all
costs and expenses incurred by it in any such proceedings; provided, however,
that such costs and expenses will be recoverable as Servicing Advances by the
Master Servicer as contemplated in Section 3.11 and Section 3.23. The
foregoing is subject to the provision that, in any case in which Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master
Servicer shall not be required to expend its own funds toward the restoration
of such property unless it shall determine in its discretion that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or
any other provision of this Agreement, with respect to any Mortgage Loan as to
which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu
of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take
any other action with respect to, such Mortgaged Property, if, as a result of
any such action, the Trustee, the Trust Fund or the Certificateholders would
be considered to hold title to, to be a "mortgagee-in-possession" of, or to be
an "owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended from time to time, or any comparable law, unless the Master
Servicer has also previously determined, based on its reasonable judgment and
a report prepared by a Person who regularly conducts environmental audits
using customary industry standards, that:
(i) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it
would be in the best economic interest of the Trust
Fund to take such actions as are necessary to bring
the Mortgaged Property into compliance therewith;
and
(ii) there are no circumstances present at such
Mortgaged Property relating to the use, management
or disposal of any hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based
materials for which investigation, testing,
monitoring, containment, clean-up or remediation
could be required under any federal, state or local
law or regulation, or that if any such materials
are present for which such action could be
required, that it would be in the best economic
interest of the Trust Fund to take such actions
with respect to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.16 shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(vii), such right of reimbursement being prior to
the rights of Certificateholders to receive any amount in the Collection
Account received in respect of the affected Mortgage Loan or other Mortgage
Loans.
If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials,
hazardous wastes or petroleum-based materials affecting any such Mortgaged
Property, then the Master Servicer shall take such action as it deems to be in
the best economic interest of the Trust Fund; provided that any amounts
disbursed by the Master Servicer pursuant to this Section 3.16(b) shall
constitute Servicing Advances, subject to Section 4.04(d). The cost of any
such compliance, containment, cleanup or remediation shall be advanced by the
Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Collection Account as provided in Section 3.11(a)(iii) and
(a)(vii), such right of reimbursement being prior to the rights of
Certificateholders to receive any amount in the Collection Account received in
respect of the affected Mortgage Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from each Loan
Group, any Mortgage Loan or related REO Property that is 90 days or more
delinquent, which the Master Servicer determines in good faith will otherwise
become subject to foreclosure proceedings (evidence of such determination to
be delivered in writing to the Trustee prior to purchase), at a price equal to
the Purchase Price; provided, however, that (i) the Master Servicer shall
purchase any such Mortgage Loans or related REO Properties on the basis of
delinquency, purchasing the most delinquent Mortgage Loans or related REO
Properties first. The Purchase Price for any Mortgage Loan or related REO
Property purchased hereunder shall be deposited in the Distribution Account,
and the Trustee, upon receipt of such deposit, shall release or cause to be
released to the Master Servicer the related Mortgage File and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as the Master Servicer shall furnish and as shall be necessary to
vest in it title to any Mortgage Loan or related REO Property released
pursuant hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: first, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the
amount of such recovery will be allocated by the Master Servicer as follows:
first, to unpaid Servicing Fees; and second, to the balance of the interest
then due and owing. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(a)(iii).
Section 3.17. Trustee to Cooperate; Release of Mortgage Files.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full shall be escrowed
in a manner customary for such purposes, the Master Servicer shall deliver to
the Trustee two executed copies of a completed 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 Collection Account pursuant to Section 3.10 have been
or will be so deposited) of a Servicing Officer and shall request delivery to
it of the Mortgage File. Upon receipt of such certification and request, the
Trustee, or the Custodian as agent of the Trustee, shall, within five Business
Days, release and send by overnight mail, at the expense of the Master
Servicer, the related Mortgage File to the Master Servicer. If the Trustee is
the Custodian, the Trustee agrees to indemnify the Master Servicer, out of its
own funds, for any loss, liability or expense (other than special, indirect,
punitive or consequential damages which will not be paid by the Trustee)
incurred by the Master Servicer as a proximate result of the Trustee's breach
of its obligations pursuant to this Section 3.17. No expenses incurred in
connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection
under any insurance policy relating to the Mortgage Loans, the Trustee, or the
Custodian as agent of the Trustee, shall, upon any request made by or on
behalf of the Master Servicer and delivery to the Trustee or the Custodian of
a Request for Release in the form of Exhibit E, release the related Mortgage
File to the Master Servicer, and the Trustee, or the Custodian as agent of the
Trustee, shall, at the direction of the Master Servicer, execute such
documents as shall be necessary to the prosecution of any such proceedings.
Such Request for Release shall obligate the Master Servicer to return each and
every document previously requested from the Mortgage File to the Trustee, or
the Custodian as agent of the Trustee, when the need therefor by the Master
Servicer no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Collection Account or the Mortgage File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered, or caused to be
delivered, to the Trustee, or the Custodian as agent of the Trustee, an
additional Request for Release certifying as to such liquidation or action or
proceedings. Upon the request of the Trustee, or the Custodian as agent of the
Trustee, the Master Servicer shall provide notice to the Trustee, or the
Custodian as agent of the Trustee, of the name and address of the Person to
which such Mortgage File or such document was delivered and the purpose or
purposes of such delivery. Upon receipt of a certificate of a Servicing
Officer stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited,
or that such Mortgage Loan has become an REO Property, any outstanding
Requests for Release with respect to such Mortgage Loan shall be released by
the Trustee or the Custodian to the Master Servicer or its designee.
(c) Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Master Servicer or the Sub-Servicer, as the
case may be, copies of, any court pleadings, requests for trustee's sale or
other documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. Each such
certification shall include a request that such pleadings or documents be
executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure
or trustee's sale.
Section 3.18. Servicing Compensation.
As compensation for the activities of the Master Servicer hereunder,
the Master Servicer shall be entitled to the Servicing Fee with respect to
each Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan.
Additional servicing compensation in the form of assumption fees,
ancillary income and late payment charges, insufficient funds charges or
otherwise shall be retained by the Master Servicer only to the extent such
fees or charges are received by the Master Servicer. The Master Servicer shall
also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the
Collection Account and pursuant to Section 3.23(b) to withdraw from any REO
Account, as additional servicing compensation, interest or other income earned
on deposits therein, subject to Section 3.12 and Section 3.24. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder (including premiums for the insurance
required by Section 3.14, to the extent such premiums are not paid by the
related Mortgagors) and shall not be entitled to reimbursement therefor except
as specifically provided herein.
Section 3.19. Reports to the Trustee; Collection Account Statements.
Not later than 20 days after each Distribution Date, the Master
Servicer shall forward, upon request, to the Trustee and the Depositor the
most current available bank statement for the Collection Account. Copies of
such statement shall be provided by the Trustee to any Certificateholder and
to any Person identified to the Trustee as a prospective transferee of a
Certificate, upon request at the expense of the requesting party, provided
such statement is delivered by the Master Servicer to the Trustee.
Section 3.20. Statement as to Compliance.
The Master Servicer shall deliver to the Trustee and the Depositor
not later than 90 days following the end of the fiscal year of the Master
Servicer, commencing with the fiscal year that begins in 2000, an Officers'
Certificate stating, as to each signatory thereof, that (i) a review of the
activities of the Master Servicer during the preceding year and of performance
under this Agreement has been made under such officers' supervision and (ii)
to the best of such officers' knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee
as a prospective transferee of a Certificate, upon request at the expense of
the requesting party, provided such statement is delivered by the Master
Servicer to the Trustee.
Section 3.21. Independent Public Accountants' Servicing Report.
Not later than 90 days following the end of each fiscal year of the
Master Servicer, commencing with the fiscal year that begins in 2000, the
Master Servicer at its own expense shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
residential mortgage loans by Sub-Servicers, upon comparable reports of firms
of independent certified public accountants rendered on the basis of
examinations conducted in accordance with the same standards (rendered within
one year of such report) with respect to those Sub-Servicers. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon
request at the expense of the Master Servicer provided that such statement is
delivered by the Master Servicer to the Trustee.
Section 3.22. Access to Certain Documentation; Filing of Reports by
Trustee.
(a) The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by
applicable laws and regulations. Such access shall be afforded without charge,
but only upon reasonable request and during normal business hours at the
offices of the Master Servicer designated by it. In addition, access to the
documentation regarding the Mortgage Loans will be provided to any
Certificateholder, the Trustee and to any Person identified to the Master
Servicer as a prospective transferee of a Certificate, upon reasonable request
during normal business hours at the offices of the Master Servicer designated
by it at the expense of the Person requesting such access.
(b) The Trustee shall, on behalf of the Trust Fund, prepare, sign and
file with the Securities and Exchange Commission any and all reports,
statements and information respecting the Trust which the Depositor determines
are required to be filed with the Securities and Exchange Commission pursuant
to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended,
each such report, statement and information to be filed on or prior to the
required filing date for such report, statement or information. Upon the
request of the Trustee, each Seller, the Master Servicer and the Depositor
shall cooperate with the Trustee in the preparation of any such report and
shall provide to the Trustee in a timely manner all such information or
documentation as the Trustee may reasonably request in connection with the
performance of its duties and obligations under this Section.
Section 3.23. Title, Management and Disposition of REO Property.
(a) The deed or certificate of sale of any REO Property shall be
taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the related REMIC,
shall either sell any REO Property by the end of the third full taxable year
after the taxable year in which such REMIC acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 61 days before the day on which the
three-year grace period would otherwise expire, an extension of such
three-year period, unless the Master Servicer shall have delivered to the
Trustee an Opinion of Counsel, addressed to the Trustee and the Depositor, to
the effect that the holding by such REMIC of such REO Property subsequent to
three years after its acquisition will not result in the imposition on such
REMIC of taxes on "prohibited transactions" thereof, as defined in Section
860F of the Code, or cause such REMIC to fail to qualify as a REMIC under
Federal law at any time that any Certificates are outstanding. The Master
Servicer shall manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by such REMIC of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code, or any "net income
from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall separately account for all funds
collected and received in connection with the operation of any REO Property
and shall establish and maintain, or cause to be established and maintained,
with respect to REO Properties an account held in trust for the Trustee for
the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the
Collection Account to serve as the REO Account, subject to separate ledgers
for each REO Property. The Master Servicer shall be entitled to retain or
withdraw any interest income paid on funds deposited in the REO Account.
(c) The Master Servicer shall have full power and authority, subject
only to the specific requirements and prohibitions of this Agreement, to do
any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and
for such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall
deposit, or cause to be deposited in the clearing account in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Master Servicer's receipt thereof, and
shall thereafter deposit in the REO Account, in no event more than two
Business Days after the Master Servicer's receipt thereof, all revenues
received by it with respect to an REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of such
REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such
REO Property;
(ii) all real estate taxes and assessments in respect of such
REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to an
REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Master Servicer
shall advance from its own funds such amount as is necessary for such purposes
if, but only if, the Master Servicer would make such advances if the Master
Servicer owned the REO Property and if in the Master Servicer's judgment, the
payment of such amounts will be recoverable from the rental or sale of the REO
Property.
Notwithstanding the foregoing, neither the Master Servicer nor the
Trustee shall:
(i) authorize the Trust Fund to enter into, renew or extend any
New Lease with respect to any REO Property, if the New Lease by its
terms will give rise to any income that does not constitute Rents
from Real Property;
(ii) authorize any amount to be received or accrued under any
New Lease other than amounts that will constitute Rents from Real
Property;
(iii) authorize any construction on any REO Property, other
than the completion of a building or other improvement thereon, and
then only if more than ten percent of the construction of such
building or other improvement was completed before default on the
related Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(iv) authorize any Person to Directly Operate any REO Property
on any date more than 90 days after its date of acquisition by the
Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not
cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code at any time that it is held by
the related REMIC, in which case the Master Servicer may take such actions as
are specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
(ii) any such contract shall require, or shall be administered
to require, that the Independent Contractor pay all costs and
expenses incurred in connection with the operation and management of
such REO Property, including those listed above and remit all related
revenues (net of such costs and expenses) to the Master Servicer as
soon as practicable, but in no event later than thirty days following
the receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c) relating
to any such contract or to actions taken through any such Independent
Contractor shall be deemed to relieve the Master Servicer of any of
its duties and obligations to the Trustee on behalf of the
Certificateholders with respect to the operation and management of
any such REO Property; and
(iv) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties
and obligations in connection with the operation and management of
such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of
whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent Contractor would constitute Servicing
Advances if made by the Master Servicer, such amounts shall be reimbursable as
Servicing Advances made by the Master Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c),
the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse
itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances
made in respect of such REO Property or the related Mortgage Loan. On the
Master Servicer Remittance Date, the Master Servicer shall withdraw from each
REO Account maintained by it and deposit into the Distribution Account in
accordance with Section 3.10(d)(ii), for distribution on the related
Distribution Date in accordance with Section 4.01, the income from the related
REO Property received during the prior calendar month, net of any withdrawals
made pursuant to Section 3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a),
each REO Disposition shall be carried out by the Master Servicer at such price
and upon such terms and conditions as the Master Servicer shall deem necessary
or advisable, as shall be normal and usual in its Servicing Standard.
(f) The proceeds from the REO Disposition, net of any amount required
by law to be remitted to the Mortgagor under the related Mortgage Loan and net
of any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Distribution Account in accordance
with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month
following the receipt thereof for distribution on the related Distribution
Date in accordance with Section 4.01. Any REO Disposition shall be for cash
only (unless changes in the REMIC Provisions made subsequent to the Startup
Day allow a sale for other consideration).
(g) The Master Servicer shall file information returns with respect
to the receipt of mortgage interest received in a trade or business, reports
of foreclosures and abandonments of any Mortgaged Property and cancellation of
indebtedness income with respect to any Mortgaged Property as required by
Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall
be in form and substance sufficient to meet the reporting requirements imposed
by such Sections 6050H, 6050J and 6050P of the Code.
Section 3.24. Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
Not later than the Close of Business on each Master Servicer
Remittance Date, the Master Servicer shall remit to the Collection Account an
amount ("Compensating Interest") equal to the lesser of (A) the aggregate of
the Prepayment Interest Shortfalls for the related Distribution Date and (B)
one-half of the Servicing Fee received in the related Due Period. The Master
Servicer shall not have the right to reimbursement for any amounts remitted to
the Trustee in respect of Compensating Interest. Such amounts so remitted
shall be included in the Available Funds relating to the Loan Group
experiencing the Principal Prepayments and distributed therewith on the next
Distribution Date. If on any Master Servicer Remittance Date the amount
deposited into the Collection Account is the amount calculated in (B), such
amount shall be allocated between the Available Funds of each Loan Group pro
rata based on the aggregate Prepayment Interest Shortfall experienced by both
Loan Groups during the related Due Period. The Master Servicer shall not be
obligated to pay Compensating Interest with respect to Relief Act Interest
Shortfalls.
Section 3.25. [Reserved]
Section 3.26. Obligations of the Master Servicer in Respect of
Adjustments.
In the event that a shortfall in any collection on or liability with
respect to the Mortgage Loans in the aggregate results from or is attributable
to adjustments to Stated Principal Balances that were made by the Master
Servicer in a manner not consistent with the terms of the related Mortgage
Note and this Agreement, the Master Servicer, upon discovery or receipt of
notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor
and any successor servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of the Master Servicer or this
Agreement. Notwithstanding the foregoing, this Section 3.26 shall not limit
the ability of the Master Servicer to seek recovery of any such amounts from
the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law.
Section 3.27. Solicitations.
From and after the Closing Date, the Master Servicer agrees that it
will not take any action or permit or cause any action to be taken by any of
its agents and Affiliates, or by any independent contractors or independent
mortgage brokerage companies on the Master Servicer's behalf, to personally,
by telephone or mail, solicit the Mortgagor under any Mortgage Loan for the
purpose of refinancing such Mortgage Loan; provided, that the Master Servicer
may solicit any Mortgagor for whom the Master Servicer has received a request
for verification of mortgage, a request for demand for payoff, a mortgagor
initiated written or verbal communication indicating a desire to prepay the
related Mortgage Loan, or the mortgagor initiates a title search; provided
further, it is understood and agreed that promotions undertaken by the Master
Servicer or any of its Affiliates which (i) concern optional insurance
products or other additional products or (ii) are generally directed to the
customers of the Master Servicer or its Affiliates, including, without
limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute
solicitation under this Section, nor is the Master Servicer prohibited from
responding to unsolicited requests or inquiries made by a Mortgagor or an
agent of a Mortgagor.
ARTICLE IV
FLOW OF FUNDS
Section 4.01. Distributions.
(a) On each Distribution Date the Trustee shall withdraw funds on
deposit in the Distribution Account and make the following disbursements and
transfers as described below and to the extent of such funds.
(A) The Group I Available Funds shall be distributed on each
Distribution Date in the following order of priority:
(i) to the Holders of the Class A-1 Certificates, the related
Interest Distributable Amount for that date;
(ii) to the Holders of the Class B-1 Certificates, the related
Interest Distributable Amount for that date;
(iii) from the Group I Principal Distribution Amount for such
Distribution Date to Holders of the Class A-1 Certificates, an amount equal to
the Senior Principal Distribution Amount for that date until the Class
Certificate Principal Balance of such Class is reduced to zero; and
(iv) from the Group I Principal Distribution Amount for such
Distribution Date to the Holders of the Class B-1 Certificates, an amount
equal to the Subordinated Principal Distribution Amount for that date until
the Class Certificate Principal Balance of such Class is reduced to zero.
(B) The Group II Available Funds shall be distributed on each
Distribution Date in the following order of priority:
(i) to the Holders of the Class A-2 Certificates, the related
Interest Distributable Amount for that date;
(ii) to the Holders of the Class B-2 Certificates, the related
Interest Distributable Amount for that date;
(iii) from the Group II Principal Distribution Amount for such
Distribution Date to the Holders of the Class A-2 Certificates, an amount
equal to the Senior Principal Distribution Amount for that date until the
Class Certificate Principal Balance of such Class is reduced to zero; and
(iv) from the Group II Principal Distribution Amount for such
Distribution Date to the Holders of the Class B-2 Certificates, an amount
equal to the Subordinated Principal Distribution Amount for that date until
the Class Certificate Principal Balance of such Class is reduced to zero.
(C) On each Distribution Date, any remaining amounts after giving
effect to the distributions specified in clauses (A) and (B) above will be
distributed to the Holders of the Class R Certificates.
(b) Method of Distribution. The Trustee shall make distributions in
respect of a Distribution Date to each Certificateholder of record on the
related Record Date (other than as provided in Section 10.01 respecting the
final distribution), in the case of Certificateholders of the Regular
Certificates, by check or money order mailed to such Certificateholder at the
address appearing in the Certificate Register, or by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
(c) Distributions on Book-Entry Certificates. Each distribution with
respect to a Book-Entry Certificate shall be paid to the Depository, which
shall credit the amount of such distribution to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such distribution to the
Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing
funds to the Certificate Owners that it represents. All such credits and
disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions
of the Certificates. None of the Trustee, the Depositor, the Master Servicer
or any Seller shall have any responsibility therefor.
Section 4.02. Allocation of Realized Losses and Excess Losses.
(a) For each Loan Group, on or prior to each Determination Date, the
Trustee shall determine the total amount of Realized Losses, including Excess
Losses, with respect to the related Distribution Date.
(b) Realized Losses with respect to each Loan Group and any
Distribution Date shall be allocated as follows:
(i) any Realized Loss, excluding any Excess Loss, shall be
allocated to the related Class of Subordinate Certificates; and
(ii) any Excess Loss shall be allocated, pro rata, to the
related Classes of Senior and Subordinate Certificates based upon
their respective Class Certificate Principal Balances.
Section 4.03. Statements.
(a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and forward
by mail to each Holder of the Regular Certificates, the Master Servicer and
the Rating Agencies, a statement as to the distributions made on such
Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of Class A-1 Certificates and Class A-2
Certificates allocable to principal;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of Class A-1 Certificates and Class A-2
Certificates allocable to interest;
(iii) the Senior Percentage and Subordinated Percentage with
respect to each Certificate Group for the following Distribution
Date;
(iv) the aggregate amount of servicing compensation received by
the Master Servicer during the related Due Period and such other
customary information as the Trustee deems necessary or desirable, or
which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(v) the aggregate amount of Advances with respect to each Loan
Group for the related Due Period and the amount of unreimbursed
Advances;
(vi) the Senior Prepayment Percentage and the Subordinated
Prepayment Percentage with respect to each Certificate Group for the
following Distribution Date;
(vii) the Special Hazard Loss Coverage Amount, the Fraud Loss
Coverage Amount and the Bankruptcy Loss Coverage Amount, in each case
with respect to each Loan Group as of the related Determination Date;
(viii) the Loan Group Balance for each Loan Group at the Close
of Business at the end of the related Due Period;
(ix) the number, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans in each Loan
Group as of the related Due Date;
(x) separately stated for each Loan Group, the number and
aggregate unpaid principal balance of Mortgage Loans (a) 30 to 59
days delinquent, (b) 60 to 89 days delinquent, (c) 90 or more days
delinquent, (d) as to which foreclosure proceedings have been
commenced and (e) in bankruptcy as of the Close of Business on the
last day of the calendar month preceding such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the Principal Balance of such Mortgage Loan as of the
date it became an REO Property;
(xii) the book value of any REO Property as of the Close of
Business on the last Business Day of the calendar month preceding the
Distribution Date, and, cumulatively, the total number and cumulative
principal balance of all REO Properties in each Loan Group as of the
Close of Business of the last day of the preceding Due Period;
(xiii) the aggregate amount of Principal Prepayments with
respect to each Loan Group made during the related Prepayment Period;
(xiv) the aggregate amount of Realized Losses incurred during
the related Due Period and the cumulative amount of Realized Losses,
in each case by Loan Group;
(xv) the aggregate amount of extraordinary Trust Fund expenses
by Loan Group withdrawn from the Collection Account for such
Distribution Date;
(xvi) the Certificate Principal Balance of each Class of the
certificates after giving effect to the distributions made on such
Distribution Date;
(xvii) the Interest Distributable Amount in respect of each
Class of the Certificates, for such Distribution Date and the
respective portions thereof, if any, remaining unpaid following the
distributions made in respect of such Certificates on such
Distribution Date;
(xviii) the aggregate amount of any Prepayment Interest
Shortfalls and the Unpaid Interest Shortfall Amount for such
Distribution Date, to the extent not covered by payments by the
Master Servicer pursuant to Section 3.26 in each case by Loan Group;
(xix) if applicable, whether the Senior Step Down Conditions
have been met with respect to each Certificate Group;
(xx) the Available Funds with respect to each Loan Group;
(xxi) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(xxii) the Liquidation Report for such Distribution Date by
Loan Group; and
(xxiii) the aggregate Principal Balance of Mortgage Loans
purchased by the Master Servicer or Sellers during the related Due
Period with respect to each Loan Group, and indicating the Section of
this Agreement requiring or allowing the purchase of each such
Mortgage Loan;
The Trustee shall forward such report concurrently with each
distribution to the Certificateholders and the Rating Agencies on the related
Distribution Date. The Trustee may also make such reports available each month
to each party referred to in this paragraph via the Trustee's website. The
Trustee's obligations pursuant to this Section 4.03 are limited to the extent
of its receipt of all necessary information from the Master Servicer. The
Trustee may fully rely upon and shall have no liability with respect to
information provided by the Master Servicer.
In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.
(b) Within a reasonable period of time after the end of each calendar
year, the Trustee shall, upon written request, furnish to each Person who at
any time during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information as is
reasonably necessary to provide to such Person a statement containing the
information set forth in subclauses (i) through (iii) above, aggregated for
such calendar year or applicable portion thereof during which such Person was
a Certificateholder. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be prepared and furnished by the Trustee to Certificateholders pursuant to any
requirements of the Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall forward to the Class
R Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other
information as the Trustee deems necessary or appropriate.
(d) Within a reasonable period of time after the end of each calendar
year, the Trustee shall deliver to each Person who at any time during the
calendar year was a Class R Certificateholder, if requested in writing by such
Person, such information as is reasonably necessary to provide to such Person
a statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof
during which such Person was a Class R Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to
Certificateholders by the Trustee pursuant to any requirements of the Code as
from time to time in force.
Section 4.04. Remittance Reports; Advances.
(a) No later than the second Business Day following each
Determination Date, the Master Servicer shall deliver to the Trustee by
telecopy or electronic mail (or by such other means as the Master Servicer and
the Trustee may agree from time to time) a Remittance Report with respect to
the related Distribution Date. Not later than the Close of Business New York
time three Business Days prior to the related Distribution Date, the Master
Servicer shall deliver or cause to be delivered to the Trustee in addition to
the information provided on the Remittance Report, such other information
reasonably available to it with respect to the Mortgage Loans as the Trustee
may reasonably require to perform the calculations necessary to make the
distributions contemplated by Section 4.01 and to prepare the statements to
Certificateholders contemplated by Section 4.03. The Trustee shall not be
responsible to recompute, recalculate or verify any information provided to it
by the Master Servicer.
(b) The amount of Advances to be made by the Master Servicer for any
Distribution Date shall equal, subject to Section 4.04(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Due Period in respect of the Mortgage Loans, which Monthly
Payments were delinquent on a contractual basis as of the Close of Business on
the related Determination Date and (ii) with respect to each REO Property,
which REO Property was acquired during or prior to the related Due Period and
as to which REO Property an REO Disposition did not occur during the related
Due Period, an amount equal to the excess, if any, of the REO Imputed Interest
on such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Distribution Account pursuant
to Section 3.23 for distribution on such Distribution Date.
On or before the Close of Business New York time on the Master
Servicer Remittance Date, the Master Servicer shall remit in immediately
available funds to the Trustee for deposit in the Distribution Account an
amount equal to the aggregate amount of Advances, if any, to be made in
respect of the Mortgage Loans and REO Properties for the related Distribution
Date either (i) from its own funds or (ii) from the Collection Account, to the
extent of funds held therein for future distribution (in which case it will
cause to be made an appropriate entry in the records of Collection Account
that amounts held for future distribution have been, as permitted by this
Section 4.04, used by the Master Servicer in discharge of any such Advance) or
(iii) in the form of any combination of (i) and (ii) aggregating the total
amount of Advances to be made by the Master Servicer with respect to the
Mortgage Loans and REO Properties. Any amounts held for future distribution
and so used shall be appropriately reflected in the Master Servicer's records
and replaced by the Master Servicer by deposit in the Collection Account on or
before any future Master Servicer Remittance Date to the extent that the
Available Funds for the related Distribution Date (determined without regard
to Advances to be made on the Master Servicer Remittance Date) shall be less
than the total amount that would be distributed to the Classes of
Certificateholders pursuant to Section 4.01 on such Distribution Date if such
amounts held for future distributions had not been so used to make Advances.
The Trustee will promptly provide notice to the Master Servicer by telecopy in
the event that the amount remitted by the Master Servicer to the Trustee on
such date is less than the Advances required to be made by the Master Servicer
for the related Distribution Date, as set forth in the related Remittance
Report.
(c) The obligation of the Master Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject
to (d) below, and, with respect to any Mortgage Loan, shall continue until the
Mortgage Loan is paid in full or until the recovery of all Liquidation
Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master
Servicer if such Advance or Servicing Advance would, if made, constitute a
Nonrecoverable Advance. The determination by the Master Servicer that it has
made a Nonrecoverable Advance or that any proposed Advance or Servicing
Advance, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate of the Master Servicer delivered to the
Depositor and the Trustee.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
Each of the Class A-1 and Class A-2 Certificates shall be
substantially in the form annexed hereto as Exhibit A, each of the Class B-1
and B-2 Certificates shall be substantially in the form annexed hereto as
Exhibit B, and the Class R Certificates shall be substantially in the form
annexed hereto as Exhibit C. Each of the Certificates shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
order of the Depositor concurrently with the sale and assignment to the
Trustee of the Trust Fund. Each Class of the Senior and Subordinate
Certificates shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of
$25,000 and integral dollar multiples of $1 in excess thereof, except that one
Certificate of each such Class of Certificates may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Class Certificate Principal Balance
of such Class on the Closing Date. The Class R Certificates are issuable only
in minimum Percentage Interests of 100%.
The Certificates shall be executed on behalf of the Trust by manual
or facsimile signature on behalf of 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, 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 such
Certificate shall have been manually authenticated by the Trustee
substantially in the form provided for herein, and such 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. Subject to
Section 5.02(c), the Class A Certificates shall be Book-Entry Certificates.
The Class R Certificates shall not be Book-Entry Certificates.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Certificate Registrar shall cause to be kept at the Corporate
Trust Office a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for
the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Trustee shall initially serve as
Certificate Registrar for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
aggregate Percentage Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Trustee shall execute on behalf of the Trust and
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 (if so required by
the Trustee or the Certificate Registrar) be duly endorsed by, or be
accompanied by a written instrument of transfer satisfactory to the Trustee
and the Certificate Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to another
Depository; (ii) the Depository shall maintain book-entry records with respect
to the Certificate Owners and with respect to ownership and transfers of such
Certificates; (iii) ownership and transfers of registration of such
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall for all purposes deal with the Depository as representative
of the Certificate Owners of the Certificates for purposes of exercising the
rights of Holders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they
are made with respect to different Certificate Owners; (vi) the Trustee may
rely and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants and furnished by the
Depository Participants with respect to indirect participating firms and
Persons shown on the books of such indirect participating firms as direct or
indirect Certificate Owners; and (vii) the direct participants of the
Depository shall have no rights under this Agreement under or with respect to
any of the Certificates held on their behalf by the Depository, and the
Depository may be treated by the Trustee and its agents, employees, officers
and directors as the absolute owner of the Certificates for all purposes
whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts
as agent in accordance with the Depository's normal procedures. The parties
hereto are hereby authorized to execute a Letter of Representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such Letter of Representation and this
Agreement, the terms of this Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and (y) the Trustee or the Depositor is
unable to locate a qualified successor, (ii) the Depositor, at its sole
option, with the consent of the Trustee, elects to terminate the book-entry
system through the Depository or (iii) after the occurrence of a Master
Servicer Event of Termination, the Certificate Owners of each Senior
Certificate representing Percentage Interests of such Classes aggregating not
less than 51% advises the Trustee and Depository through the Financial
Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of
definitive, fully registered certificates (the "Definitive Certificates") to
Certificate Owners is no longer in the best interests of the Certificate
Owners. Upon surrender to the Certificate Registrar of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall, at the Depositor's
expense, in the case of (ii) above, or the Sellers' expense, in the case of
(i) and (iii) above, execute on behalf of the Trust and authenticate 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, the Trustee, the Certificate Registrar, the Master
Servicer, any Paying Agent and the Depositor shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder.
(d) Except with respect to the initial transfer of the Class B-1,
Class B-2 and Class R Certificates by the Depositor, no transfer, sale, pledge
or other disposition of any Class B-1, Class B-2 or Class R Certificate shall
be made unless such disposition is exempt from the registration requirements
of the Securities Act of 1933, as amended (the "1933 Act"), and any applicable
state securities laws or is made in accordance with the 1933 Act and laws. In
the event of any such transfer, (i) unless such transfer is made in reliance
upon Rule 144A (as evidenced by the investment letter delivered to the
Trustee, in substantially the form attached hereto as Exhibit I under the 1933
Act, the Trustee and the Depositor shall require a written Opinion of Counsel
(which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Trustee and the Depositor that such transfer
may be made pursuant to an exemption, describing the applicable exemption and
the basis therefor, from the 1933 Act or is being made pursuant to the 1933
Act, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor or (ii) the Trustee shall require the transferor to execute a
transferor certificate (in substantially the form attached hereto as Exhibit
K) and the transferee to execute an investment letter (in substantially the
form attached hereto as Exhibit I) acceptable to and in form and substance
reasonably satisfactory to the Depositor and the Trustee certifying to the
Depositor and the Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee or the Depositor. The
Holder of the Class R Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Class B-1, Class B-2 or Class R Certificate shall be
made unless the Trustee shall have received either (i) a representation from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee and the Depositor, (such requirement is satisfied
only by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit J hereto, as appropriate), to the effect
that such transferee is not an employee benefit plan or arrangement subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets
of any such plan or arrangement to effect such transfer or (ii) in the case of
a Class B-1 or Class B-2 Certificate, if the purchaser is an insurance
company, a representation that the purchaser is an insurance company which is
purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of 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 (iii) in the case
of a Class B-1, Class B-2 or Class R Certificate presented for registration in
the name of an employee benefit plan subject to ERISA or a plan or arrangement
subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee which
Opinion of Counsel shall not be an expense of either the Trustee or the Trust,
addressed to the Trustee, to the effect that the purchase and holding of the
Class B-1, Class B-2 or Class R Certificate will not result in the assets of
the Trust being deemed to be "plan assets" and subject to the prohibited
transaction provisions of ERISA and the Code and will not subject the Trustee
to any obligation in addition to those expressly undertaken in this Agreement
or to any liability. For purposes of clause (i) of the preceding sentence,
such representation shall be deemed to have been made to the Trustee by the
transferee's acceptance of the Class B-1, Class B-2 or Class R Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in the Class
B-1, Class B-2 or Class R Certificate) unless the Trustee shall have received
from the transferee an alternative representation acceptable in form and
substance to the Depositor. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class B-1, Class B-2 or Class R
Certificate to or on behalf of an employee benefit plan subject to ERISA or to
the Code without the delivery to the Trustee of an Opinion of Counsel
satisfactory to the Trustee as described above shall be void and of no effect.
Each Person who has or who acquires any Ownership Interest in a Class
R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and
to have irrevocably appointed the Depositor or its designee as its
attorney-in-fact to negotiate the terms of any mandatory sale under clause (v)
below and to execute all instruments of transfer and to do all other things
necessary in connection with any such sale, and the rights of each Person
acquiring any Ownership Interest in a Class R Certificate are expressly
subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Class R
Certificate unless such Ownership Interest is a pro rata undivided
interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall as a condition
to registration of the transfer, require delivery to it, in form and
substance satisfactory to it, of each of the following:
A. an affidavit in the form of Exhibit L hereto
from the proposed transferee to the effect that such
transferee is a Permitted Transferee and that it is not
acquiring its Ownership Interest in the Class R Certificate
that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted
Transferee; and
B. a covenant of the proposed transferee to
the effect that the proposed transferee agrees to be
bound by and to abide by the transfer restrictions
applicable to the Class R Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no
rights in the purported transferee. If any purported transferee
shall, in violation of the provisions of this Section, become a
Holder of a Class R Certificate, then the prior Holder of such Class
R Certificate that is a Permitted Transferee shall, upon discovery
that the registration of transfer of such Class R Certificate was not
in fact permitted by this Section, be restored to all rights as
Holder thereof retroactive to the date of registration of transfer of
such Class R Certificate. The Trustee shall be under no liability to
any Person for any registration of transfer of a Class R Certificate
that is in fact not permitted by this Section or for making any
distributions due on such Class R Certificate to the Holder thereof
or taking any other action with respect to such Holder under the
provisions of this Agreement so long as the Trustee received the
documents specified in clause (iii). The Trustee shall be entitled to
recover from any Holder of a Class R Certificate that was in fact not
a Permitted Transferee at the time such distributions were made all
distributions made on such Class R Certificate. Any such
distributions so recovered by the Trustee shall be distributed and
delivered by the Trustee to the prior Holder of such Class R
Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right
but not the obligation, without notice to the Holder of such Class R
Certificate or any other Person having an Ownership Interest therein,
to notify the Depositor to arrange for the sale of such Class R
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Class R
Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of such Class R
Certificate may be liable for any amount due under this Section or
any other provisions of this Agreement, the Trustee may withhold a
corresponding amount from such remittance as security for such claim.
The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be
liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from the Rating Agencies that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause either REMIC hereunder to fail to
qualify as a REMIC.
(e) No service charge shall be made for any registration of transfer
or exchange of Certificates of any Class, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to
its standard procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction
of the destruction, loss or theft of any Certificate and (ii) there is
delivered to the Trustee, the Depositor and the Certificate Registrar such
security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute on behalf of the Trust, 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 Percentage Interest. Upon the
issuance of any new Certificate under this Section, the Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee and the
Certificate Registrar) in connection therewith. Any duplicate Certificate
issued pursuant to this Section, shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Master Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the
Depositor, the Certificate Registrar, any Paying Agent or the Trustee may
treat the Person, including a Depository, in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and for all other purposes whatsoever,
and none of the Master Servicer, the Trust, the Trustee nor any agent of any
of them shall be affected by notice to the contrary.
Section 5.05. Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Certificateholders
from the Distribution Account pursuant to Section 4.01 and shall report the
amounts of such distributions to the Trustee. The duties of the Paying Agent
may include the obligation (i) to withdraw funds from the Collection Account
pursuant to Section 3.11(a) and for the purpose of making the distributions
referred to above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws
of the United States of America or any state thereof, authorized under such
laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authorities. The Paying Agent shall initially
be the Trustee. The Trustee may appoint a successor to act as Paying Agent,
which appointment shall be reasonably satisfactory to the Depositor.
(b) The Trustee shall cause the Paying Agent (if other than the
Trustee) to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent shall hold
all sums, if any, held by it for payment to the Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders and shall agree that it shall comply
with all requirements of the Code regarding the withholding of payments in
respect of Federal income taxes due from Certificate Owners and otherwise
comply with the provisions of this Agreement applicable to it.
ARTICLE VI
THE SELLERS, THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01. Liability of the Sellers, the Master Servicer and the
Depositor.
The Sellers and Master Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Sellers or Master Servicer, as the case may be, herein. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor.
Section 6.02. Merger or Consolidation of, or Assumption of the
Obligations of, any Seller, the Master Servicer or the Depositor.
Any entity into which the Sellers, Master Servicer or Depositor may
be merged or consolidated, or any entity resulting from any merger, conversion
or consolidation to which the Sellers and Master Servicer or the Depositor
shall be a party, or any corporation succeeding to the business of the Sellers
and Master Servicer or the Depositor, shall be the successor of the Sellers
and Master 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 Master Servicer shall satisfy all the requirements
of Section 7.02 with respect to the qualifications of a successor Master
Servicer.
Section 6.03. Limitation on Liability of the Master Servicer and
Others.
Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from
the taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad
faith or negligence in the performance of duties of the Master Servicer or by
reason of its failure to perform its obligations and duties hereunder;
provided, further, that this provision shall not be construed to entitle the
Master Servicer to indemnity in the event that amounts advanced by the Master
Servicer to retire any senior lien exceed Liquidation Proceeds (in excess of
related liquidation expenses) realized with respect to the related Mortgage
Loan. The preceding sentence shall not limit the obligations of the Master
Servicer pursuant to Section 8.05. The Master Servicer and any director or
officer or employee or agent of the Master Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Master Servicer and any
director or officer or employee or agent of the Master Servicer shall be
indemnified by the Trust and held harmless against any loss, liability or
expense incurred in connection with any legal action relating to this
Agreement or the Certificates, other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of its
willful misfeasance, bad faith or negligence in the performance of duties
hereunder or by reason of its failure to perform its obligations and duties
hereunder. The Master Servicer may undertake any such action which it may deem
necessary or desirable in respect of this Agreement, and the rights and duties
of the parties hereto and the interests of the Certificateholders hereunder.
The Master Servicer's right to indemnity or reimbursement pursuant to this
Section shall be subject to the payment priority described in Section 4.01(a)
and shall survive any resignation or termination of the Master Servicer
pursuant to Section 6.04 or 7.01 with respect to any losses, expenses, costs
or liabilities arising prior to such resignation or termination (or arising
from events that occurred prior to such resignation or termination). This
paragraph shall apply to the Master Servicer solely in its capacity as Master
Servicer hereunder and in no other capacities.
Section 6.04. Master Servicer Not to Resign.
Subject to the provisions of Section 7.01 and Section 6.02, the
Master Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Master Servicer so causing such a conflict being of a type
and nature carried on by the Master Servicer or its subsidiaries or Affiliates
at the date of this Agreement or (ii) upon satisfaction of the following
conditions: (a) the Master Servicer has proposed a successor master servicer
to the Trustee in writing and such proposed successor master servicer is
acceptable to the Trustee, (b) each Rating Agency shall have delivered a
letter to the Trustee prior to the appointment of the successor master
servicer stating that the proposed appointment of such successor master
servicer as Master Servicer hereunder will not result in the reduction or
withdrawal of the then current rating of the Regular Certificates; provided,
however, that no such resignation by the Master Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Master Servicer's responsibilities and
obligations hereunder or the Trustee shall have designated a successor
servicer in accordance with Section 7.02. Any such resignation shall not
relieve the Master Servicer of responsibility for any of the obligations
specified in Sections 7.01 and 7.02 as obligations that survive the
resignation or termination of the Master Servicer. Any such determination
permitting the resignation of the Master Servicer pursuant to clause (i) above
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Trustee. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Trustee.
Section 6.05. Delegation of Duties.
In the ordinary course of business, the Master Servicer at any time
may delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not
relieve the Master Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the
meaning of Section 6.04. The Master Servicer shall provide the Trustee with 60
days prior written notice prior to the delegation of any of its duties to any
Person other than any of the Master Servicer's Affiliates or their respective
successors and assigns.
ARTICLE VII
DEFAULT
Section 7.01. Master Servicer Events of Termination.
(a) If any one of the following events ("Master Servicer Events of
Termination") shall occur and be continuing:
(i) the failure by the Master Servicer to make any Advance or
to deposit in the Collection Account or Distribution Account any
deposit required to be made under the terms of this Agreement; or
(ii) the failure by the Master Servicer to make any required
Servicing Advance which failure continues unremedied for a period of
30 days, or the failure by the Master Servicer duly to observe or
perform, in any material respect, any other covenants, obligations or
agreements of the Master Servicer as set forth in this Agreement,
which failure continues unremedied for a period of 30 days, after the
date (A) on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Master Servicer by the
Trustee or to the Master Servicer and the Trustee by any Holder of a
Regular Certificate evidencing at least 25% of the Voting Rights or
(B) actual knowledge of such failure by a Servicing Officer of the
Master Servicer; or
(iii) the entry against the Master Servicer of a decree or
order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding up
or liquidation of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of 60 days; or
(iv) the Master Servicer shall voluntarily go into liquidation,
consent to the appointment of a conservator or receiver or liquidator
or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or
substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises
for the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations;
(b) then, and in each and every such case, so long as a Master
Servicer Event of Termination shall not have been remedied within the
applicable grace period, in the case of, (ii), (iii) and (iv) above, the
Trustee shall, at the direction of the Holders of each Class of Regular
Certificates evidencing Percentage Interests aggregating not less than 51%, by
notice then given in writing to the Master Servicer (and to the Trustee if
given by Holders of Certificates), terminate all of the rights and obligations
of the Master Servicer as servicer under this Agreement. Any such notice to
the Master Servicer shall also be given to the Rating Agencies, the Depositor
and the Sellers. On or after the receipt by the Master Servicer (and by the
Trustee if such notice is given by the Holders) of such written notice, all
authority and power of the Master Servicer under this Agreement, whether with
respect to the Certificates or the Mortgage Loans or otherwise, shall pass to
and be vested in the Trustee; and, without limitation, and the Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether
to complete the transfer and endorsement of each Mortgage Loan and related
documents or otherwise. The Master Servicer agrees to cooperate with the
Trustee in effecting the termination of the responsibilities and rights of the
Master Servicer hereunder, including, without limitation, the delivery to the
Trustee of all documents and records requested by it to enable it to assume
the Master Servicer's functions under this Agreement within ten Business Days
subsequent to such notice, the transfer within one Business Day subsequent to
such notice to the Trustee for the administration by it of all cash amounts
that shall at the time be held by the Master Servicer and to be deposited by
it in the Collection Account, the Distribution Account, any REO Account or any
Servicing Account or that have been deposited by the Master Servicer in such
accounts or thereafter received by the Master Servicer with respect to the
Mortgage Loans or any REO Property received by the Master Servicer. All
reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the Master Servicer's duties and the Mortgage
Files to the successor master servicer and amending this Agreement to reflect
such succession as Master Servicer pursuant to this Section shall be paid by
the predecessor Master Servicer (or if the predecessor Master Servicer is the
Trustee, the initial Master Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Section 7.02. Trustee to Act; Appointment of Successor.
(a) From and after the date the Master Servicer (and the Trustee, if
notice is sent by the Holders) receives a notice of termination pursuant to
Section 7.01 or 6.04, the Trustee shall be the successor in all respects to
the Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer by the terms and provisions hereof arising on and after its
succession. As compensation therefor, the Trustee shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if
no such notice of termination had been given. Notwithstanding the above, (i)
if the Trustee is unwilling to act as successor Master Servicer or (ii) if the
Trustee is legally unable so to act, the Trustee shall appoint or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $15,000,000 as the successor to the Master
Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer hereunder;
provided, that the appointment of any such successor Master Servicer shall not
result in the qualification, reduction or withdrawal of the ratings assigned
to the Certificates or the ratings that are in effect by the Rating Agencies
as evidenced by a letter to such effect from the Rating Agencies. Pending
appointment of a successor to the Master Servicer hereunder, unless the
Trustee is prohibited by law from so acting, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Master Servicer would otherwise have received pursuant to Section 3.18. The
appointment of a successor Master Servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement
prior to its termination as Master Servicer to pay any deductible under an
insurance policy pursuant to Section 3.14 or to indemnify the Trustee pursuant
to Section 8.05), nor shall any successor Master Servicer be liable for any
acts or omissions of the predecessor Master Servicer or for any breach by such
Master Servicer of any of its representations or warranties contained herein
or in any related document or agreement. The Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) Any successor, including the Trustee, to the Master Servicer as
master servicer shall during the term of its service as master servicer
continue to service and administer the Mortgage Loans for the benefit of
Certificateholders, and maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Master
Servicer hereunder and a Fidelity Bond in respect of its officers, employees
and agents to the same extent as the Master Servicer is so required pursuant
to Section 3.14.
Section 7.03. Waiver of Master Servicer Events of Termination.
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Master Servicer
as servicer pursuant to this Article VII, provided, however, that the Majority
Certificateholders may not waive an event that results in a failure to make
any required distribution on a Certificate without the consent of the Holder
of such Certificate. Upon any waiver of a Master Servicer Event of
Termination, such event shall cease to exist and any Master Servicer Event of
Termination arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other event or impair any right consequent thereto except to the extent
expressly so waived. Notice of any such waiver shall be given by the Trustee
to the Rating Agencies.
Section 7.04. Notification to Certificateholders.
(a) Upon any termination or appointment of a successor the Master
Servicer pursuant to this Article VII or Section 6.04, 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) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute
a Master Servicer Event of Termination for five Business Days after a
Responsible Officer of the Trustee becomes aware of the occurrence of such an
event, the Trustee shall transmit by mail to all Certificateholders notice of
such occurrence unless such Master Servicer Event of Termination shall have
been waived or cured.
Section 7.05. Survivability of Master Servicer Liabilities.
Notwithstanding anything herein to the contrary, upon termination of
the Master Servicer hereunder, any liabilities of the Master Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of a Master Servicer Event of
Termination and after the curing or waiver of all Master Servicer Events of
Termination which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement. If a Master
Servicer Event of Termination has occurred (which has not been cured or
waived) of which a Responsible Officer has knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee, which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement; provided, however,
that the Trustee will not be responsible for the accuracy or content of any
such resolutions, certificates, statements, opinions, reports, documents or
other instruments. If any such instrument is found not to conform to the
requirements of this Agreement in a material manner the Trustee shall take
such action as it deems appropriate to have the instrument corrected.
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 willful misconduct; provided, however, that:
(i) prior to the occurrence of a Master Servicer Event of
Termination, and after the curing of all such Master Servicer Events
of Termination which may have occurred, the duties and obligations of
the Trustee shall be determined solely by the express provisions of
this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and, in the absence of
bad faith on the part of the Trustee, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(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 the relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising or omitting to exercise any
trust or power conferred upon the Trustee, under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the obligations of the
Master Servicer referred to in clauses (i) and (ii) of Section
7.01(a) unless a Responsible Officer of the Trustee at the Corporate
Trust Office obtains actual knowledge of such failure or the Trustee
receives written notice of such failure from the Master Servicer or
the Majority Certificateholders.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of,
any of the obligations of the Master Servicer under this Agreement, except
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer
in accordance with the terms of this Agreement.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(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 auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties, and the manner of obtaining consents and
of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe;
(ii) the Trustee may consult with counsel and any written
advice of its 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 advice or Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of 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; the right of
the Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Trustee shall not
be answerable for other than its negligence or willful misconduct in
the performance of any such act;
(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 a Master Servicer Event of
Termination and after the curing or waiver of all Master Servicer
Events of Termination which may have occurred, the Trustee shall not
be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other
paper or documents, unless requested in writing to do so by the
Majority Certificateholder; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such cost, expense or liability as a condition to such proceeding.
The reasonable expense of every such examination shall be paid by the
Master Servicer or, if paid by the Trustee, shall be reimbursed by
the Master Servicer upon demand. Nothing in this clause (v) shall
derogate from the obligation of the Master Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer until such time as the Trustee may
be required to act as Master Servicer pursuant to Section 7.02 and
thereupon only for the acts or omissions of the Trustee as successor
Master Servicer;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian; and
(viii) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty,
and the Trustee shall not be answerable for other than its negligence
or willful misconduct in the performance of such act.
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Sellers, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates (other than
the signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document. The Trustee shall not be accountable for
the use or application by the Master Servicer, or for the use or application
of any funds paid to the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer.
The Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust or its ability to generate the payments to be
distributed to Certificateholders under this Agreement, including, without
limitation: the existence, condition and ownership of any Mortgaged Property;
the existence and enforceability of any hazard insurance thereon (other than
if the Trustee shall assume the duties of the Master Servicer pursuant to
Section 7.02); the validity of the assignment of any Mortgage Loan to the
Trustee or of any intervening assignment; the completeness of any Mortgage
Loan; the performance or enforcement of any Mortgage Loan (other than if the
Trustee shall assume the duties of the Master Servicer pursuant to Section
7.02); the compliance by the Depositor, the Sellers or the Master Servicer
with any warranty or representation made under this Agreement or in any
related document or the accuracy of any such warranty or representation prior
to the Trustee's receipt of notice or other discovery of any non-compliance
therewith or any breach thereof; any investment of monies by or at the
direction of the Master Servicer or any loss resulting therefrom, it being
understood that the Trustee shall remain responsible for any Trust property
that it may hold in its individual capacity; the acts or omissions of any of
the Master Servicer (other than if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.02), any Sub-Servicer or any Mortgagor;
any action of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02), or any Sub-Servicer
taken in the name of the Trustee; the failure of the Master Servicer or any
Sub-Servicer to act or perform any duties required of it as agent of the
Trustee hereunder; or any action by the Trustee taken at the instruction of
the Master Servicer (other than if the Trustee shall assume the duties of the
Master Servicer pursuant to Section 7.02); provided, however, that the
foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement, including, without limitation, the Trustee's duty
to review the Mortgage Files, if so required pursuant to Section 2.01. The
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder
(unless the Trustee shall have become the successor Servicer).
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact any banking and trust
business with the Sellers, the Master Servicer, the Depositor or their
Affiliates with the same rights as it would have if it were not Trustee.
Section 8.05. Trustee's Fees and Expenses.
The Trustee shall be entitled to such compensation as has been
separately agreed with the Master Servicer and to the benefit of uninvested
balances in the Distribution Account for all services rendered by the Trustee
in the exercise and performance of any of the powers and duties hereunder. The
Sellers will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith or which
is the responsibility of Certificateholders or the Trustee hereunder. In
addition, each Seller and the Master Servicer covenants and agrees to
indemnify the Trustee and its officers, directors, employees and agents from,
and hold it harmless against, any and all losses, liabilities, damages, claims
or expenses incurred in connection with any legal action relating to this
Agreement, the Trust Fund or the Certificates, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence
of the Trustee in the performance of its duties hereunder or by reason of the
Trustee's reckless disregard of obligations and duties hereunder. This section
shall survive termination of this Agreement or the resignation or removal of
any Trustee hereunder.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be an entity duly organized
and validly existing under the laws of the United States of America or any
state thereof, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and a minimum
long-term debt rating of Baa3 by Moody's and BBB by Fitch and a short-term
rating of at least F-1 by Fitch, if rated by Fitch, and P-1 by Moody's, and
subject to supervision or examination by federal or state authority. If such
entity 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 8.06, the combined capital and surplus of such
entity shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The principal office of the
Trustee (other than the initial Trustee) shall be in a state with respect to
which an Opinion of Counsel has been delivered to such Trustee at the time
such Trustee is appointed Trustee to the effect that the Trust will not be a
taxable entity under the laws of such state. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.06, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.
Section 8.07. Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Sellers,
the Master Servicer and the Rating Agencies. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and having accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor or the Master Servicer may remove the Trustee. If the Depositor
or the Master Servicer removes the Trustee under the authority of the
immediately preceding sentence, the Master Servicer shall promptly appoint a
successor Trustee, with the consent of the Depositor, which consent shall not
be unreasonably withheld, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Master Servicer, the
Depositor and the Trustee; the Master Servicer, with the consent of the
Depositor, which consent shall not be unreasonably withheld, shall thereupon
use its best efforts to appoint a successor trustee in accordance with this
Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee
as provided in Section 8.08.
Section 8.08. Successor Trustee.
Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Sellers, the Master
Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee. The Depositor, the
Sellers, the Master Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor
Trustee all such rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 8.06 and the appointment of
such successor Trustee shall not result in a downgrading of the Senior
Certificates by either Rating Agency, as evidenced by a letter from each
Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment
of a successor Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to each Rating Agency.
Section 8.09. Merger or Consolidation of Trustee.
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
entity succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided such entity shall be eligible under the
provisions of Section 8.06 and 8.08, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located,
the Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons, with
the consent of the Depositor, which consent shall not be unreasonably
withheld, approved by the Trustee to act as co-trustee or co-trustees, jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Certificateholders, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section 8.10, such
powers, duties, obligations, rights and trusts as the Master Servicer and the
Trustee may consider necessary or desirable. Any such co-trustee or separate
trustee shall be subject to the written approval of the Master Servicer. If
the Master Servicer shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, or in the case a Master
Servicer Event of Termination 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 8.06, and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.08.
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 shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed 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 Master Servicer and the Trustee, acting jointly may
at any time accept the resignation of or remove any separate trustee
or co-trustee except that following the occurrence of a Master
Servicer Event of Termination, the Trustee acting alone may accept
the resignation or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided 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 Depositor and the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11. Limitation of Liability.
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the
Certificates is made and intended not as a personal undertaking or agreement
by the Trustee but is made and intended for the purpose of binding only the
Trust.
Section 8.12. Trustee May Enforce Claims Without Possession of
Certificates.
(a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee
shall be brought in its own name or in its capacity as Trustee for the benefit
of all Holders of such Certificates, subject to the provisions of this
Agreement. Any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel, be for the ratable benefit or the
Certificateholders in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Sellers, the Depositor, the Master
Servicer and each Certificateholder upon reasonable notice during normal
business hours, access to all records maintained by the Trustee in respect of
its duties hereunder and access to officers of the Trustee responsible for
performing such duties. Upon request, the Trustee shall furnish the Depositor,
the Master Servicer and any requesting Certificateholder with its most recent
financial statements. The Trustee shall cooperate fully with the Sellers, the
Master Servicer, the Depositor and such Certificateholder and shall make
available to the Sellers, the Master Servicer, the Depositor and such
Certificateholder for review and copying such books, documents or records as
may be requested with respect to the Trustee's duties hereunder. The Sellers,
the Depositor, the Master Servicer and the Certificateholders shall not have
any responsibility or liability for any action or failure to act by the
Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
Section 8.13. Suits for Enforcement.
In case a Master Servicer Event of Termination or other default by
the Master Servicer or the Depositor hereunder shall occur and be continuing,
the Trustee may proceed to protect and enforce its rights and the rights of
the Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution
of any power granted in this Agreement or for the enforcement of any other
legal, equitable or other remedy, as the Trustee, being advised by counsel,
and subject to the foregoing, shall deem most effectual to protect and enforce
any of the rights of the Trustee and the Certificateholders.
Section 8.14. Waiver of Bond Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15. Waiver of Inventory, Accounting and Appraisal
Requirement.
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16. Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer, appoint one
or more Custodians to hold all or a portion of the Mortgage Files as agent for
the Trustee, by entering into a Custodial Agreement. The Custodian may at any
time be terminated by the Master Servicer and a substitute Custodian appointed
therefor with the consent of the Trustee, which consent shall not be
unreasonably withheld. Subject to this Article VIII, the Trustee agrees to
comply with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $15,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. The Master
Servicer shall pay from its own funds, without any right to reimbursement, the
fees, costs and expenses of each Custodian (including the costs of Custodian's
counsel).
ARTICLE IX
REMIC ADMINISTRATION
Section 9.01. REMIC Administration.
(a) A separate REMIC election for the Loan Group I and Loan Group II,
as set forth in the Preliminary Statement, shall be made by the Trustee on
Form 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. The regular interests in each REMIC and residual
interest shall be as designated in the Preliminary Statement. The Trustee
shall account for the assets in Loan Group I, and its related Collection and
Distribution Accounts, as REMIC I, and the assets in Loan Group II, and its
related Collection and Distribution Accounts, as REMIC II.
(b) The Closing Date is hereby designated as the "Startup Day" of
both REMICs within the meaning of section 86OG(a)(9) of the Code.
(c) The Master Servicer shall pay any and all tax related expenses
(not including taxes) of the REMICs, including but not limited to any
professional fees or expenses related to audits or any administrative or
judicial proceedings with respect to the REMICs 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 Master Servicer in fulfilling
its duties hereunder (including its duties as tax return preparer). The Master
Servicer shall be entitled to reimbursement of expenses to the extent provided
in clause (i) above from the Collection Account.
(d) The Trustee shall prepare, and the Trustee shall sign and file,
all of the federal and state tax and information returns of each REMIC as the
direct representative. The expenses of preparing and filing such returns shall
be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding the
largest Percentage Interest thereof shall be the "tax matters person" as
defined in the REMIC Provisions (the "Tax Matters Person") with respect to the
REMICs and shall act as Tax Matters Person for the REMICs. The Trustee, as
agent for the Tax Matters Person, shall perform on behalf of the REMICs all
reporting and other tax compliance duties that are the responsibility of the
REMICs 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, as agent for the Tax Matters Person, 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 Master Servicer and the Holders of Certificates
shall take any action or cause either 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 Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause either 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 either REMIC as a REMIC or (ii) result in the
imposition of a tax upon either 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 Master
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 either REMIC or the
assets therein, or causing either 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 Master 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 either REMIC to take any such
action as to which the Trustee or the Master 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 REMICs 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 the REMICs or, if no such amounts are available, out
of other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the REMICs, as the case
may be.
(h) The Trustee, as agent for the Tax Matters Person, 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) No additional contributions of assets shall be made to either
REMIC, except as expressly provided in this Agreement with respect to eligible
substitute mortgage loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which either REMIC will receive a fee or other compensation for
services.
Section 9.02. Prohibited Transactions and Activities.
Neither the Depositor, the Master Servicer nor the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of either REMIC pursuant
to Article X of this Agreement, (iv) a substitution pursuant to Article II of
this Agreement or (v) a repurchase of Mortgage Loans pursuant to Article II of
this Agreement, nor acquire any assets for either REMIC, nor sell or dispose
of any investments in the Distribution Account for gain, nor accept any
contributions to either REMIC after the Closing Date, unless it has received
an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition,
substitution, or acceptance will not (a) affect adversely the status of such
REMIC as a REMIC or of the interests therein other than the Residual
Certificates as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates, (c) result in the encumbrance of
the assets transferred or assigned to the Trust Fund (except pursuant to the
provisions of this Agreement) or (d) cause either REMIC to be subject to a tax
on prohibited transactions or prohibited contributions pursuant to the REMIC
Provisions.
Section 9.03. Indemnification with Respect to Certain Taxes and Loss
of REMIC Status. In the event that either REMIC fails to qualify as a REMIC,
lose its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its
duties and obligations set forth herein, the Master Servicer shall indemnify
the Holder of the related Residual Certificate against any and all losses,
claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that the Master Servicer shall not be liable
for any such Losses attributable to the action or inaction of the Trustee, the
Depositor or the Holder of such Residual Certificate, as applicable, nor for
any such Losses resulting from misinformation provided by the Holder of such
Residual Certificate on which the Master Servicer has relied. The foregoing
shall not be deemed to limit or restrict the rights and remedies of the Holder
of such Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Master Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than
arising out of a negligent performance by the Master Servicer of its duties
and obligations set forth herein, and (3) for any special or consequential
damages to Certificateholders (in addition to payment of principal and
interest on the Certificates).
Section 9.04. REO Property.
(a) Notwithstanding any other provision of this Agreement, the Master
Servicer, acting on behalf of the Trustee hereunder, shall not, and shall not
permit any Subservicer to, rent, lease, or otherwise earn income on behalf of
any REMIC with respect to any REO Property which might cause such REO Property
to fail to qualify as "foreclosure" property within the meaning of section
860G(a)(8) of the Code or result in the receipt by any REMIC of any "income
from non-permitted assets" within the meaning of section 860F(a)(2) of the
Code or any "net income from foreclosure property" which is subject to tax
under the REMIC Provisions unless the Master Servicer has advised the Trustee
in writing to the effect that, under the REMIC Provisions, such action would
not adversely affect the status of any REMIC as a REMIC and any income
generated for such REMIC by the REO Property would not result in the
imposition of a tax upon such REMIC.
(b) The Master Servicer shall make reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Master Servicer
shall dispose of any REO Property within three years of its acquisition by the
Trust Fund unless the Master Servicer on behalf of the Trust Fund has received
a grant of extension from the Internal Revenue Service to the effect that,
under the REMIC Provisions and any relevant proposed legislation and under
applicable state law, each REMIC may hold REO Property for a longer period
without adversely affecting the REMIC status of each REMIC or causing the
imposition of a Federal or state tax upon each REMIC. If the Master Servicer
has received such an extension, then the Master Servicer shall continue to
attempt to sell the REO Property for its fair market value for such period
longer than three years as such extension permits (the "Extended Period"). If
the Master Servicer has not received such an extension and the Master Servicer
is unable to sell the REO Property within 33 months after its acquisition by
the Trust Fund or if the Master Servicer has received such an extension, and
the Master Servicer is unable to sell the REO Property within the period
ending three months before the close of the Extended Period, the Master
Servicer shall before the end of the three year period or the Extended Period,
as applicable, (i) purchase such REO Property at a price equal to the REO
Property's fair market value or (ii) auction the REO Property to the highest
bidder (which may be the Master Servicer) in an auction reasonably designed to
produce a fair price prior to the expiration of the three-year period or the
Extended Period, as the case may be.
ARTICLE X
TERMINATION
Section 10.01. Termination.
(a) The respective obligations and responsibilities of the Sellers,
the Master Servicer, the Depositor and the Trustee created hereby (other than
the obligation of the Trustee to make certain payments to Certificateholders
after the final Distribution Date and the obligation of the Master Servicer to
send certain notices as hereinafter set forth) shall terminate with respect to
a Loan Group upon notice to the Trustee upon the earliest of (i) the
Distribution Date on which the Certificate Principal Balance of each Class of
Certificates of such Certificate Group (other than the Class R Certificates)
has been reduced to zero, (ii) the final payment or other liquidation of the
last Mortgage Loan of such Loan Group, (iii) the optional purchase by the
Master Servicer of the related Mortgage Loans in such Loan Group as described
below and (iv) the Distribution Date in November 2015 with respect to Loan
Group I and November 2030 with respect to Loan Group II. Notwithstanding the
foregoing, in no event shall the trust created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants
of Joseph P. Kennedy, the late ambassador of the United States to the Court of
St. James's, living on the date hereof.
The Master Servicer may, at its option, terminate this Agreement with
respect to a Loan Group on any date on which the aggregate of the Principal
Balances of the Mortgage Loans in such Loan Group on such date is less than
10% of the aggregate of the Cut-off Date Principal Balance of the Mortgage
Loans of such Loan Group, by purchasing, on the next succeeding Distribution
Date, all of the outstanding Mortgage Loans and REO Properties of such Loan
Group at a price equal to the sum of the outstanding Stated Principal Balance
of the Mortgage Loans of such Loan Group and accrued and unpaid interest
thereon at the weighted average of the Mortgage Rates through the end of the
Due Period preceding the final Distribution Date plus unreimbursed Servicing
Advances and any unpaid Servicing Fees allocable to such Mortgage Loans and
REO Properties (the "Termination Price").
In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer shall deposit in the Distribution Account all
amounts then on deposit in the Collection Account, which deposit shall be
deemed to have occurred immediately preceding such purchase.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee upon the Trustee receiving notice of such date from the Master
Servicer, by letter to the Certificateholders mailed not earlier than the 15th
day and not later than the 25th day of the month immediately preceding the
month of such final distribution specifying (1) the Distribution Date upon
which final distribution of the Certificates will be made upon presentation
and surrender of such Certificates at the office or agency of the Trustee
therein designated, (2) the amount of any such final distribution and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Holders of the Certificates on the
Distribution Date for such final distribution, in proportion to the Percentage
Interests of their respective Class and to the extent that funds are available
for such purpose, an amount equal to the amount required to be distributed to
such Holders in accordance with the provisions of Section 4.01 for such
Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Trustee shall promptly following such date cause all
funds in the Distribution Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate Servicing Account
for the benefit of such Certificateholders, and the Master Servicer (if the
Master Servicer has exercised its right to purchase the Mortgage Loans) or the
Trustee (in any other case) shall give a second written notice to the
remaining Certificateholders, to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within nine months
after the second notice all the Certificates shall not have been surrendered
for cancellation, the Class R Certificateholder shall be entitled to all
unclaimed funds and other assets which remain subject hereto, and the Trustee
upon transfer of such funds shall be discharged of any responsibility for such
funds, and the Certificateholders shall look to the Class R Certificateholder
for payment.
Section 10.02. Additional Termination Requirements.
(a) In the event that the Master Servicer exercises its purchase
option as provided in Section 10.01, the Trust shall be terminated in
accordance with the following additional requirements, unless the Trustee
shall have been furnished with an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section will not
(i) result in the imposition of taxes on "prohibited transactions" of the
Trust as defined in Section 860F of the Code or (ii) cause either REMIC
constituting part of the Trust Fund 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, the
Trustee shall adopt and sign a plan of complete liquidation of the
related REMIC meeting the requirements of a "Qualified Liquidation"
under Section 860F of the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the Trust to the Master
Servicer for cash pursuant to the terms of the plan of complete
liquidation; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited to the Holders of each Class of the
Certificates, the related Certificate Principal Balance of the Class,
plus one month's interest thereon at the applicable Pass-Through Rate
and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof hereby
agree to appoint the Trustee as their attorney in fact to: (i) adopt such a
plan of complete liquidation (and the Certificateholders hereby appoint the
Trustee as their attorney in fact to sign such plan) as appropriate and (ii)
to take such other action in connection therewith as may be reasonably
required to carry out such plan of complete liquidation all in accordance with
the terms hereof.
ARTICLE XI
Reserved
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01. Amendment.
This Agreement may be amended from time to time by Sellers, the
Depositor, the Master Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) to make any other provisions with respect to
matters or questions arising under this Agreement, which shall not be
inconsistent with the provisions of this Agreement; provided, however, that
any such action listed in clause (i) through (iii) above shall be deemed not
to adversely affect in any material respect the interests of any
Certificateholder, if evidenced by (i) written notice to the Depositor, the
Sellers, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of
any outstanding Class of Certificates with respect to which it is a Rating
Agency or (ii) an Opinion of Counsel delivered to the Master Servicer and the
Trustee.
In addition, this Agreement may be amended from time to time by
Sellers, the Depositor, the Master Servicer and the Trustee with the consent
of the Majority Certificateholders for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment or waiver shall (x)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates which are required to be made on any Certificate without the
consent of the Holder of such Certificate, (y) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in
a manner other than as described in clause (x) above, without the consent of
the Holders of Certificates of such Class evidencing at least a 66% Percentage
Interest in such Class, or (z) reduce the percentage of Voting Rights required
by clause (y) above without the consent of the Holders of all Certificates of
such Class then outstanding. Upon approval of an amendment, a copy of such
amendment shall be sent to the Rating Agencies.
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense
of, unless such Person is the Trustee) the Person seeking such Amendment, to
the effect that such amendment will not result in the imposition of a tax on
either REMIC constituting part of the Trust Fund pursuant to the REMIC
Provisions or cause either REMIC constituting part of the Trust to fail to
qualify as a REMIC at any time that any Certificates are outstanding and that
the amendment is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is a Seller or the Master Servicer (but in no event at the expense of
the Trustee), otherwise at the expense of the Trust, a copy of such amendment
and the Opinion of Counsel referred to in the immediately preceding paragraph
to the Master Servicer and the Rating Agencies.
It shall not be necessary for the consent of Certificateholders under
this Section 12.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this 12.01 Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 12.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute
but one and the same instrument.
Section 12.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not (i)
operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
to take any action or proceeding in any court for a partition or winding up of
the Trust, or (iii) otherwise affect the rights, obligations and liabilities
of the parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to any third person by reason of any action taken by the
parties to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more
Holders of Certificates shall have any right in any manner whatever by virtue
of any provision of this Agreement to affect, disturb or prejudice the rights
of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 12.03 each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 12.04. Governing Law; Jurisdiction.
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to
any claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of
or relating hereto brought in any such courts, irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in any inconvenient forum and further irrevocably waives the right to
object, with respect to such claim, suit, action or proceeding brought in any
such court, that such court does not have jurisdiction over such party,
provided that service of process has been made by any lawful means.
Section 12.05. Notices.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed
by first class mail, postage prepaid, or by express delivery service, to (a)
in the case of the applicable Seller, to that Seller c/o Fifth Third Bank, 38
Fountain Square Plaza, MD: 1090A3, Cincinnati, Ohio 45263, Attention: John
DeQuattro with a copy to the General Counsel, or such other address or
telecopy number as may hereafter be furnished to the Depositor, the Trustee
and the Master Servicer in writing by such Seller, (b) in the case of the
Master Servicer, to Fifth Third Bank, 38 Fountain Square Plaza, MD: 1090A3,
Cincinnati, Ohio 45263, Attention: John DeQuattro with a copy to the General
Counsel; (c) in the case of the Trustee, to Bank One, National Association, 1
Bank One Plaza, Suite IL1-0126, Chicago, Illinois 60670-0126, Attention:
Global Corporate Trust Services or such other address or telecopy number as
may hereafter be furnished to the Depositor, the Sellers and the Master
Servicer in writing by the Trustee, (d) in the case of the Depositor,
Greenwich Capital Acceptance, Inc., 600 Steamboat Road, Greenwich, Connecticut
06830, Attention: General Counsel, (203) 625-6065 (telecopy number (203)
629-4571), or such other address or telecopy number as may be furnished to the
Sellers, the Master Servicer and the Trustee in writing by the Depositor. Any
notice required or permitted to be mailed to a Certificateholder shall be
given by first class mail, postage prepaid, at the address of such Holder as
shown in the Certificate Register. Notice of any Master Servicer Event of
Termination shall be given by telecopy and by certified mail. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have duly been given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder shall also be mailed to the appropriate party in the
manner set forth above.
Section 12.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07. Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 12.08. Notice to the Rating Agencies.
(a) Each of the Trustee and the Master Servicer shall be obligated to
use its best reasonable efforts promptly to provide notice to the Rating
Agencies with respect to each of the following of which a Responsible Officer
of the Trustee or the Master Servicer, as the case may be, has actual
knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of Termination
that has not been cured or waived;
(iii) the resignation or termination of the Master Servicer or
the Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor Master Servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(b) In addition, the Trustee shall promptly furnish to the Rating
Agencies copies of each Statement to Certificateholders described in Section
4.03 hereof; and
(i) the Master Servicer shall promptly furnish to each Rating Agency
copies of the following:
(A) each annual statement as to compliance described
in Section 3.20 hereof;
(B) each annual independent public accountants'
servicing report described in Section 3.21 hereof; and
(C) each notice delivered pursuant to Section
7.01(a) hereof which relates to the fact that the Master
Servicer has not made an Advance.
Any such notice pursuant to this Section 12.08 shall be in writing
and shall be deemed to have been duly given if personally delivered or mailed
by first class mail, postage prepaid, or by express delivery service to
Moody's Investors Service, Inc., 99 Church Street, New York, NY 10005,
Attention: MBS Monitoring/Fifth Third Mortgage Loan Trust 1999-1; and Fitch
IBCA, Inc., One State Street Plaza, New York, NY 10004.
Section 12.09. Further Assurances.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to
consent to any amendment or modification of this Agreement unless they have
been provided reasonable security or indemnity against their out-of-pocket
expenses (including reasonable attorneys' fees) to be incurred in connection
therewith.
Section 12.10. Benefits of Agreement.
Nothing in this Agreement or in the Certificates, expressed or
implied, shall give to any Person, other than the Certificateholders and the
parties hereto and their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
Section 12.11. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by agent duly appointed in writing, and such action shall become effective
when such instrument or instruments are delivered to the Trustee, Sellers and
the Master Servicer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "act"
of the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and conclusive in favor
of the Trustee and the Trust, if made in the manner provided in this Section
12.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Whenever such execution is by a signer acting in a capacity other than his or
her individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by any Certificateholder shall bind every future Holder
of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee or
the Trust in reliance thereon, whether or not notation of such action is made
upon such Certificate.
<PAGE>
IN WITNESS WHEREOF, the Depositor, the Sellers and the Master
Servicer and the Trustee have caused their names to be signed hereto by their
respective officers thereunto duly authorized, all as of the day and year
first above written.
GREENWICH CAPITAL ACCEPTANCE, INC.,
as Depositor
By: /s/ John Graham
______________________________
Name:
Title: Vice President
FIFTH THIRD BANK,
as Master Servicer
By: /s/ James R. Hubbard
_____________________________________
Name:
Title:
FIFTH THIRD MORTGAGE COMPANY,
as Seller
By: /s/ Richard A. Bondle
______________________________________
Name:
Title:
FIFTH THIRD BANK, CENTRAL OHIO,
as Seller
By: /s/ Neal Arnold
_______________________________________
Name:
Title:
FIFTH THIRD BANK, FLORIDA,
as Seller
By: /s/ Neal Arnold
________________________________________
Name:
Title:
FIFTH THIRD BANK, INDIANA,
as Seller
By: /s/ Neal Arnold
_________________________________________
Name:
Title:
FIFTH THIRD BANK, KENTUCKY, INC.,
as Seller
By: /s/ Neal Arnold
_________________________________________
Name:
Title:
FIFTH THIRD BANK, NORTHERN KENTUCKY,
INC., as Seller
By: /s/ Neal Arnold
_________________________________________
Name:
Title:
FIFTH THIRD BANK, NORTHWESTERN, OHIO,
N.A., as Seller
By: /s/ Neal Arnold
_________________________________________
Name:
Title:
FIFTH THIRD BANK, OHIO VALLEY,
as Seller
By: /s/ Neal Arnold
_________________________________________
Name:
Title:
FIFTH THIRD BANK, SOUTHWEST, F.S.B.,
as Seller
By: /s/ Neal Arnold
________________________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Neal Arnold
________________________________________
Name:
Title:
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a Vice
President of Greenwich Capital Acceptance, Inc., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------
Notary Public
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, a _______________ 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank Mortgage Company, a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Central Ohio, a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Florida, a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Indiana, a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Kentucky, Inc., a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Northern Kentucky, Inc., a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Northwestern Ohio, N.A., a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Ohio Valley, a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared ______________ known to me to be a
_______________________ of Fifth Third Bank, Southeast, F.S.B., a 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
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the __th day of December, 1999 before me, a notary public in and
for said State, personally appeared _______________, known to me to be
____________________ of Bank One, National Association, a national banking
association that executed the within instrument, and also known to me to be
the person who executed it on behalf of said association, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------
Notary Public
EXHIBIT 10.2
EXECUTION COPY
GREENWICH CAPITAL ACCEPTANCE, INC.,
as Purchaser
and
FIFTH THIRD MORTGAGE COMPANY
FIFTH THIRD BANK, CENTRAL OHIO
FIFTH THIRD BANK, FLORIDA
FIFTH THIRD BANK, INDIANA
FIFTH THIRD BANK, KENTUCKY, INC.
FIFTH THIRD BANK, NORTHERN KENTUCKY, INC.
FIFTH THIRD BANK, NORTHWESTERN, OHIO, N.A.
FIFTH THIRD BANK, OHIO VALLEY
FIFTH THIRD BANK, SOUTHWEST, F.S.B.
as Sellers
and
FIFTH THIRD BANK
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of December 1, 1999
Fixed-Rate Mortgage Loans
Fifth Third Mortgage Loan Trust 1999-1
<PAGE>
<TABLE>
<CAPTION>
Table of Contents
Page
----
ARTICLE I.
DEFINITIONS AND SCHEDULES
<S> <C> <C>
Section 1.01. Definitions........................................................................1
Section 1.02. Schedules..........................................................................2
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of Mortgage Loans.............................................................2
Section 2.02. Obligations of the Sellers Upon Sale...............................................2
Section 2.03. Payment of Purchase Price for the Mortgage Loans...................................5
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Sellers' and Fifth Third Bank's Representations and Warranties Relating
to the Mortgage Loans..............................................................5
Section 3.02. Additional Sellers' Representations and Warranties.................................6
Section 3.03. Remedies for Breach of Representations and Warranties..............................7
ARTICLE IV.
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers...........................................................9
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01. Indemnification....................................................................9
ARTICLE VI.
TERMINATION
Section 6.01. Termination.......................................................................12
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.........................................................................12
Section 7.02. Governing Law.....................................................................12
Section 7.03. Notices...........................................................................12
Section 7.04. Severability of Provisions........................................................13
Section 7.05. Counterparts......................................................................13
Section 7.06. Further Agreements................................................................13
Section 7.07. Intention of the Parties..........................................................14
Section 7.08. Successors and Assigns: Assignment of Purchase Agreement..........................14
Section 7.09. Survival..........................................................................14
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit A: Representations and Warranties Relating to the Mortgage Loans
Schedule A: Mortgage Loan Schedule of Fifth Third Mortgage Company........................................A-1
Schedule B: Mortgage Loan Schedule of Fifth Third Bank, Central Ohio......................................B-1
Schedule C: Mortgage Loan Schedule of Fifth Third Bank, Florida...........................................C-1
Schedule D: Mortgage Loan Schedule of Fifth Third Bank, Indiana...........................................D-1
Schedule E: Mortgage Loan Schedule of Fifth Third Bank, Kentucky, Inc.....................................E-1
Schedule F: Mortgage Loan Schedule of Fifth Third Bank, Northern Kentucky, Inc............................F-1
Schedule G: Mortgage Loan Schedule of Fifth Third Bank, Northwestern, Ohio, N.A...........................G-1
Schedule H: Mortgage Loan Schedule of Fifth Third Bank, Ohio Valley.......................................H-1
Schedule I: Mortgage Loan Schedule of Fifth Third Bank, Southwest, F.S.B..................................I-1
</TABLE>
<PAGE>
THIS MORTGAGE LOAN PURCHASE AGREEMENT, dated as of December 1, 1999
(the "Agreement"), is made and entered into among each of the Sellers named
below, Fifth Third Bank and Greenwich Capital Acceptance, Inc. (the
"Purchaser").
W I T N E S S E T H
WHEREAS, each of the Sellers is the owner of the notes or other
evidence of indebtedness (collectively, the "Mortgage Notes") so indicated on
the related Schedule referred to below and the other documents or instruments
constituting the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, each of the Sellers, as of the date hereof, owns the
mortgages (collectively, the "Mortgages") on the properties (collectively, the
"Mortgaged Properties") securing the Related Mortgage Loans, including rights
to (a) any property acquired by foreclosure or deed in lieu of foreclosure or
otherwise and (b) the proceeds of any insurance policies covering such
Mortgage Loans or the related Mortgaged Properties or the obligors on such
Mortgage Loans; and
WHEREAS, the parties hereto desire that each of the Sellers sell the
Related Mortgage Loans to the Purchaser pursuant to the terms of this
Agreement; and
WHEREAS, pursuant to the terms of that certain Pooling and Servicing
Agreement dated as of December 1, 1999 (the "Pooling and Servicing Agreement")
among the Purchaser, as depositor, the Sellers, Fifth Third Bank, as master
servicer, and Bank One, National Association, as trustee (the "Trustee"), the
Purchaser will convey the Mortgage Loans to Fifth Third Mortgage Loan Trust
1999-1 (the "Trust").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS AND SCHEDULES
Section 1.01. Definitions. Any capitalized term used but not defined
herein and below shall have the meaning assigned thereto in the Pooling and
Servicing Agreement.
"Purchaser Information": The information in the Prospectus
Supplement contained under the headings "SUMMARY OF TERMS--Tax
Status," "--ERISA Considerations," "CERTAIN MATERIAL FEDERAL INCOME
TAX CONSEQUENCES," and "ERISA CONSIDERATIONS" and in the Prospectus
contained under the headings "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS," and "ERISA CONSIDERATIONS".
"Related Mortgage Loans": With respect to each Seller, the Mortgage
Loans being sold by such Seller hereunder, as specified on the
Schedule relating to such Seller.
"Schedule": With respect to each Seller, the schedule attached to
this Agreement setting forth the Related Mortgage Loans.
"Seller", and in the aggregate "Sellers": Each of Fifth Third
Mortgage Company; Fifth Third Bank, Central Ohio; Fifth Third Bank,
Florida; Fifth Third Bank, Indiana; Fifth Third Bank, Kentucky,
Inc.; Fifth Third Bank, Northern Kentucky, Inc.; Fifth Third Bank,
Northwestern, Ohio, N.A.; Fifth Third Bank, Ohio Valley; and Fifth
Third Bank, Southwest, F.S.B.
"Sellers Information": The information in the Prospectus Supplement
contained under the headings "RISK FACTORS--Interest Payments May Be
Insufficient" (first sentence) and "THE SELLERS".
Section 1.02. Schedules.
Schedule A: Mortgage Loan Schedule of Fifth Third Mortgage Company
Schedule B: Mortgage Loan Schedule of Fifth Third Bank, Central Ohio
Schedule C: Mortgage Loan Schedule of Fifth Third Bank, Florida
Schedule D: Mortgage Loan Schedule of Fifth Third Bank, Indiana
Schedule E: Mortgage Loan Schedule of Fifth Third Bank, Kentucky, Inc.
Schedule F: Mortgage Loan Schedule of Fifth Third Bank, Northern Kentucky,
Inc.
Schedule G: Mortgage Loan Schedule of Fifth Third Bank, Northwestern, Ohio,
N.A.
Schedule H: Mortgage Loan Schedule of Fifth Third Bank, Ohio Valley
Schedule I: Mortgage Loan Schedule of Fifth Third Bank, Southwest, F.S.B.
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of Mortgage Loans. (i) Each of the Sellers,
concurrently with the execution and delivery of this Agreement, does hereby
sell, assign, set over, and otherwise convey to the Purchaser, without
recourse, (i) all of its right, title and interest in and to each of the
Related Mortgage Loans, including the related Cut-off Date Principal Balance,
all interest due thereon after the Cut-off Date and all collections in respect
of interest and principal due on or after the Cut-off Date; (ii) property
which secured such Mortgage Loan and which has been acquired by foreclosure or
deed in lieu of foreclosure; (iii) its interest in any insurance policies in
respect of the Related Mortgage Loans; and (iv) all proceeds of any of the
foregoing.
Section 2.02. Obligations of the Sellers Upon Sale. In connection with
any transfer pursuant to Section 2.01 hereof, each of the Sellers further
agrees, at its own expense, on or prior to the Closing Date or as otherwise
indicated in this Section 2.02, (a) to indicate in its books, records and
computer systems that the Related Mortgage Loans have been sold to the
Purchaser pursuant to this Agreement and (b) to deliver to the Purchaser and
the Trustee a computer file containing a true and complete list of all such
Mortgage Loans specifying for each such Mortgage Loan, as of the Cut-off Date,
(i) its account number and (ii) the Cut-off Date Principal Balance and such
file, which forms a part of Exhibit F to the Pooling and Servicing Agreement,
shall also be marked as the related Schedule to this Agreement and is hereby
incorporated into and made a part of this Agreement.
In connection with any such conveyance by any Seller, such Seller
shall on behalf of the Purchaser deliver to, and deposit with the Trustee, or
the Custodian on behalf of the Trustee, as assignee of the Purchaser, on or
before the Closing Date (or, with respect to (i) and (iii) below, within 30
days of the Closing Date), the following documents or instruments with respect
to each of the Related Mortgage Loans:
(i) the original Mortgage Note, endorsed on its face or by allonge
attached thereto in the following form: "Pay to the order of Bank One,
National Association, as Trustee", or endorsed in blank to provide for a
future insertion of the payee's name, with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to
the Person so endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if such Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon;
(iii) an original Assignment of the Mortgage executed in the
following form: "Bank One, National Association, as Trustee for Fifth Third
Mortgage Loan Trust 1999-1" or endorsed in blank to provide for a future
insertion of a designee trustee;
(iv) the original recorded Assignment or Assignments of the Mortgage
showing a complete chain of assignment from the originator to the Person
assigning the Mortgage to the Trustee as contemplated by the immediately
preceding clause (iii);
(v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any; and
(vi) the original lender's title insurance policy or attorney's
opinion of title or a copy thereof certified as true and correct by the
applicable insurer, together with all endorsements or riders that were issued
with or subsequent to the issuance of such policy, insuring the priority of
the Mortgage as a first lien on the Mortgaged Property represented therein as
a fee interest vested in the Mortgagor, or in the event such original title
policy is unavailable, a written commitment or uniform binder or preliminary
report of title issued by the title insurance or escrow company or a copy
thereof certified by the title company, with the original policy of title
insurance to be delivered within one year following the Closing Date.
Each of the Sellers hereby confirms to the Purchaser and the Trustee
that it has made the appropriate entries in its general accounting records, to
indicate that the Related Mortgage Loans have been transferred to the Trustee,
or the Custodian on behalf of the Trustee, and constitute part of the Trust in
accordance with the terms of the Pooling and Servicing Agreement.
If any original Mortgage Note referred to in Section 2.02(i) cannot
be located, the obligations of the related Seller to deliver such documents
shall be deemed to be satisfied upon delivery to the Trustee, or the Custodian
on behalf of the Trustee, as assignee of the Purchaser, of a photocopy of the
original of such Mortgage Note, with an original Lost Note Affidavit in the
form of Exhibit I to the Pooling and Servicing Agreement, provided, however,
that such substitutions of Lost Note Affidavits for original Mortgage Notes
may occur only with respect to Mortgage Loans the aggregate Cut-off Date
Principal Balance of which is less than or equal to 2.00% of the Pool Balance
as of the Cut-off Date. If any of the documents referred to in Sections
2.02(ii), (iii) or (iv) above has as of the Closing Date been submitted for
recording but either (x) has not been returned from the applicable public
recording office or (y) has been lost or such public recording office has
retained the original of such document, the obligations of the related Seller
to deliver such documents shall be deemed to be satisfied upon (1) delivery to
the Trustee, or the Custodian on behalf of the Trustee, as assignee of the
Purchaser, of a copy of each such document certified by such Seller in the
case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by such Seller, delivery to the
Trustee, or the Custodian on behalf of the Trustee, promptly upon receipt
thereof of either the original or a copy of such document certified by the
applicable public recording office to be a true and complete copy of the
original. Notice shall be provided to the Purchaser and the Trustee, or the
Custodian on behalf of the Trustee, by such Seller if delivery pursuant to the
immediately foregoing clause (2) will be made more than 180 days after the
Closing Date. If the original lender's title insurance policy was not
delivered pursuant to Section 2.02(vi) above, the related Seller shall deliver
or cause to be delivered to the Trustee, or the Custodian on behalf of the
Trustee, within a reasonable time period after receipt thereof, the original
lender's title insurance policy. The related Seller shall deliver or cause to
be delivered to the Trustee, or the Custodian on behalf of the Trustee, within
a reasonable time period upon receipt thereof any other original documents
constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an
assumption or modification of any Mortgage Loan.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing or
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
non-recourse sale by each of the Sellers to the Purchaser of all of such
Seller's right, title and interest in and to the Related Mortgage Loans and
other property described above. Nonetheless, in the event the transaction set
forth herein is deemed not to be a sale, each of the Sellers hereby grants to
the Purchaser a security interest in all of such Seller's right, title and
interest in, to and under the Related Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of
such Seller's obligations hereunder; and this Agreement shall constitute a
security agreement under applicable law. The Sellers and the Purchaser shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Pooling and Servicing Agreement.
Section 2.03. Payment of Purchase Price for the Mortgage Loans.
(a) In consideration of the sale of the Mortgage Loans from the
Sellers to the Purchaser on the Closing Date, the Purchaser agrees to deliver
to the Sellers or their designee the Certificates. The Sellers or their
designee shall pay to the Purchaser, or its designee (i) the amount set forth
in the Fifth Third Securitization Engagement Letter dated December 3, 1999
(the "Structuring Fee") and (ii) a reimbursement amount of $181,972.17
(representing S.E.C. filing fees associated with the Offered Certificates),
and (iii) an amount to cover all additional reasonable expenses incurred by
the Purchaser in connection with the issuance of the Certificates, including,
without limitation, printing fees incurred in connection with the prospectus
relating to the Certificates, blue sky registration fees and expenses, fees
and expenses of Purchaser's due diligence and counsel, fees of the rating
agencies requested to rate the Certificates, accountant's fees and expenses
and the fees and expenses of the Trustee, as set forth in the Trustee
Engagement Letter December 22, 1999 between Bank One N.A. and Fifth Third
Bank, and other out-of-pocket costs, if any.
(b) Within thirty days of the Closing Date, each of the Sellers, at
its own expense, shall submit for recording each related Assignment of
Mortgage in favor of the Trustee, or the Custodian (or provided with the
assignee in blank) as transferee of the Purchaser pursuant to the Pooling and
Servicing Agreement in the appropriate real property or other records in the
appropriate jurisdiction for the recordation of such documents. With respect
to any Assignment of Mortgage as to which the related recording information is
unavailable within the applicable time period set forth above, such Assignment
of Mortgage shall be submitted for recording within thirty Business Days after
receipt of such information but in no event later than six months from the
date such Assignment of Mortgage is otherwise required to be recorded pursuant
to this Section 2.04(b). The Trustee, or the Custodian on behalf of the
Trustee, shall be required to retain a copy of each Assignment of Mortgage
submitted for recording. In the event that any such Assignment of Mortgage is
lost or returned unrecorded because of a defect therein, the related Seller
shall within a reasonable time prepare a substitute Assignment of Mortgage or
cure such defect, as the case may be, and shall be required to submit each
such Assignment of Mortgage for recording. Any failure of a Seller to comply
with this Section shall result in the obligation of such Seller to repurchase
or substitute a Qualified Substitute Mortgage Loan for the Related Mortgage
Loan pursuant to the provisions of the Pooling and Servicing Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Sellers' and Fifth Third Bank's Representations and
Warranties Relating to the Mortgage Loans. Each Seller represents and warrants
to the Purchaser the representations and warranties set forth in Section A of
Exhibit A attached hereto with respect to each Related Mortgage Loan as of the
Closing Date (or as of such date specifically provided therein). Fifth Third
Bank represents and warrants to the Purchaser the representations and
warranties set forth in Section B of Exhibit A attached with respect to the
Mortgage Loans as of the Closing Date (or as of such date specifically
provided therein).
Section 3.02. Additional Sellers' Representations and Warranties. Each
Seller represents, warrants and covenants to the Purchaser as of the Closing
Date (or as of such other date specifically provided herein) that:
(i) It is duly organized, validly existing and in good standing
under the laws of the related jurisdiction and is and will remain in
compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to ensure the enforceability of each Related
Mortgage Loan in accordance with the terms of this Agreement;
(ii) It has the power and authority to hold each Related Mortgage
Loan, to sell such Mortgage Loan, to execute, deliver and perform, and to
enter into and consummate, all transactions contemplated by this Agreement. It
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement, and assuming due
authorization, execution and delivery by the Purchaser, constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or reorganization or laws in relation to the rights of creditors of
federally insured financial institutions;
(iii) The execution and delivery of this Agreement by it and the
performance of and compliance with the terms of this Agreement will not
violate any of its articles of association or articles of incorporation, as
applicable, or by-laws or constitute a default under or result in a material
breach or acceleration of, any material contract, agreement or other
instrument to which it is a party or which may be applicable to it or its
assets;
(iv) It is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with the
terms of this Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency having jurisdiction over it or its assets,
which violation might have consequences that would materially and adversely
affect the condition (financial or otherwise) or the operation of it or its
assets or might have consequences that would materially and adversely affect
the performance of its obligations and duties hereunder;
(v) [Reserved.]
(vi) It does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement;
(vii) Immediately prior to the delivery of the allocable portion of
the Purchase Consideration for each Related Mortgage Loan, it was the owner of
the related Mortgage and the indebtedness evidenced by the related Mortgage
Note and upon the payment of the allocable portion of the Purchase
Consideration by the Purchaser, in the event that it retains record title, it
shall retain such record title to each Mortgage, each related Mortgage Note
and the related Mortgage Files with respect thereto in trust for the Purchaser
or its assignee as the owner thereof and only for the purpose of servicing and
supervising the servicing of each such Mortgage Loan;
(viii) There are no actions or proceedings against it, or
investigations known to it, before any court, administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking to
prevent the sale of the Related Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit or
materially and adversely affect the performance by it of its obligations
under, or validity or enforceability of, this Agreement;
(ix) To the best of its knowledge, no consent, approval,
authorization or order of any court or governmental agency or body is required
for the execution, delivery and performance by it of, or compliance by it
with, this Agreement or the consummation of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or orders,
if any, that have been obtained;
(x) The consummation of the transactions contemplated by this
Agreement are in its ordinary course of business, and the transfer, assignment
and conveyance of the Mortgage Notes and the Mortgages by it pursuant to this
Agreement are not subject to the bulk transfer or any similar statutory
provisions;
(xi) Except with respect to any statement regarding the intentions
of the Purchaser, or any other statement contained herein the truth or falsity
of which is dependant solely upon the actions of the Purchaser, this Agreement
does not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents prepared and
furnished or to be prepared and furnished by it pursuant to this Agreement or
in connection with the transactions contemplated hereby taken in the aggregate
do not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements contained therein not
misleading.
Section 3.03. Remedies for Breach of Representations and Warranties. It is
understood and agreed that the representations and warranties set forth in
Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to the
Purchaser and shall inure to the benefit of the Purchaser and the Trustee,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or Assignment or the examination or lack of examination of any Mortgage File.
With respect to the representations and warranties contained herein that are
made to the knowledge or the best knowledge of the applicable Sellers or as to
which such Sellers have no knowledge, if it is discovered that the substance
of any such representation and warranty is inaccurate and the inaccuracy
materially and adversely affects the value of the Related Mortgage Loan or
Loans, or the interest therein of the Purchaser or the Purchaser's assignee,
designee or transferee, then notwithstanding such lack of knowledge with
respect to the substance of such representation and warranty being inaccurate
at the time the representation and warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation and warranty and the related
Seller shall take such action described in the following paragraphs of this
Section 3.03 in respect of each such Mortgage Loan. Upon discovery by the
related Seller, the Master Servicer or the Purchaser of a breach of any of the
foregoing representations and warranties that materially and adversely affects
the value of any Mortgage Loan or the interest of the Purchaser or the Trustee
(or which materially and adversely affects the value of a Mortgage Loan or the
interests of the Purchaser or the Trustee in such Mortgage Loan in the case of
a representation and warranty relating to a particular Mortgage Loan), the
party discovering such breach shall give prompt written notice to the other
parties.
Within 60 days of the earlier of either discovery by or notice to
the related Seller of any breach of a representation or warranty that
materially and adversely affects the value of a Mortgage Loan or the interest
of the Purchaser or the Trustee in such Mortgage Loan, such Seller shall use
its best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, such Seller shall repurchase such Mortgage Loan
at the Purchase Price. The related Seller may, at the request of the Purchaser
and assuming such Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the
related Seller does not provide a Qualified Substitute Mortgage Loan or Loans,
it shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage
Loan(s) pursuant to the foregoing provisions of this Section 3.03 shall occur
on a date designated by the Purchaser and shall be accomplished by deposit in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement.
At the time of substitution or repurchase of any deficient Mortgage
Loan, the Purchaser and related Seller shall arrange for the reassignment of
the deficient or repurchased Mortgage Loan to that Seller and the delivery to
that Seller of any documents held by the Trustee relating to the deficient or
repurchased Mortgage Loan. In the event the Purchase Price is deposited in the
Collection Account, the related Seller shall, simultaneously with such
deposit, give written notice to the Purchaser that such deposit has taken
place. Upon such repurchase, the Related Mortgage Loan Schedule shall be
amended to reflect the withdrawal of the repurchased Mortgage Loan from this
Agreement.
As to any Deleted Mortgage Loan for which a Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, such Seller shall effect such
substitution by delivering to the Purchaser or its designee for such Qualified
Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment and such other documents and agreements as are required by the
Custodial Agreement, with the Mortgage Note endorsed as required therein. The
related Seller shall deposit in the Collection Account the Monthly Payment due
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution will be retained by the
related Seller. For the month of substitution, distributions to the Purchaser
will include the Monthly Payment due on such Deleted Mortgage Loan in the
month of substitution, and the related Seller shall thereafter be entitled to
retain all amounts subsequently received by it in respect of such Deleted
Mortgage Loan. Upon such substitution, the Qualified Substitute Mortgage Loans
shall be subject to the terms of this Agreement in all respects, and that
Seller shall be deemed to have made with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the covenants,
representations and warranties set forth in Subsections 3.01 and 3.02 hereof.
It is understood and agreed that the representations and warranties
set forth in Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee on behalf of the Purchaser.
It is understood and agreed that the obligations of each Seller set
forth in this Section 3.03 to cure, repurchase and substitute for a defective
Mortgage Loan and to indemnify the Purchaser as provided in Section 5.01
constitute the sole remedies of the Purchaser respecting a missing or
defective document or a breach of the representations and warranties contained
in Section 3.01.
ARTICLE IV.
SELLERS' COVENANTS
Section 4.01. Covenants of the Sellers. Each Seller hereby covenants that
except for the transfer hereunder, it will not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist any
Lien on any Mortgage Loan, or any interest therein; it will notify the Trustee,
as assignee of the Purchaser, of the existence of any Lien on any Mortgage Loan
immediately upon discovery thereof; and it will defend the right, title and
interest of the Trust, as assignee of the Purchaser, in, to and under the
Related Mortgage Loans, against all claims of third parties claiming through or
under the related Seller; provided, however, that nothing in this Section 4.01
shall prevent or be deemed to prohibit such Seller from suffering to exist upon
any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if such taxes or governmental charges shall not at
the time be due and payable or if such Seller shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
ARTICLE V.
INDEMNIFICATION WITH RESPECT TO THE MORTGAGE LOANS
Section 5.01. Indemnification.
(a) The Sellers, severally and not jointly, agree to indemnify and
hold harmless the Purchaser, each of its directors, each of its officers and
each person or entity who controls the Purchaser or any such person, within
the meaning of Section 15 of the Securities Act, against any and all losses,
claims, damages or liabilities, joint and several, as incurred, to which the
Purchaser, or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse the Purchaser, each such
director and officer and each such controlling person for any legal or other
expenses incurred by the Purchaser or such controlling person in connection
with investigating or defending any such losses, claims, damages or
liabilities, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus Supplement or any amendment or supplement to the Prospectus
Supplement approved in writing by the Sellers or the omission or the alleged
omission to state therein a material fact necessary in order to make the
statements in the Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement approved in writing by the Sellers, in the light of the
circumstances under which they were made, not misleading, but only to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to the Sellers Information contained in the
Prospectus Supplement, (ii) any untrue statement or alleged untrue statement
of any material fact contained in the information on any computer tape
furnished to the Purchaser or any affiliate thereof by or on behalf of the
Seller containing information regarding the assets of the Trust or (iii) any
untrue statement or alleged untrue statement of any material fact contained in
any information provided by the Sellers to the Purchaser or any affiliate
thereof, or any material omission from the information purported to be
provided thereby, and disseminated to Deloitte & Touche LLP or prospective
investors (directly or indirectly through available information systems) in
connection with the issuance, marketing or offering of the Certificates. This
indemnity agreement will be in addition to any liability which the Sellers may
otherwise have.
(b) The Purchaser agrees to indemnify and hold harmless each Seller,
each of its officers, directors and each person or entity who controls such
Seller or any such person, against any and all losses, claims, damages or
liabilities, joint and several, to which such Seller, or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse that Seller for any legal or other expenses incurred by such Seller,
each such officer and director and such controlling person in connection with
investigating or defending any such losses, claims, damages or liabilities
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement or any
amendment or supplement to the Prospectus Supplement or the omission or the
alleged omission to state therein a material fact necessary in order to make
the statements in the Prospectus Supplement or any amendment or supplement to
the Prospectus Supplement, in the light of the circumstances under which they
were made, not misleading, but only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission relates to the
Purchaser Information contained in the Prospectus. This indemnity agreement
will be in addition to any liability which the Purchaser may otherwise have.
(c) Promptly after receipt by any indemnified party under this
Article V of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Article V, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Article V except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Article V.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Article V for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by
the indemnifying party in writing; (ii) such indemnified party shall have been
advised in writing by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is advisable for such indemnified party to employ separate counsel;
or (iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party, it being
understood, however, the indemnifying party shall not, in connection with any
one such action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in writing by the
Purchaser, if the indemnified parties under this Article V consist of the
Purchaser, or by the Sellers, if the indemnified parties under this Article V
consist of any Seller.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 5.01(a) and (b) hereof, shall use its best 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.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to consent to a settlement of any
action, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and the indemnifying party has not
previously provided the indemnified party with written notice of its objection
to such settlement. No indemnifying party shall effect any settlement of any
pending or threatened proceeding in respect of which an indemnified party is
or could have been a party and indemnity is or could have been sought
hereunder, without the written consent of such indemnified party, unless
settlement includes an unconditional release of such indemnified party from
all liability and claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Article is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Sellers, on the one hand, and the Purchaser, on the other,
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by
them and the Purchaser in such proportions as shall be appropriate to reflect
the relative benefits received by the Sellers on the one hand and the
Purchaser on the other from the sale of the Mortgage Loans such that the
Purchaser is responsible for the lesser of (i) 50% thereof and (ii) the
Structuring Fee and the Sellers shall be responsible for the balance;
provided, however, that 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. For purposes of this Section, each officer and director of
the Purchaser and each person, if any, who controls the Purchaser within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Purchaser and each director of a Seller, each officer of a
Seller, and each person, if any, who controls that Seller within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as the related Seller.
(e) The Sellers, severally and not jointly, agree to indemnify and
to hold each of the Purchaser and the Trustee, each of the officers and
directors of each such entity and each person or entity who controls each such
entity or person and each Certificateholder harmless against any and all
claims, losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, fees and expenses that the Purchaser, the
Trustee, or any such person or entity and any Certificateholder may sustain in
any way (i) related to the failure of a Seller to perform its duties in
compliance with the terms of this Agreement, (ii) arising from a breach by a
Seller of its representations and warranties in Section 3.01 or (iii) related
to the origination or prior servicing of the Mortgage Loans by reason of any
acts, omissions, or alleged acts or omissions of any Seller, the originator or
any servicer. Each Seller shall promptly notify the Purchaser, the Trustee and
each Certificateholder if a claim is made by a third party with respect to
this Agreement. The Sellers shall assume the defense of any such claim and pay
all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against the Purchaser and the Trustee or any such person or entity
and/or any Certificateholder in respect of such claim.
ARTICLE VI.
TERMINATION
Section 6.01. Termination. The respective obligations and responsibilities
of each Seller and the Purchaser created hereby shall terminate, except for the
Sellers' and Purchaser's indemnity obligations as provided herein, upon the
termination of the Trust as provided in Article X of the Pooling and Servicing
Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment. This Agreement may be amended from time to time
by the Sellers and the Purchaser by written agreement signed by the parties
hereto.
Section 7.02. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws (without regard to its material conflict of laws
rules).
Section 7.03. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, postage prepaid, addressed as
follows:
if to the Sellers:
[Name of Seller]
c/o Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: General Counsel
or such other address as may hereafter be furnished to the Purchaser in writing
by the Sellers.
if to the Purchaser:
Greenwich Capital Acceptance, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: General Counsel
or such other address as may hereafter be furnished to Fifth Third Bank in
writing by the Purchaser.
Section 7.04. Severability of Provisions. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, 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
of enforceability of the other provisions of this Agreement.
Section 7.05. Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts,
which may be transmitted by telecopier each of which, when so executed, shall
be deemed to be an original and such counterparts, together, shall constitute
one and the same agreement.
Section 7.06. Further Agreements. The parties hereto each agree to execute
and deliver to the other such additional documents, instruments or agreements
as may be necessary or reasonable and appropriate to effectuate the purposes of
this Agreement or in connection with the issuance of any Series of Certificates
representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Sellers,
each Seller will cooperate with the Purchaser in connection with the sale of
any of the securities representing interests in the Mortgage Loans. In that
connection, each Seller will provide to the Purchaser any and all information
and appropriate verification of information, whether through letters of its
auditors and counsel or otherwise, as the Purchaser shall reasonably request
and will provide to the Purchaser such additional representations and
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the related Seller as are
reasonably required in connection with such transactions and the offering of
investment grade securities rated by the Rating Agencies.
Section 7.07. Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and each Seller is selling, the
Related Mortgage Loans rather than pledging such Mortgage Loans to secure a
loan by the Purchaser to the applicable Sellers. Accordingly, the parties
hereto each intend to treat the transaction as a sale by each Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the
right to review the Mortgage Loans and the related Mortgage Files to determine
the characteristics of the Mortgage Loans which will affect the Federal income
tax consequences of owning the Mortgage Loans and each Seller will cooperate
with all reasonable requests made by the Purchaser in the course of such
review.
Section 7.08. Successors and Assigns: Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by
the Sellers, the Purchaser and the Trustee. The obligations of each Seller
under this Agreement cannot be assigned or delegated to a third party without
the consent of the Purchaser which consent shall be at the Purchaser's sole
discretion, except that the Purchaser acknowledges and agrees that each Seller
may assign its obligations hereunder to any Person into which such Seller is
merged or any corporation resulting from any merger, conversion or
consolidation to which such Seller is a party or any Person succeeding to the
business of such Seller. The parties hereto acknowledge that the Purchaser is
acquiring the Mortgage Loans for the purpose of contributing them to a trust
that will issue a Series of Certificates representing undivided interests in
such Mortgage Loans. As an inducement to the Purchaser to purchase the
Mortgage Loans, each Seller acknowledges and consents to the assignment by the
Purchaser to the Trustee of all of the Purchaser's rights against the related
Seller pursuant to this Agreement insofar as such rights relate to Mortgage
Loans transferred to the Trustee and to the enforcement or exercise of any
right or remedy against the applicable Seller pursuant to this Agreement by
the Trustee. Such enforcement of a right or remedy by the Trustee shall have
the same force and effect as if the right or remedy had been enforced or
exercised by the Purchaser directly.
Section 7.09. Survival. The representations and warranties set forth in
Sections 3.01 and 3.02 and the provisions of Article V hereof shall survive
the purchase of the Mortgage Loans hereunder.
<PAGE>
IN WITNESS WHEREOF, the Sellers, Fifth Third Bank and the Purchaser have
caused their names to be signed to this Mortgage Loan Purchase Agreement by
their respective officers thereunto duly authorized as of the day and year
first above written.
GREENWICH CAPITAL ACCEPTANCE, INC.,
as Purchaser
By: /s/ John Graham
______________________________________________
Name:
Title:
FIFTH THIRD BANK
By: /s/ James R. Hubbard
______________________________________________
Name:
Title:
FIFTH THIRD MORTGAGE COMPANY,
as Seller
By: /s/ Richard A. Bondle
______________________________________________
Name:
Title:
FIFTH THIRD BANK, CENTRAL OHIO,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, FLORIDA,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, INDIANA,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, KENTUCKY, INC.,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, NORTHERN KENTUCKY, INC,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, NORTHWESTERN, OHIO, N.A.,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, OHIO VALLEY,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
FIFTH THIRD BANK, SOUTHWEST, F.S.B.,
as Seller
By: /s/ Neal Arnold
______________________________________________
Name:
Title:
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the __ day of December, 1999 before me, a Notary Public in and for
said State, personally appeared _____________________, known to me to be a
____________ of GREENWICH CAPITAL ACCEPTANCE, INC., the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the __ day of December, 1999 before me, a Notary Public in and for
said State, personally appeared ______________________, known to me to be a
_______________ Fifth Third Bank, the company 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
<PAGE>
STATE OF )
)ss.:
COUNTY OF )
On the __ day of December, 1999 before me, a Notary Public in and for
said State, personally appeared ______________________, known to me to be a
_______________ of , the company 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
<PAGE>
EXHIBIT A
Representations and Warranties Relating to the Mortgage Loans
-------------------------------------------------------------
A. Each Seller hereby represents and warrants to the Depositor, the
Trustee, the Certificateholders and the Master Servicer, with respect to each
Mortgage Loan that is a Related Mortgage Loan as of the Closing Date (or in
the case of certain specified representations and warranties, as of the
applicable Cut-off Date) or as of such other date specifically provided herein
(except that with respect to any Qualified Substitute Mortgage Loan such
representations and warranties shall be as of the date of substitution and
made by the related Seller or Fifth Third Bank, whichever is making the
substitution), that:
(a) The information set forth in the Mortgage Loan Schedule relating
to the Mortgage Loan is complete, true and correct in all material respects as
of the applicable Cut-off Date;
(b) The Mortgage Note and the Mortgage are not assigned or pledged
by the Seller to a Person other than the Trust, and immediately prior to the
transfer of the Mortgage Loan from the Seller to the Depositor, the Seller had
good and marketable title thereto, and was the sole owner and holder of the
Mortgage Loan free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or security interests of
any nature (collectively, a "Lien"), other than any such Lien released
simultaneously with the sale contemplated herein, and had full right and
authority, subject to no interest or participation of, or agreement with, any
other party, to sell and assign the same pursuant to this Agreement, and
immediately upon the transfer and assignment of the Mortgage Loan as herein
contemplated, the Trustee shall have good title to, and will be the sole legal
owner of, the Mortgage Loan free and clear of any Lien;
(c) The Mortgage is a valid and existing lien on the property
therein described, and the Mortgaged Property is free and clear of all
encumbrances and liens having priority over the lien of the Mortgage, except
(i) liens for real estate taxes and special assessments not yet due and
payable and (ii) in the case of a Mortgaged Property that is a condominium or
an individual unit in a planned unit development, liens for common charges
permitted by statute. Any security agreement, chattel mortgage or equivalent
document related to the Mortgage and delivered to the Trustee establishes in
the Seller a valid and subsisting lien on the property described therein, and
the Seller has full right to sell and assign the same to the Trustee;
(d) The terms of the Mortgage Note and the Mortgage have not been
impaired, altered or modified in any respect which would have any adverse
effect on the Certificateholders, except by a written instrument which has
been recorded, if necessary to protect the interests of the
Certificateholders, and which has been delivered to the Trustee. The substance
of any such alteration or modification is reflected in the Mortgage Loan
Schedule;
(e) No instrument of release or waiver has been executed in
connection with the Mortgage Loan, and the Mortgagor has been released, in
whole or in part, except in connection with an assumption agreement which has
been approved by the primary mortgage guaranty insurer, if any, and which has
been delivered to the Trustee;
(f) As of the Cut-off Date, the Mortgagor is not in default in
complying with the terms of the Mortgage Note or the Mortgage and there exists
no event which, with the passage of time or notice or both, would constitute a
default thereunder, and the Seller has not waived any default, breach,
violation or event of acceleration except that the Seller may have accepted
late payments. At origination all taxes, governmental assessments, insurance
premiums, or water, sewer and municipal charges and rents under all ground
leases which previously became due and owing have been paid, and the Mortgage
Note and/or the related Mortgage obligate the Mortgagor to pay all similar
amounts as they become due. The Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required by
the Mortgage, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage proceeds, whichever is more recent, to
the day which precedes by one day the Due Date of the first installment of
principal and interest;
(g) There is no proceeding pending or, to the best of the Seller's
knowledge, threatened for the total or partial condemnation of the Mortgaged
Property, nor is such a proceeding currently occurring, and such property is
undamaged by waste, fire, water, earthquake or earth movement, windstorm,
flood, tornado, or otherwise, so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended;
(h) 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 Mortgaged Property which
are, or may be, liens prior or equal to, or coordinate with, the lien of the
Mortgage except those that are stated in the title insurance policy and for
which related losses are affirmatively insured against by such policy;
(i) All of the improvements that were included for the purpose of
determining the value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged Property
except those that are stated in the title insurance policy and for which
related losses are affirmatively insured against by such policy;
(j) [Reserved]
(k) To the Seller's knowledge, no improvement located on or being
part of the Mortgaged Property is in violation of any applicable zoning law or
regulation. To the Seller's knowledge, all inspections, licenses and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and occupancy
of the same, including, but not limited to, certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities and the Mortgaged Property is lawfully occupied under applicable
law;
(l) All parties that have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1) in
compliance with any and all licensing requirements of the United States and of
the laws of the state wherein the Mortgaged Property is located that are
applicable to such parties, and (2)(A) organized under the laws of such state,
or (B) qualified to do business in such state or exempt from such
qualification in a manner so as not to affect adversely the enforceability of
such Mortgage Loan, or (C) federal savings associations or national banks
having principal offices in such state, or (D) not doing business in such
state;
(m) As of the Cut-off Date, no Mortgage Loan was delinquent;
(n) The Mortgage File contains each of the documents and instruments
specified to be included therein duly executed and in due and proper form and
each such document or instrument is in a form generally acceptable to prudent
institutional mortgage lenders that regularly originate or purchase mortgage
loans comparable to the Mortgage Loans for sale to prudent investors in the
secondary market that invest in mortgage loans such as the Mortgage Loans;
(o) 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 such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
similar laws relating to or affecting the rights of creditors generally, and
by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law). All parties to the Mortgage
Note and the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage, and the Mortgage Note and Mortgage have been duly and properly
executed by such parties. The Mortgagor is a natural person who is a party to
the Mortgage Note and the Mortgage in an individual capacity, and not in the
capacity of a trustee or otherwise;
(p) Any and all requirements of any federal, state or local law,
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws, applicable to the Mortgage Loan have been complied with, and the Seller
has and shall maintain in its possession, available for the Trustee's
inspection, and shall deliver to the Trustee upon demand, evidence of
compliance with all such requirements;
(q) The proceeds of the Mortgage Loan have been fully disbursed,
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making, closing or recording the Mortgage
Loan were paid;
(r) [Reserved];
(s) The Mortgage Loan is covered by an ALTA mortgage title insurance
policy or such other form of policy acceptable to Fannie Mae or Freddie Mac,
issued by and constituting the valid and binding obligation of a title insurer
generally acceptable to prudent mortgage lenders, which regularly originate or
purchase mortgage loans comparable to the Mortgage Loans for sale to prudent
investors in the secondary market that invest in mortgage loans such as the
Mortgage Loans, and qualified to do business in the jurisdiction wherein the
Mortgaged Property is located, insuring 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 Seller is the sole payee of such
mortgage title insurance policy, the assignment to the Trustee of the Seller's
interest in such mortgage title insurance policy does not require the consent
of or notification to the insurer or the same has been obtained, and such
mortgage title insurance policy is in full force and effect and will be in
full force and effect and inure to the benefit of the Trustee upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such mortgage title insurance policy and no prior holder
of the related Mortgage, including the Seller, has done, by act or omission,
anything that would impair the coverage of such mortgage title insurance
policy;
(t) All improvements upon the Mortgaged Property are insured by an
insurer who meets Fannie Mae and/or Freddie Mac guidelines against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located pursuant to insurance
policies conforming to the requirements of Section 3.14 of the Pooling and
Servicing Agreement. If the Mortgaged Property was, at the time of origination
of the Related Mortgage Loan, in an area identified on a Flood Hazard Boundary
Map or Flood Hazard Rate Map issued by the Federal Emergency Management Agency
as having special flood hazards (and if the flood insurance policy referenced
herein has been made available), a flood insurance policy is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an
amount representing coverage described in Section 3.14 of the Pooling and
Servicing Agreement. All individual insurance policies (collectively, the
"hazard insurance policy") are the valid and binding obligation of the insurer
and contain a standard mortgagee clause naming the Seller, its successors and
assigns, as mortgagee. All premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(u) The Mortgage Loan is 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 or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(v) The Mortgage Loan was originated by the Seller in accordance
with the Seller's underwriting guidelines. The Mortgage Loan has not been
modified except as such modification may be reflected in the related Mortgage
File;
(w) The Mortgage Loan is a closed-end Mortgage Loan having an
original term of not more than 15 years to maturity (if a Group I Mortgage
Loan) or not more than 30 years to maturity (if a Group II Mortgage Loan). The
Mortgage Loan is payable in equal monthly installments of principal and
interest which would be sufficient, in the absence of late payments, to fully
amortize such loan within the term thereof, beginning no later than 60 days
after disbursement of the proceeds of the Mortgage Loan and bears a fixed
interest rate for the term of the Mortgage Loan;
(x) The Mortgage contains a customary provision for the acceleration
of the payment of the unpaid principal balance of the Mortgage Loan in the
event the related Mortgaged Property is sold without the prior consent of the
holder of the Mortgage;
(y) If the related Mortgagor represented that such Mortgagor would
occupy the related Mortgaged Property as such Mortgagor's primary residence,
the Seller has not received notice that such representation of the Mortgagor
is no longer true. The Mortgage Loan is not a construction loan. Each
Mortgaged Property is lawfully occupied under applicable law;
(z) The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(aa) The Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial or non-judicial foreclosure.
Other than applicable homestead provisions which may delay the realization
against the Mortgaged Property, or exemptions that may arise in the event a
petition under the Bankruptcy Code is filed with respect to the Mortgagor,
there is no homestead or other exemption available to the Mortgagor that would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;
(bb) If 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 such Mortgage, and no fees or expenses
are or will become payable by the Trustee or the Certificateholders to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor, which fees and expenses shall constitute
Servicing Advances;
(cc) The Mortgaged Property is located in the state identified in
the Mortgage Loan Schedule and consists of at least one parcel of real
property with a one-family residence erected thereon, a two- to four-family
dwelling or an individual condominium unit. The Mortgaged Property does not
consist of a residence or unit or a mobile home that is not permanently
affixed; provided, however, that it may be a pre-fabricated or manufactured
unit affixed to a permanent foundation. The Mortgaged Property is not a
multifamily Mortgaged Property. If the Mortgaged Property is subject to a
ground lease: (i) the current ground lessor has been identified and all ground
rents which have previously become due and owing have been paid, (ii) the
ground lease term extends, or is automatically renewable, for at least five
years beyond the maturity date of the Related Mortgage Loan, (iii) the ground
lease has been duly executed and recorded, (iv) the amount of the ground rent
and any increases therein are clearly identified in the lease and are for
predetermined amounts at predetermined times, (v) the ground rent payment is
included in the Mortgagor's monthly payment as an expense item, (vi) the Trust
has the right to cure defaults on the ground lease and (vii) the terms and
conditions of the leasehold do not prevent the free and absolute marketability
of such Mortgaged Property;
(dd) The Loan-to-Value Ratio of the Mortgage Loan at origination was
not more than 95.00%;
(ee) [Reserved];
(ff) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for repayment
thereof have not been made, and no escrow deposits or payments of other
charges or payments due the Seller have been capitalized under the Mortgage or
the related Mortgage Note;
(gg) The Mortgage Loan was not originated under a buydown plan;
(hh) Other than as provided by this Agreement, there is no
obligation with respect to the Mortgage Loan on the part of the Seller or any
other party to make payments in addition to those made by the Mortgagor;
(ii) Subject to the provisions of Section 2.01 of the Pooling and
Servicing Agreement, the Mortgage Note, the Mortgage, the Assignment of the
Mortgage and any other documents required to be delivered have been delivered
to the Trustee, or the Custodian on behalf of the Trustee. The Seller is in
possession of a complete Mortgage File, except those documents delivered to
the Trustee, or the Custodian on behalf of Trustee, and there are no custodial
agreements in effect adversely affecting the right or ability of the Seller to
make the document deliveries required hereby. The original Mortgage was
recorded, and all subsequent Assignments of the original Mortgage have been
recorded in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of the Seller
(subject to the provisions of Section 2.01 of the Pooling and Servicing
Agreement with respect to Mortgages and Assignments which are in the process
of being recorded);
(jj) The Mortgage Loan was not selected for inclusion under this
Agreement on any basis which was intended to have a material adverse effect on
the Certificateholders;
(kk) The Mortgage Loan has no shared appreciation or other
contingent interest feature;
(ll) [Reserved];
(mm) The Mortgage Rate for the Mortgage Loan was not greater than
8.125% or less than 5.750% if included in Loan Group I and not greater than
9.500% or less than 6.000% if included in Loan Group II;
(nn) [Reserved]
(oo) The Seller has caused or will cause to be performed any and all
acts required to be performed to preserve the rights and remedies of the
Trustee in any insurance policies applicable to the Mortgage Loan, including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of co-insured, joint loss
payee and mortgagee rights in favor of the Trustee;
(pp) All amounts due and received after the Cut-off Date (and all
amounts received on or before the Cut-off Date that are due after the Cut-off
Date) with respect to the Mortgage Loan to which the Seller is not entitled
are, as of the Closing Date, in the Collection Account;
(qq) Each Mortgage Loan conforms to the descriptions thereof to be
set forth in the Prospectus Supplement (subject to the variances specified
therein);
(rr) A full appraisal on forms approved by Fannie Mae or Freddie Mac
was performed in connection with the origination of the Related Mortgage Loan;
(ss) There is no indication in the Mortgage File that the Mortgaged
Property was, as of the Cut-off Date, located within a one-mile radius of any
site listed in the National Priorities List as defined under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
on any similar state list of hazardous waste sites which are known to contain
any hazardous substance or hazardous waste;
(tt) The Mortgage Loan is not subject to a bankruptcy plan;
(uu) [Reserved];
(vv) To the best of the Seller's knowledge, no statement, report or
other document constituting a part of the Mortgage File contains any material
untrue statement of fact or omits to state a fact necessary to make the
statements contained therein not misleading which would, either individually
or in the aggregate, have a material adverse effect on the Certificateholders;
no error or omission, misrepresentations, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of any
person, including, without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application for any insurance in relation to the
Mortgage Loan;
(ww) [Reserved];
(xx) The Mortgage Loan constitutes a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;
(yy) The Seller has the full authority to sell and transfer the
Mortgage Note and Mortgage and such transfer and sale will not impair the
enforceability of any Mortgage;
(zz) [Reserved];
(aaa) [Reserved];
(bbb) If the related Mortgaged Property is subject to a land trust
(a "Land Trust Mortgage"), (i) a trustee, duly qualified under applicable law
to serve as such, has been properly designated and currently so serves and is
named as such in the land trust agreement and such trustee is named in the
Land Trust Mortgage as Mortgagor; (ii) all fees and expenses of the land
trustee which have previously become due and owing have been paid and no fees
or expenses are or will become payable by the Certificateholders or the Trust
to the land trustee under the land trust agreement; (iii) the beneficiary is
solely obligated to pay any fees and expenses of the land trustee and the
priority of the lien of the Land Trust Mortgage is not and will not be primed
by the land trustee; (iv) the beneficiary is obligated to make payments under
the related promissory note and will have personal liability for deficiency
judgments; (v) the related Land Trust Mortgage together with each assignment
of beneficial interest relating thereto was made in compliance with the
related land trust agreement, was validly entered into by the related land
trustee or beneficiary and did not, does not currently, and will not in the
future, violate any provision of such land trust agreement or any agreement
between or among the beneficiaries of such land trust; (vi) the assignment of
the beneficial interest relating to such Land Trust Mortgage was accepted by,
and noted in the records of the respective land trust trustee, subsequent
assignments of such beneficial interest in whole or in part have not been
made, and such subsequent assignments of such beneficial interest or any part
thereof are not permitted pursuant to a written agreement between the
respective beneficiary and the related mortgagee, until the expiration of the
promissory note in such land trust; (vii) the Land Trust Mortgage is either
the first or second lien on the related Mortgaged Property; no liens are in
place against the beneficial interests, or any part thereof, of such Land
Trust Mortgage or collateral assignment of beneficial interest, which liens
are superior to the interest held by the Seller, and the beneficial interest,
or any part thereof, of any Land Trust Mortgage; (viii) the terms and
conditions of the land trust agreement do not prevent the free and absolute
marketability of the Mortgaged Property; and (ix) each Land Trust Mortgage
contains, and will contain, a "due-on-sale" provision permitting the mortgagee
under the Mortgage Note and Land Trust Mortgage to foreclose or otherwise
exercise remedies thereunder upon a transfer of the beneficial interest in the
related Mortgaged Property;
(ccc) The Mortgage Loan provides for the calculation of interest on
the basis of a 360-day year consisting of twelve 30-day months;
(ddd) The Mortgage Note does not provide for negative amortization;
(eee) [Reserved];
(fff) 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;
(ggg) The origination and collection practices used by the Seller
with respect to the Mortgage Note and Mortgage have been in all respects
legal, proper prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Master Servicer (directly
or through a subservicer) and any predecessor servicer in accordance with the
terms of the Mortgage Note. With respect to escrow deposits and Escrow
Payments, if any, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. No
escrow deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under any Mortgage or the related Mortgage Note;
(hhh) The Mortgaged Property is free of damage and waste and there
is no proceeding pending for the total or partial condemnation thereof;
(iii) If the Mortgage Loan is subject to the provisions of the
Homeownership and Equity Protection Act of 1994, P.L. 103-325, 108 Stat 2160,
it was originated in compliance therewith; and
(jjj) The Seller has not dealt with any broker or agent or other
Person who might be entitled to a fee, commission or compensation in
connection with the transaction contemplated by this Agreement other than the
Purchaser.
B. Fifth Third Bank represents to the Depositor, the Trustee, the
Certificateholders and the Master Servicer with respect to the Mortgage Loans
as of the Cut-off Date (or such other date as may be specified below) that:
(a) With respect to approximately 100.00% of the Mortgage Loans in
Loan Group I and with respect to approximately 99.77% of the Mortgage Loans in
Loan Group II (measured by Cut-off Date Principal Balances), at the time that
each such Mortgage Loan was originated the related Mortgagor represented that
such Mortgagor would occupy the related Mortgaged Property as such Mortgagor's
primary residence;
(b) With respect to the aggregate Cut-off Date Principal Balance of
all the Mortgage Loans in each Loan Group, (i) not more than 0.00% are secured
by real property improved by two-to four-family dwellings; (ii) not more than
2.65% with respect to Loan Group I and 1.64% with respect to Loan Group II are
secured by real property improved by individual condominium units; and (iii)
at least 97.35% with respect to Loan Group I and 98.36% with respect to Loan
Group II are secured by real property with a detached or attached
single-family residence erected thereon;
(c) The weighted average Loan-to-Value Ratio of the Mortgage Loans
in each Loan Group was approximately 68.14% with respect to Loan Group I and
73.25% with respect to Loan Group II;
(d) No more than 7.30% with respect to Loan Group I and 4.43% with
respect to Loan Group II of the aggregate Cut-off Date Principal Balance of
the Mortgage Loans in each Loan Group are secured by Mortgaged Properties
located within any single five-digit ZIP code area;
(e) The weighted average Mortgage Rate of the Mortgage Loans in each
Loan Group was approximately 6.885% with respect to Loan Group I and 7.228%
with respect to Loan Group II;
(f) As of the Closing Date, all the Mortgage Loans in the aggregate
conform to the descriptions thereof to be set forth in the Prospectus
Supplement (subject to the variances specified therein); and
(g) No Mortgage Loan is a "high cost mortgage" pursuant to Section
226.32 of the Truth-in-Lending Act, as amended.
C. It is understood and agreed that the representations and
warranties set forth in Section 2.04 of the Pooling and Servicing Agreement
shall survive delivery of the respective Mortgage Files to the Trustee (or the
Custodian on behalf of the Trustee) and shall inure to the benefit of the
Depositor, the Master Servicer, the Certificateholders and the Trustee,
notwithstanding any restrictive or qualified endorsement or assignment. Upon
discovery by any of the Sellers, Fifth Third Bank, the Depositor, the Master
Servicer or the Trustee of a breach of any of the foregoing representations
and warranties that materially and adversely affects the value of any Mortgage
Loan or the interests of the Certificateholders therein (without giving effect
to any qualification contained in such representation or warranty relating to
any Seller's knowledge), the party discovering such breach shall give prompt
written notice to the other parties, and in no event later than two Business
Days after the date of such discovery. It is understood and agreed that the
obligations of each Seller or of Fifth Third Bank, as the case may be, set
forth in Section 2.03(a) of the Pooling and Servicing Agreement to cure any
breach or to substitute for or repurchase a defective Mortgage Loan constitute
the sole remedies available to the Certificateholders, the Master Servicer and
the Trustee respecting a breach of the representations and warranties
contained in Section 2.04 of the Pooling and Servicing Agreement.
<PAGE>
SCHEDULE A
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD MORTGAGE COMPANY
------------------------------------------------------
<PAGE>
SCHEDULE B
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, CENTRAL OHIO
--------------------------------------------------------
<PAGE>
SCHEDULE C
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, FLORIDA
---------------------------------------------------
<PAGE>
SCHEDULE D
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, INDIANA
---------------------------------------------------
<PAGE>
SCHEDULE E
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, KENTUCKY, INC.
----------------------------------------------------------
<PAGE>
SCHEDULE F
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, NORTHERN KENTUCKY, INC.
-------------------------------------------------------------------
<PAGE>
SCHEDULE G
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, NORTHWESTERN, OHIO, N.A.
--------------------------------------------------------------------
<PAGE>
SCHEDULE H
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, OHIO VALLEY
-------------------------------------------------------
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE OF FIFTH THIRD BANK, SOUTHWEST, F.S.B.
