Document:

EXHIBIT 4.1
 

 

 

WACHOVIA MORTGAGE LOAN TRUST, LLC,

 

as Depositor,

 

[                                          
      ],

 

as Servicer,

 

and

 

[                                          
      ],

 

as Trustee

 

POOLING AND SERVICING AGREEMENT

 

Dated, [                ] [ ], 200  

 

_______________________

 

Mortgage Pass-Through Certificates

 

Series 200 -

 

 

 

 

TABLE OF CONTENTS

	
            Page
 

 

	
            PRELIMINARY STATEMENT
 	
            1
 
	
             
 	
             
 
	
            ARTICLE I      DEFINITIONS
 	
            3
 
	
             
 	
             
 
	
            Section 1.01.    Defined Terms
 	
            3
 
	
            Section 1.02.    Interest Calculations
 	
            24
 
	
             
 	
             
 
	
            ARTICLE II     CONVEYANCE OF MORTGAGE LOANS ORIGINAL ISSUANCE OF CERTIFICATES
 	
            25
 
	
             
 	
             
 
	
            Section 2.01.    Conveyance of Mortgage Loans
 	
            25
 
	
            Section 2.02.    Acceptance by the Trustee of the Mortgage Loans
 	
            28
 
	
            Section 2.03.    Representations, Warranties and Covenants of the Servicer
 	
            30
 
	
            Section 2.04.    Representations and Warranties of the Depositor as to the Mortgage 
          
                Loans
 	
            31
 
	
            Section 2.05.    Designation of Interests in the REMIC
 	
            38
 
	
            Section 2.06.    Designation of Start-up Day
 	
            38
 
	
            Section 2.07.    REMIC Certificate Maturity Date
 	
            38
 
	
            Section 2.08.    Execution and Delivery of Certificates
 	
            38
 
	
             
 	
             
 
	
            ARTICLE III   ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
 	
            39
 
	
             
 	
             
 
	
            Section 3.01.    Servicer to Service Mortgage Loans
 	
            39
 
	
            Section 3.02.    Subservicing; Enforcement of the Obligations of Servicer
 	
            40
 
	
            Section 3.03.    Fidelity Bond; Errors and Omissions Insurance
 	
            41
 
	
            Section 3.04.    Access to Certain Documentation
 	
            41
 
	
            Section 3.05.    Maintenance of Primary Mortgage Insurance Policy; Claims
 	
            41
 
	
            Section 3.06.    Rights of the Depositor and the Trustee in Respect of the Servicer
 	
            42
 
	
            Section 3.07.    Trustee to Act as Servicer
 	
            43
 
	
            Section 3.08.    Collection of Mortgage Loan Payments; Servicer Custodial Account; Certificate Account; and Upper-Tier Certificate Account
 	
            43
 
	
            Section 3.09.    Collection of Taxes, Assessments and Similar Items; Escrow Accounts
 	
            46
 
	
            Section 3.10.    Access to Certain Documentation and Information Regarding the Mortgage Loans
 	
            47
 
	
            Section 3.11.    Permitted Withdrawals from the Servicer Custodial Account; Certificate Account and Upper-Tier Certificate Account
 	
            48
 
	
            Section 3.12.    Maintenance of Hazard Insurance
 	
            49
 
	
            Section 3.13.    Enforcement of Due-On-Sale Clauses; Assumption Agreements
 	
            50
 
	
            Section 3.14.    Realization Upon Defaulted Mortgage Loans; REO Property
 	
            51
 
	
            Section 3.15.    Trustee to Cooperate; Release of Mortgage Files
 	
            54
 
	
            Section 3.16.    Documents, Records and Funds in Possession of the Servicer to be Held for the Trustee
 	
            55
 

 

 

 

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TABLE OF CONTENTS

(Cont’d)

 

	
            Page
 

 

 

 

 

	
            Section 3.17.    Servicing Compensation
 	
            56
 
	
            Section 3.18.    Annual Statement as to Compliance
 	
            56
 
	
            Section 3.19.    Annual Independent Public Accountants’ Servicing Statement; Financial Statements
 	
            56
 
	
            Section 3.20.    Advances
 	
            57
 
	
            Section 3.21.    Modifications, Waivers, Amendments and Consents
 	
            57
 
	
            Section 3.22.    Reports to the Securities and Exchange Commission
 	
            58
 
	
             
 	
             
 
	
            ARTICLE IV   SERVICER’S CERTIFICATE
 	
            59
 
	
             
 	
             
 
	
            Section 4.01.    Servicer’s Certificate
 	
            59
 
	
             
 	
             
 
	
            ARTICLE V    PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;  REMIC ADMINISTRATION
 	
            59
 
	
             
 	
             
 
	
            Section 5.01.    Distributions
 	
            59
 
	
            Section 5.02.    Priorities of Distributions
 	
            60
 
	
            Section 5.03.    Allocation of Losses
 	
            63
 
	
            Section 5.04.    Statements to Certificateholders
 	
            64
 
	
            Section 5.05.    Tax Returns and Reports to Certificateholders
 	
            67
 
	
            Section 5.06.    Tax Matters Person
 	
            67
 
	
            Section 5.07.    Rights of the Tax Matters Person in Respect of the Trustee
 	
            68
 
	
            Section 5.08.    REMIC Related Covenants
 	
            68
 
	
            Section 5.09.    Determination of LIBOR
 	
            69
 
	
             
 	
             
 
	
            ARTICLE VI   THE CERTIFICATES
 	
            69
 
	
             
 	
             
 
	
            Section 6.01.    The Certificates
 	
            69
 
	
            Section 6.02.    Registration of Transfer and Exchange of Certificates
 	
            70
 
	
            Section 6.03.    Mutilated, Destroyed, Lost or Stolen Certificates
 	
            74
 
	
            Section 6.04.    Persons Deemed Owners
 	
            75
 
	
             
 	
             
 
	
            ARTICLE VII   THE DEPOSITOR AND THE SERVICER
 	
            75
 
	
             
 	
             
 
	
            Section 7.01.    Respective Liabilities of the Depositor and the Servicer
 	
            75
 
	
            Section 7.02.    Merger or Consolidation of the Depositor or the Servicer
 	
            75
 
	
            Section 7.03.    Limitation on Liability of the Depositor, the Servicer and Others
 	
            75
 
	
            Section 7.04.    Depositor and Servicer Not to Resign
 	
            76
 
	
             
 	
             
 
	
            ARTICLE VIII               DEFAULT
 	
            76
 
	
             
 	
             
 
	
            Section 8.01.    Events of Default
 	
            76
 
	
            Section 8.02.    Remedies of Trustee
 	
            78
 
	
            Section 8.03.    Directions by Certificateholders and Duties of Trustee During Event of Default
 	
            78
 
	
            Section 8.04.    Action upon Certain Failures of the Servicer and upon Event of Default
 	
            79
 
	
            Section 8.05.    Trustee to Act; Appointment of Successor
 	
            79
 
	
            Section 8.06.    Notification to Certificateholders
 	
            80
 

 

 

 

- ii -

 

TABLE OF CONTENTS

(Cont’d)

 

	
            Page
 

 

 

 

 

	
             
 	
             
 
	
            ARTICLE IX   THE TRUSTEE
 	
            80
 
	
             
 	
             
 
	
            Section 9.01.    Duties of Trustee
 	
            80
 
	
            Section 9.02.    Certain Matters Affecting the Trustee
 	
            81
 
	
            Section 9.03.    Trustee Not Liable for Certificates or Mortgage Loans
 	
            82
 
	
            Section 9.04.    Trustee May Own Certificates
 	
            83
 
	
            Section 9.05.    Eligibility Requirements for Trustee
 	
            83
 
	
            Section 9.06.    Resignation and Removal of Trustee
 	
            84
 
	
            Section 9.07.    Successor Trustee
 	
            84
 
	
            Section 9.08.    Merger or Consolidation of Trustee
 	
            85
 
	
            Section 9.09.    Appointment of Co-Trustee or Separate Trustee
 	
            85
 
	
            Section 9.10.    Authenticating Agents
 	
            86
 
	
            Section 9.11.    Trustee’s Fees and Expenses
 	
            87
 
	
            Section 9.12.    Appointment of Custodian
 	
            87
 
	
            Section 9.13.    Paying Agents
 	
            88
 
	
            Section 9.14.    Limitation of Liability
 	
            88
 
	
            Section 9.15.    Trustee May Enforce Claims Without Possession of Certificates
 	
            89
 
	
            Section 9.16.    Suits for Enforcement
 	
            89
 
	
            Section 9.17.    Waiver of Bond Requirement
 	
            89
 
	
            Section 9.18.    Waiver of Inventory, Accounting and Appraisal Requirement
 	
            89
 
	
             
 	
             
 
	
            ARTICLE X    TERMINATION
 	
            89
 
	
             
 	
             
 
	
            Section 10.01. Termination upon Purchase by the Depositor or Liquidation of All Mortgage Loans
 	
            89
 
	
            Section 10.02. Additional Termination Requirements
 	
            91
 
	
             
 	
             
 
	
            ARTICLE XI   MISCELLANEOUS PROVISIONS
 	
            92
 
	
             
 	
             
 
	
            Section 11.01. Amendment
 	
            92
 

	
            Section 11.02. Recordation of Agreement
 	
            93
 
	
            Section 11.03. Limitation on Rights of Certificateholders
 	
            93
 
	
            Section 11.04. Governing Law
 	
            94
 
	
            Section 11.05. Notices
 	
            94
 
	
            Section 11.06. Severability of Provisions
 	
            95
 
	
            Section 11.07. Certificates Nonassessable and Fully Paid
 	
            95
 
	
            Section 11.08. Access to List of Certificateholders
 	
            95
 
	
            Section 11.09. Recharacterization
 	
            95
 

 

 

 

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TABLE OF CONTENTS

(Cont’d)

 

 

 

EXHIBITS

	
            Exhibit A-1
 	
            -
 	
            Form of Face of Class A-1 Certificate
 	
             

	
            Exhibit A-2
 	
            -
 	
            Form of Face of Class A-2 Certificate
 	
             

	
            Exhibit A-3
 	
            -
 	
            Form of Face of Class A-3 Certificate
 	
             

	
            Exhibit A-4
 	
            -
 	
            Form of Face of Class A-4 Certificate
 	
             

	
            Exhibit A-5
 	
            -
 	
            Form of Face of Class A-5 Certificate
 	
             

	
            Exhibit A-6
 	
            -
 	
            Form of Face of Class A-6 Certificate
 	
             

	
            Exhibit A-WIO
 	
            -
 	
            Form of Face of Class A-WIO Certificate
 	
             

	
            Exhibit A-PO
 	
            -
 	
            Form of Face of Class A-PO Certificate
 	
             

	
            Exhibit A-R
 	
            -
 	
            Form of Face of Class A-R Certificate
 	
             

	
            Exhibit A-LR
 	
            -
 	
            Form of Face of Class A-LR Certificate
 	
             

	
            Exhibit B-1
 	
            -
 	
            Form of Face of Class B-1 Certificate
 	
             

	
            Exhibit B-2
 	
            -
 	
            Form of Face of Class B-2 Certificate
 	
             

	
            Exhibit B-3
 	
            -
 	
            Form of Face of Class B-3 Certificate
 	
             

	
            Exhibit B-4
 	
            -
 	
            Form of Face of Class B-4 Certificate
 	
             

	
            Exhibit B-5
 	
            -
 	
            Form of Face of Class B-5 Certificate
 	
             

	
            Exhibit B-6
 	
            -
 	
            Form of Face of Class B-6 Certificate
 	
             

	
            Exhibit C
 	
            Form of Reverse of all Certificates
 	
            C-1
 
	
            Exhibit D
 	
            Mortgage Loan Schedule
 	
            D-1
 
	
            Exhibit E
 	
            Request for Release of Documents
 	
            E-1
 
	
            Exhibit F
 	
            Form of Certification of Establishment of Account
 	
            F-1
 
	
            Exhibit G-1
 	
            Form of Transferor’s Certificate
 	
            G-1-1
 
	
            Exhibit G-2A
 	
            Form 1 of Transferee’s Certificate
 	
            G-2A-1
 
	
            Exhibit G-2B
 	
            Form 2 of Transferee’s Certificate
 	
            G-2B-1
 
	
            Exhibit H
 	
            Form of Transferee Representation Letter
 	
             

	
             
	
            for ERISA Restricted Certificates
 	
            H-1
 
	
            Exhibit I
 	
            Form of Affidavit Regarding Transfer of Residual Certificates
 	
            I-1
 
	
            Exhibit J
 	
            Contents of Servicing File
 	
            J-1
 
	
            Exhibit K
 	
            Form of Special Servicing Agreement
 	
            K-1
 
	
            Exhibit L
 	
            List of Recordation States
 	
            L-1
 
	
            Exhibit M
 	
            Principal Balance Schedules
 	
            M-1
 

- ii -

 

 

 

POOLING AND SERVICING AGREEMENT

THIS POOLING AND SERVICING AGREEMENT, dated [          ] [  ], 200 is hereby executed by and among WACHOVIA MORTGAGE LOAN TRUST, LLC, as depositor (together with its permitted successors and assigns, the “Depositor”), [          ], as servicer (together with its permitted successors and assigns, the “Servicer”), and[          ], as trustee (together with its permitted successors and assigns, the “Trustee”).

W I T N E S S E T H  T H A T:

In consideration of the mutual agreements herein contained, the Depositor, the Servicer and the Trustee agree as follows:

PRELIMINARY STATEMENT

In exchange for the Certificates, the Depositor hereby conveys the Trust Estate to the Trustee to create the Trust.  The Trust Estate for federal income tax purposes will be treated as two separate real estate mortgage investment conduits (the “Upper-Tier REMIC” and the “Lower-Tier REMIC,” respectively, and each, a “REMIC”).  The Class A Certificates (other than the Class A-R and Class A-LR Certificates) and the Class B Certificates are referred to collectively as the “Regular Certificates” and shall constitute “regular interests” in the Upper-Tier REMIC. The Uncertificated Lower-Tier Interests shall constitute the “regular interests” in the
Lower-Tier REMIC.  The Class A-R Certificate shall be the “residual interest” in the Upper-Tier REMIC and the Class A-LR Certificate shall be the “residual interest” in the Lower-Tier REMIC.  The Certificates will represent the entire beneficial ownership interest in the Trust.  The “latest possible maturity date” for federal income tax purposes of all interests created hereby will be the REMIC Certificate Maturity Date.

The following table sets forth characteristics of the Certificates, together with the minimum denominations and integral multiples in excess thereof in which the Classes of Certificates shall be issuable (except that one Certificate of each Class of Certificates may be issued in any amount in excess of the minimum denomination):

 

- 1 -

 

 

 

 

 

	
            Classes
 	
            Initial Class Certificate Balance or Notional Amount
 	
            Pass-Through Rate
 	
            Minimum
 Denomination
 	
            Integral Multiples
 In Excess
 Of Minimum
 
	
            Class A-1
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class A-2
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class A-3
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class A-4
 	
            $
 	
            (1)
 	
            $
 	
            $
 
	
            Class A-5
 	
            $
 	
            (2)
 	
            $
 	
            $
 
	
            Class A-6
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class A-PO
 	
            $
 	
            (4)
 	
            $
 	
            $
 
	
            Class A-WIO
 	
            $
 	
            (3)
 	
            $
 	
            $
 
	
            Class A-R
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class A-LR
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class B-1
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class B-2
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class B-3
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class B-4
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class B-5
 	
            $
 	
            %
 	
            $
 	
            $
 
	
            Class B-6
 	
            $
 	
            %
 	
            $
 	
            $
 

_______________

 

(1)               During the initial Interest Accrual Period, interest will accrue on the Class A-4 Certificates at a rate of % per annum.  During each Interest Accrual Period thereafter, interest will accrue on the Class A-4 Certificates at a per annum rate equal to (i) % plus (ii) LIBOR, subject to a minimum rate of % and a maximum rate of %.

(2)               During the initial Interest Accrual Period, interest will accrue on the Class A-5 Certificates at a rate of % per annum.  During each Interest Accrual Period thereafter, interest will accrue on the Class A-5 Certificates at a per annum rate equal to (i) % minus (ii) LIBOR, subject to a minimum rate of % and a maximum rate of %.

(3)               Interest will accrue on the Class A-WIO Notional Amount as of any Distribution Date at a per annum rate equal to (i) the weighted average of the Net Mortgage Interest Rates of the Premium Mortgage Loans (based on the Stated Principal Balance of the Premium Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date minus (ii) %.

	
            (4)
 	
            Class A-PO Certificates will be Principal Only Certificates and will not bear interest.
 

 

 

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ARTICLE I

 

DEFINITIONS

Section 1.01.  Defined Terms.  Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article:

1933 Act:  The Securities Act of 1933, as amended.

Accrued Certificate Interest:  For any Distribution Date and each interest-bearing Class, one month’s interest accrued during the related Interest Accrual Period at the applicable Pass-Through Rate on the applicable Class Certificate Balance or Notional Amount, as applicable.

Adjusted Pool Amount:  With respect to any Distribution Date, the Cut-Off Date Pool Principal Balance of the Mortgage Loans minus the sum of (i) all amounts in respect of principal received in respect of the Mortgage Loans (including, without limitation, amounts received as Monthly Payments, Periodic Advances, Principal Prepayments, Liquidation Proceeds and Substitution Adjustment Amounts) and distributed to Holders of Certificates on such Distribution Date and all prior Distribution Dates and (ii) the principal portion of all Realized Losses (other than Debt Service Reductions) incurred on the Mortgage Loans from the Cut-Off Date through the end of the month preceding such Distribution Date.

Adjusted Pool Amount (PO Portion):  With respect to any Distribution Date, the sum of the amounts, calculated as follows, with respect to all Outstanding Mortgage Loans:  the product of (i) the PO Percentage for each such Mortgage Loan and (ii) the remainder of (A) the Cut-Off Date Principal Balance of such Mortgage Loan minus (B) the sum of (x) all amounts in respect of principal received in respect of such Mortgage Loan (including, without limitation, amounts received as Monthly Payments, Periodic Advances, Principal Prepayments, Liquidation Proceeds and Substitution Adjustment Amounts) and distributed to Holders of the Certificates on such Distribution Date and all prior Distribution Dates and (y) the principal portion of any Realized Loss (other than a Debt Service Reduction) incurred on such Mortgage Loan from the Cut-Off Date through the end of the month
preceding such Distribution Date.

Advance:  A Periodic Advance or a Servicing Advance.

Agreement:  This Pooling and Servicing Agreement together with all amendments hereof and supplements hereto.

Amount Held for Future Distribution:  As to any Distribution Date, the total of the amounts held in the Servicer Custodial Account at the close of business on the preceding Determination Date on account of (i) Principal Prepayments and Liquidation Proceeds received or made in the month of such Distribution Date and (ii) payments which represent receipt of Monthly Payments in respect of a Due Date or Due Dates subsequent to the related Due Date.

Appraised Value:  With respect to any Mortgaged Property, either (i) the lesser of (a) the appraised value determined in an appraisal obtained by the originator at origination of 

 

 

-3-

 

 

 

such Mortgage Loan and (b) the sales price for such property, except that, in the case of Mortgage Loans the proceeds of which were used to refinance an existing mortgage loan, the Appraised Value of the related Mortgaged Property is the appraised value thereof determined in an appraisal obtained at the time of refinancing, or (ii) the appraised value determined in an appraisal made at the request of a Mortgagor subsequent to origination in order to eliminate the Mortgagor’s obligation to keep a Primary Insurance Policy in force.

Assignment of Mortgage:  An individual assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to give record notice of the sale of the Mortgage.

Authenticating Agents:  As defined in Section 9.10.

Book-Entry Certificate:  All Classes of Certificates other than the Physical Certificates.

Business Day:  Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of North Carolina, the State of New York, the state in which the servicing offices of the Servicer is located or the state in which the Corporate Trust Office is located are required or authorized by law or executive order to be closed.

Certificate:  Any of the Wachovia Mortgage Loan Trust, LLC Mortgage Pass-Through Certificates, Series 200  -   that are issued pursuant to this Agreement.

Certificate Account:  The separate Eligible Account created and maintained by the Trustee pursuant to Section 3.08(c) in the name of the Trustee for the benefit of the Certificateholders and designated “     , in trust for registered holders of Wachovia Mortgage Loan Trust, LLC Mortgage Pass-Through Certificates, Series 200  -  .”  Funds in the Certificate Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Certificate Balance:  With respect to any Certificate at any date, the maximum dollar amount of principal to which the Holder thereof is then entitled hereunder, such amount being equal to the product of the Percentage Interest of such Certificate and the Class Certificate Balance of the Class of Certificates of which such Certificate is a part.

Certificate Custodian:  Initially,      ; thereafter any other Certificate Custodian acceptable to the Depository and selected by the Trustee.

Certificate Owner:  With respect to a Book-Entry Certificate, the Person who is the beneficial owner of a Book-Entry Certificate.  With respect to any Definitive Certificate, the Certificateholder of such Certificate.

Certificate Register:  The register maintained pursuant to Section 6.02.

Certificate Registrar:  The registrar appointed pursuant to Section 6.02.

 

 

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Certificateholder:  The Person in whose name a Certificate is registered in the Certificate Register, except that, solely for the purpose of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor, the Servicer or any affiliate thereof shall be deemed not to be outstanding and the Percentage Interest and Voting Rights evidenced thereby shall not be taken into account in determining whether the requisite amount of Percentage Interests or Voting Rights, as the case may be, necessary to effect any such consent has been obtained, unless such entity is the registered owner of the entire Class of Certificates, provided that the Trustee shall not be responsible for knowing that any Certificate is registered in the name of such an affiliate unless one of its Responsible Officers has actual knowledge.

Class:  As to the Certificates, the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-PO, Class A-WIO, Class A-R, Class A-LR, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, as the case may be.

Class A Certificates:  The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-PO, Class A-WIO, Class A-R and Class A-LR Certificates.

Class A-5 Notional Amount:  As to any Distribution Date and the Class A-5 Certificates, the Class Certificate Balance of the Class A-4 Certificates.

Class A-PO Deferred Amount:  As to any Distribution Date prior to the Senior Credit Support Depletion Date, the aggregate of the applicable PO Percentage of each Realized Loss to be allocated to the Class A-PO Certificates on such Distribution Date or previously allocated to the Class A-PO Certificates and not yet paid to the Holders of the Class A-PO Certificates pursuant to Section 5.02(a)(iii) and the amount (without duplication) of any reduction in the Class Certificate Balance of the Class A-PO Certificates pursuant to Section 5.03(b).

Class A-WIO Notional Amount: As to any Distribution Date and the Class A-WIO Certificates, the aggregate Stated Principal Balances of the Premium Mortgage Loans on the Due Date in the month preceding the month of such Distribution.

Class B Certificates:  The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

Class Certificate Balance:  With respect to any Class (other than the Class A-5 and Class A-WIO Certificates) and any date of determination, the Initial Class Certificate Balance of such Class minus the sum of (i) all distributions of principal made with respect thereto, (ii) all Realized Losses allocated thereto pursuant to Section 5.03(a), and (iii) all other reductions in Class Certificate Balance previously allocated thereto pursuant to Section 5.03(b).  The Class A-5 and Class A-WIO Certificates are Interest-Only Certificates and have no Class Certificate Balance.

Class Interest Shortfall:  For any Distribution Date and each interest-bearing Class, the amount by which Accrued Certificate Interest for such Class (as reduced pursuant to Section 5.02(c)) exceeds the amount of interest actually distributed on such Class on such Distribution Date pursuant to clause (i) of the definition of “Interest Distribution Amount.”

 

 

-5-

 

 

 

Class Unpaid Interest Shortfall:  As to any Distribution Date and each interest-bearing Class, the amount by which the aggregate Class Interest Shortfalls for such Class on prior Distribution Dates exceeds the amount of interest actually distributed on such Class on such prior Distribution Dates pursuant to clause (ii) of the definition of “Interest Distribution Amount.”

	
            Closing Date:             , 200 .
 	
            
 

Code:  The Internal Revenue Code of 1986, as amended.

Compensating Interest:  As defined in Section 3.17.

Co-op Shares:  Shares issued by private non-profit housing corporations.

Corporate Trust Office:  The principal office of the Trustee at which at any particular time its certificate transfer services are conducted, which office at the date of the execution of this instrument is located at      ,      ,      , Attention:       .

Corresponding Upper-Tier Class or Classes:  As to the following Uncertificated Lower-Tier Interests, the Corresponding Upper-Tier Class or Classes, as follows:

	
            Uncertificated Lower-Tier Interest
  	
            Corresponding Upper-Tier Class or Classes
  
	
            Class A-L1 Interest
 	
            Class A-1 Certificates, Class A-2 Certificates and Class A-6 Certificates
 
	
            Class A-L3 Interest
 	
            Class A-3 Certificates 
 
	
            Class A-L4 Interest
 	
            Class A-4 Certificates and Class A-5 Certificates 
 
	
            Class A-LPO Interest
 	
            Class A-PO Certificates
 
	
            Class A-LUR Interest
 	
            Class A-R Certificate
 
	
            Class A-LWIO Interest
 	
            Class A-WIO Certificates
 
	
            Class B-L1 Interest
 	
            Class B-1 Certificates
 
	
            Class B-L2 Interest
 	
            Class B-2 Certificates
 
	
            Class B-L3 Interest
 	
            Class B-3 Certificates
 
	
            Class B-L4 Interest
 	
            Class B-4 Certificates
 
	
            Class B-L5 Interest
 	
            Class B-5 Certificates
 
	
            Class B-L6 Interest
 	
            Class B-6 Certificates
 

Custodian:  Initially, the Trustee, and thereafter the Custodian, if any, hereafter appointed by the Trustee pursuant to Section 9.12. The Custodian may (but need not) be the Trustee or any Person directly or indirectly controlling or controlled by or under common control of either of them. Neither the Servicer nor the Depositor, nor any Person directly or indirectly controlling or controlled by or under common control with any such Person may be appointed Custodian.

 

 

-6-

 

 

 

Customary Servicing Procedures:  With respect to the Servicer, procedures (including collection procedures) that the Servicer customarily employs and exercises in servicing and administering mortgage loans for its own account and which are in accordance with accepted mortgage servicing practices of prudent lending institutions servicing mortgage loans of the same type as the Mortgage Loans in the jurisdictions in which the related Mortgaged Properties are located.

	
            Cut-Off Date:              , 200  .
 	
            
 

Cut-Off Date Pool Principal Balance:  The aggregate of the Cut-Off Date Principal Balances of the Mortgage Loans which is $     .

Cut-Off Date Principal Balance:  As to any Mortgage Loan, the unpaid principal balance thereof as of the close of business on the Cut-Off Date, reduced by all installments of principal due on or prior thereto whether or not paid.

Debt Service Reduction:  As to any Mortgage Loan and any Determination Date, the excess of (i) the Monthly Payment due on the related Due Date under the terms of such Mortgage Loan over (ii) the amount of the monthly payment of principal and/or interest required to be paid with respect to such Due Date by the Mortgagor as established by a court of competent jurisdiction (pursuant to an order which has become final and nonappealable) as a result of a proceeding initiated by or against the related Mortgagor under the Bankruptcy Code, as amended from time to time (11 U.S.C.); provided that no such excess shall be considered a Debt Service Reduction so long as (a) the Servicer is pursuing an appeal of the court order giving rise to any such modification and (b)(1) such Mortgage Loan is not in default with respect to
payment due thereunder in accordance with the terms of such Mortgage Loan as in effect on the Cut-Off Date or (2) Monthly Payments are being advanced by the Servicer in accordance with the terms of such Mortgage Loan as in effect on the Cut-Off Date.

Debt Service Reduction Mortgage Loan:  Any Mortgage Loan that became the subject of a Debt Service Reduction.

Defective Mortgage Loan:  Any Mortgage Loan which is required to be cured, repurchased or substituted for pursuant to Sections 2.02 or 2.04.

Deficient Valuation:  As to any Mortgage Loan and any Determination Date, the excess of (i) the then outstanding indebtedness under such Mortgage Loan over (ii) the secured valuation thereof established by a court of competent jurisdiction (pursuant to an order which has become final and nonappealable) as a result of a proceeding initiated by or against the related Mortgagor under the Bankruptcy Code, as amended from time to time (11 U.S.C.), pursuant to which such Mortgagor retained such Mortgaged Property; provided that no such excess shall be considered a Deficient Valuation so long as (a) the Servicer is pursuing an appeal of the court order giving rise to any such modification and (b)(1) such Mortgage Loan is not in default with respect to payments due thereunder in accordance with the terms of such Mortgage
Loan as in effect on the Cut-Off Date or (2) Monthly Payments are being advanced by the Servicer in accordance with the terms of such Mortgage Loan as in effect on the Cut-Off Date.

 

 

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Deficient Valuation Mortgage Loan:  Any Mortgage Loan that became the subject of a Deficient Valuation.

Definitive Certificates:  As defined in Section 6.02(c)(iii).

Depositor:  Wachovia Mortgage Loan Trust, LLC, a Delaware limited liability company, or its successor in interest, as depositor of the Trust Estate.

Depository:  The Depository Trust Company, the nominee of which is Cede & Co., as the registered Holder of the Book-Entry Certificates or any successor thereto appointed in accordance with this Agreement.  The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York.

Depository Participant:  A broker, dealer, bank or other financial institution or other Person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository.

Determination Date:  As to any Distribution Date, the 16th day of the month of the related Distribution Date or, if such 16th day is not a Business Day, the Business Day immediately preceding such 16th day.

Discount Mortgage Loan:  Any Mortgage Loan with a Net Mortgage Interest Rate that is less than      % per annum.

Distribution Date:  The   th day of each month beginning in       200   (or, if such day is not a Business Day, the next Business Day).

Due Date:  As to any Distribution Date and each Mortgage Loan, the first day in the calendar month of such Distribution Date.

Eligible Account:  Any of (i) an account or accounts maintained with (a)      , or (b) a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the debt obligations of such holding company) have the highest short-term ratings of each Rating Agency at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC (to the limits established by the FDIC) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the Certificateholders have a claim
with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company, acting in its fiduciary capacity or (iv) any other account acceptable to each Rating Agency.  Eligible Accounts may bear interest and may include, if otherwise qualified under this definition, accounts maintained with the Trustee.

 

 

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ERISA:  The Employee Retirement Income Security Act of 1974, as amended.

ERISA Restricted Certificates:  Any Class B-4, Class B-5, or Class B-6 Certificate.

Escrow Account:  As defined in Section 3.09.

Escrow Payments:  The amounts constituting taxes, assessments, Primary Insurance Policy premiums, fire and hazard insurance premiums and other payments as may be required to be escrowed by the Mortgagor with the mortgagee pursuant to the terms of any Mortgage Note or Mortgage.

Event of Default:  As defined in Section 8.01.

Excess Proceeds:  With respect to any Liquidated Mortgage Loan, the amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage Loan received in the calendar month in which such Mortgage Loan became a Liquidated Mortgage Loan, net of any amounts previously reimbursed to the Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan pursuant to Section 3.11(a)(iii), exceeds (i) the unpaid principal balance of such Liquidated Mortgage Loan as of the Due Date in the month in which such Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at the Mortgage Interest Rate from the Due Date as to which interest was last paid or for which a Periodic Advance was made (and not reimbursed) up to the Due Date applicable to the Distribution Date immediately following the calendar month during which such liquidation occurred.

FDIC:  The Federal Deposit Insurance Corporation, or any successor thereto.

FHLMC:  The Federal Home Loan Mortgage Corporation, or any successor thereto.

Final Distribution Date:  The Distribution Date on which the final distribution in respect of the Certificates will be made pursuant to Section 10.01.

Financial Market Service:  Bloomberg Financial Service and any other financial information provider designated by the Depositor by written notice to the Trustee.

FIRREA:  The Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

[Fitch:  Fitch Ratings, and its successors in interest.]

FNMA:  Fannie Mae, or any successor thereto.

Fractional Interest:  As defined in Section 5.02(d).

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Holder:  A Certificateholder.

Independent:  When used with respect to any specified Person means such a Person who (i) is in fact independent of the Depositor and the Servicer, (ii) does not have any direct financial interest or any material indirect financial interest in the Depositor or the Servicer or in an affiliate of either of them, and (iii) is not connected with the Depositor or the Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Initial Class Certificate Balance:  As to each Class of Certificates (other than the Class A-5 and Class A-WIO Certificates), the Class Certificate Balance set forth in the Preliminary Statement.  The Class A-5 and Class A-WIO Certificates are Interest-Only Certificates and have no Initial Class Certificate Balance.

Initial Notional Amount: As to each Class of Interest-Only Certificates, the Notional Amount set forth in the Preliminary Statement.

Insurance Policy:  With respect to any Mortgage Loan included in the Trust Estate, any related insurance policy, including all riders and endorsements thereto in effect, including any replacement policy or policies for any Insurance Policies.

Insurance Proceeds:  Proceeds paid by an insurer pursuant to any Insurance Policy, in each case other than any amount included in such Insurance Proceeds in respect of Insured Expenses.

Insured Expenses:  Expenses covered by an Insurance Policy or any other insurance policy with respect to the Mortgage Loans.

Interest Accrual Period:  As to any Distribution Date and each Class of Certificates (other than the Class A-4, Class A-5 and A-PO Certificates), the period from and including the first day of the calendar month preceding the calendar month of such Distribution Date to but not including the first day of the calendar month of such Distribution Date. As to any Distribution Date and the Class A-4 and Class A-5 Certificates, the period from and including the         day of the calendar month preceding the calendar month in which such Distribution Date occurs and ending on the         day of the calendar month in which such Distribution Date occurs.

Interest Distribution Amount:  For any Distribution Date and each interest-bearing Class, the sum of (i) the Accrued Certificate Interest, subject to reduction pursuant to Section 5.02(c) and (ii) any Class Unpaid Interest Shortfall for such Class.

Interest-Only Certificates:  Any Class of Certificates entitled to distributions of interest, but no distributions of principal.  The Class A-5 and Class A-WIO Certificates are the only Classes of Interest-Only Certificates.

LIBOR:  As to any Distribution Date, the arithmetic mean of the London Interbank offered rate quotations for one-month U.S. Dollar deposits, as determined by the Trustee in accordance with Section 5.09.

 

 

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LIBOR Business Day:  Any Business Day on which banks are open for dealing in foreign currency and exchange in London, England, the City of New York and the State where the Corporate Trust Office is located.

LIBOR Certificates:  Any of the Class A-4 and Class A-5 Certificates.

Liquidated Mortgage Loan:  With respect to any Distribution Date, a defaulted Mortgage Loan (including any REO Property) that was liquidated in the calendar month preceding the month of such Distribution Date and as to which the Servicer has certified (in accordance with this Agreement) that it has received all proceeds it expects to receive in connection with the liquidation of such Mortgage Loan including the final disposition of an REO Property.

Liquidation Proceeds:  Amounts, including Insurance Proceeds, received in connection with the partial or complete liquidation of defaulted Mortgage Loans, whether through trustee’s sale, foreclosure sale or otherwise or amounts received in connection with any condemnation or partial release of a Mortgaged Property and any other proceeds received in connection with an REO Property, less the sum of related unreimbursed Servicing Fees and Advances.

Loan-to-Value Ratio:  With respect to any Mortgage Loan and any date of determination, the fraction, expressed as a percentage, the numerator of which is the outstanding principal balance of the related Mortgage Loan at the date of determination and the denominator of which is the Appraised Value of the related Mortgaged Property.

Lower-Tier Distribution Amount:  As defined in Section 5.02(a).

Lower-Tier REMIC:  As defined in the Preliminary Statement, the assets of which consist of the Mortgage Loans, such amounts as shall from time to time be held in the Certificate Account, the insurance policies, if any, relating to a Mortgage Loan and property which secured a Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure.

MERS:  As defined in Section 2.01(b)(iii).

Monthly Payment:  The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan which, unless otherwise specified herein, shall give effect to any related Debt Service Reduction and any Deficient Valuation that affects the amount of the monthly payment due on such Mortgage Loan.

Mortgage:  The mortgage, deed of trust or other instrument creating a first lien on a Mortgaged Property securing a Mortgage Note or creating a first lien on a leasehold interest.

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.

 

 

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Mortgage Interest Rate:  As to any Mortgage Loan, the per annum rate of interest at which interest accrues on the principal balance of such Mortgage Loan in accordance with the terms of the related Mortgage Note.

Mortgage Loan Purchase Agreement:  The Mortgage Loan Purchase Agreement, dated      , 200  , between the      , as seller, and the Depositor, as purchaser.

Mortgage Loan Schedule:  The list of Mortgage Loans (as from time to time amended by the Servicer to reflect the addition of Substitute Mortgage Loans and the deletion of Defective Mortgage Loans pursuant to the provisions of this Agreement) transferred to the Trustee as part of the Trust Estate and from time to time subject to this Agreement, attached hereto as Exhibit D, setting forth the following information with respect to each Mortgage Loan: (i) the Mortgage Loan identifying number; (ii) a code indicating whether the Mortgaged Property is owner-occupied; (iii) the property type for each Mortgaged Property; (iv) the original months to maturity or the remaining months to maturity from the Cut-Off Date; (v) the Loan-to-Value Ratio at origination; (vi) the Mortgage Interest Rate; (vii) the date on which the
first Monthly Payment was due on the Mortgage Loan, and, if such date is not the Due Date currently in effect, such Due Date; (viii) the stated maturity date; (ix) the amount of the Monthly Payment as of the Cut-Off Date; (x) the paid-through date; (xi) the original principal amount of the Mortgage Loan; (xii) the principal balance of the Mortgage Loan as of the close of business on the Cut-Off Date, after application of payments of principal due on or before the Cut-Off Date, whether or not collected, and after deduction of any payments collected of scheduled principal due after the Cut-Off Date; (xiii) a code indicating the purpose of the Mortgage Loan; (xiv) a code indicating the documentation style; and (xv) the Appraised Value.  With respect to the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the following information, as of the Cut-Off Date: (i) the number of Mortgage Loans; (ii) the current aggregate outstanding principal balance of the Mortgage
Loans; (iii) the weighted average Mortgage Rate of the Mortgage Loans; and (iv) the weighted average months to maturity of the Mortgage Loans.

Mortgage Loans:  Such of the mortgage loans transferred and assigned to the Trustee pursuant to Section 2.01 as from time to time are held as a part of the Trust Estate (including any Substitute Mortgage Loans and REO Property), the Mortgage Loans originally so held being identified in the Mortgage Loan Schedule.

Mortgage Note:  The originally executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan, together with all riders thereto and amendments thereof.

Mortgaged Property:  The underlying property securing a Mortgage Loan, which may include Co-op Shares or residential long-term leases.

Mortgagor:  The obligor on a Mortgage Note.

Net Mortgage Interest Rate:  As to any Mortgage Loan and Distribution Date, such Mortgage Loan’s Mortgage Interest Rate thereon on the first day of the month preceding the month of the related Distribution Date reduced by the Servicing Fee Rate and the Trustee Fee Rate.

 

 

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Non-PO Percentage:  As to any Discount Mortgage Loan, a fraction (expressed as a percentage), the numerator of which is the Net Mortgage Interest Rate of such Discount Mortgage Loan and the denominator of which is            %.  As to any Mortgage Loan that is not a Discount Mortgage Loan, 100%.

Non-PO Principal Amount:  As to any Distribution Date, the sum of the applicable Non-PO Percentage of (a) the principal portion of each Monthly Payment due on each Mortgage Loan on the related Due Date, (b) the Stated Principal Balance, as of the date of repurchase, of each Mortgage Loan that was repurchased by the Depositor pursuant to this Agreement as of such Distribution Date, (c) any Substitution Adjustment Amount in connection with a Defective Mortgage Loan received with respect to such Distribution Date, (d) any Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the calendar month preceding the month of such Distribution Date, (e) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month preceding the month of such Distribution
Date, the amount of Liquidation Proceeds allocable to principal received during the calendar month preceding the month of such Distribution Date with respect to such Mortgage Loan and (f) all Principal Prepayments received during the calendar month preceding the month of such Distribution Date.

Non-Supported Interest Shortfalls:  As to any Distribution Date, the amount, if any, by which the aggregate of Prepayment Interest Shortfalls exceeds Compensating Interest for such Distribution Date.

Non-U.S. Person:  A Person other than a U.S. Person.

Nonrecoverable Advance:  Any portion of an Advance previously made or proposed to be made in respect of a Mortgage Loan which has not been previously reimbursed and which, in the good faith judgment of the Servicer, will not or, in the case of a proposed Advance, would not be ultimately recoverable from the related Mortgagor, related Liquidation Proceeds, or other recoveries in respect of the related Mortgage Loan.

Notional Amount:  With respect to: (i) the Class A-5 Certificates and any date of determination, the Class A-5 Notional Amount and (ii) the Class A-WIO Certificates and any date of determination, the Class A-WIO Notional Amount.

Offered Certificates:  The Class A, Class B-1, Class B-2 and Class B-3 Certificates.

Officer’s Certificate:  A certificate signed by the Chairman of the Board, Vice Chairman of the Board, President or a Vice President and by the Treasurer, the Secretary or one of the Assistant Treasurers or Assistant Secretaries, or any other duly authorized officer of the Depositor or the Servicer, as the case may be, and delivered to the Trustee.

Opinion of Counsel:  A written opinion of counsel acceptable to the Trustee, who may be counsel for the Depositor or the Servicer, except that any opinion of counsel relating to the qualification of the Trust Estate as two separate REMICs or compliance with the REMIC Provisions must be an opinion of Independent counsel.

 

 

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Original Fractional Interest:  With respect to each of the following Classes of Subordinate Certificates, the corresponding percentage described below, as of the Closing Date:

	
             
	
            Class B-1
 	
            %
 
	
             
	
            Class B-2
 	
            %
 
	
             
	
            Class B-3
 	
            %
 
	
             
	
            Class B-4
 	
            %
 
	
             
	
            Class B-5
 	
            %
 
	
             
	
            Class B-6
 	
            %
 

Original Subordinate Certificate Balance:              .

OTS:  The Office of Thrift Supervision.

Outstanding Mortgage Loan:  As to any Due Date, a Mortgage Loan which was not the subject of a Principal Prepayment in Full prior to such Due Date, which did not become a Liquidated Mortgage Loan prior to such Due Date and which was not purchased from the Trust prior to such Due Date pursuant to Sections 2.02 or 2.04.

Ownership Interest:  As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.

Pass-Through Rate:  As to each Class of interest-bearing Certificates, the per annum rate set forth in the Preliminary Statement.

Paying Agent:  As defined in Section 9.13.

Percentage Interest: As to any Certificate, the percentage obtained by dividing the initial Certificate Balance of such Certificate (or the initial notional amount for a Class A-5 or Class A-WIO Certificate) by the Initial Class Certificate Balance or Initial Notional Amount, as applicable, of the Class of which such Certificate is a part.

Periodic Advance:  The payment required to be made by the Servicer with respect to any Distribution Date pursuant to Section 3.20, the amount of any such payment being equal to the aggregate of Monthly Payments (net of the Servicing Fee) on the Mortgage Loans (including any REO Property) that were due on the related Due Date and not received as of the close of business on the related Determination Date, less the aggregate amount of any such delinquent payments that the Servicer has determined would constitute a Nonrecoverable Advance if advanced.

Permitted Investments:  One or more of the following:

(i)                obligations of or guaranteed as to principal and interest by the United States, FHLMC, FNMA or any agency or instrumentality of the United States when such obligations are backed by the full faith and credit of the United States; provided that such obligations of FHLMC or FNMA shall be limited to senior debt obligations and mortgage participation certificates other than investments in mortgage-backed or mortgage 

 

 

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participation securities with yields evidencing extreme sensitivity to the rate of principal payments on the underlying mortgages, which shall not constitute Permitted Investments hereunder;

(ii)               repurchase agreements on obligations specified in clause (i) maturing not more than one month from the date of acquisition thereof with a corporation incorporated under the laws of the United States or any state thereof rated not lower than “     ” by       and “     ” by      

(iii)              federal funds, certificates of deposit, demand deposits, time deposits and bankers’ acceptances (which shall each have an original maturity of not more than 90 days and, in the case of bankers’ acceptances, shall in no event have an original maturity of more than 365 days or a remaining maturity of more than 30 days) denominated in United States dollars of any U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof, rated not lower than “     ” by       and “     ” by      

(iv)              commercial paper (having original maturities of not more than 365 days) of any corporation incorporated under the laws of the United States or any state thereof which is rated not lower than “     ” by       and “     ” by      

(v)               investments in money market funds (including funds of the Trustee or its affiliates, or funds for which an affiliate of the Trustee acts as advisor, as well as funds for which the Trustee and its affiliates may receive compensation) rated either “     ” by       and “     ” by       or otherwise approved in writing by each Rating Agency; and

(vi)              other obligations or securities that are acceptable to each Rating Agency and, as evidenced by an Opinion of Counsel obtained by the Servicer, will not affect the qualification of the Trust Estate as two separate REMICs;

provided, however, that no instrument shall be a Permitted Investment if it represents either (a) the right to receive only interest payments with respect to the underlying debt instrument or (b) the right to receive both principal and interest payments derived from obligations underlying such instrument and the principal and interest with respect to such instrument provide a yield to maturity greater than 120% of the yield to maturity at par of such underlying obligations.

Permitted Transferee:  Any Person other than (i) the United States, or any State or any political subdivision thereof, or any agency or instrumentality of any of the foregoing, (ii) a foreign government, international organization or any agency or instrumentality of either of the foregoing, (iii) an organization which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) (except certain farmers’ cooperatives described in Code Section 521), (iv) rural electric and telephone cooperatives described in Code Section 1381(a)(2)(C) and (v) any other Person so designated by the Servicer based on an Opinion of Counsel to the effect that any transfer to such Person may cause the Trust or any other Holder of a Residual Certificate to incur tax liability that would not be imposed
other than on account of such transfer.  The terms “United States,” 

 

 

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“State” and “international organization” shall have the meanings set forth in Code Section 7701 or successor provisions.

Person:  Any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

Physical Certificates:  The Class A-R, Class A-LR, Class B-4, Class B-5 and Class B-6 Certificates.

Plan:  As defined in Section 6.02(e).

PO Percentage:  As to any Discount Mortgage Loan, 100% minus the Non-PO Percentage for such Mortgage Loan.  As to any Mortgage Loan that is not a Discount Mortgage Loan, 0%.

PO Principal Amount:  As to any Distribution Date, the sum of the applicable PO Percentage of (a) the principal portion of each Monthly Payment due on each Mortgage Loan on the related Due Date, (b) the Stated Principal Balance, as of the date of repurchase, of each Mortgage Loan that was repurchased by the related Seller or the Depositor pursuant to this Agreement as of such Distribution Date, (c) any Substitution Adjustment Amount in connection with any Defective Mortgage Loan received with respect to such Distribution Date, (d) any Liquidation Proceeds allocable to recoveries of principal of Mortgage Loans that are not yet Liquidated Mortgage Loans received during the calendar month preceding the month of such Distribution Date, (e) with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal received with respect to such Mortgage Loan during the calendar month preceding the month of such Distribution Date with respect to such Mortgage Loan and (f) all Principal Prepayments received during the calendar month preceding the month of such Distribution Date.

Pool Distribution Amount:  As to any Distribution Date, the excess of (a) the sum of (i) the aggregate of (A) the interest portion of any Monthly Payment (net of the Servicing Fee) and the principal portion of any Monthly Payment due on the Due Date in the month in which such Distribution Date occurs and which is received prior to the related Determination Date and (B) all Periodic Advances and payments of Compensating Interest made by the Servicer in respect of such Distribution Date deposited to the Servicer Custodial Account pursuant to Section 3.08(b)(vii); (ii) all Liquidation Proceeds received during the preceding calendar month and deposited to the Servicer Custodial Account pursuant to Section 3.08(b)(iii); (iii) all Principal Prepayments received during the month preceding the month of such Distribution Date and deposited to the Servicer Custodial
Account pursuant to Section 3.08(b)(i) during such period; (iv) in connection with Defective Mortgage Loans, as applicable, the aggregate of the Repurchase Prices and Substitution Adjustment Amounts deposited on the related Remittance Date pursuant to Section 3.08(b)(vi); and (v) any other amounts in the Servicer Custodial Account deposited therein pursuant to Sections 3.08(b)(iv), (v) and (viii) in respect of such Distribution Date; over (b) any (i) amounts permitted to be withdrawn from the Servicer Custodial Account pursuant to clauses (i) through (vii), inclusive, of Section 3.11(a) and (ii) 

 

 

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amounts permitted to be withdrawn from the Certificate Account pursuant to clauses (i) and (ii) of Section 3.11(b).

Pool Stated Principal Balance:  As to any Distribution Date, the aggregate Stated Principal Balances of all Mortgage Loans that were Outstanding Mortgage Loans immediately following the Due Date in the month of such Distribution Date.

Premium Mortgage Loan:  Any Mortgage Loan with a Net Mortgage Interest Rate that is equal to or more than      % per annum.

Prepayment Interest Shortfall:  As to any Distribution Date and each Mortgage Loan subject to a Principal Prepayment received during the calendar month preceding such Distribution Date, the amount, if any, by which one month’s interest at the related Mortgage Interest Rate (net of the Servicing Fee) on such Principal Prepayment exceeds the amount of interest paid in connection with such Principal Prepayment.

Primary Insurance Policy:  Each policy of primary mortgage guaranty insurance or any replacement policy therefor with respect to any Mortgage Loan, in each case issued by an insurer acceptable to FNMA or FHLMC.

Principal-Only Certificates:  Any Class of Certificates entitled to distributions of principal, but to no distributions of interest.  The Class A-PO Certificates are the only Principal-Only Certificates.

Principal Prepayment:  Any payment or other recovery of principal on a Mortgage Loan (other than Liquidation Proceeds) which is received in advance of its scheduled Due Date and is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

Principal Prepayment in Full:  Any Principal Prepayment of the entire principal balance of a Mortgage Loan.

Priority Amount:  As to any Distribution Date, the lesser of (i) the Class Certificate Balance of the Class A-6 Certificates and (ii) the product of (a) the Shift Percentage, (b) the Priority Percentage and (c) the Non-PO Principal Amount.

Priority Percentage:  As to any Distribution Date, the percentage equivalent (carried to six places rounded up) of a fraction the numerator of which is the Class Certificate Balance of the Class A-6 Certificates immediately prior to such date and the denominator of which is the aggregate of the Class Certificate Balances of all Classes of Certificates (other than the Class A-PO Certificates) immediately prior to such date.

Private Certificates:  The Class B-4, Class B-5 and Class B-6 Certificates.

Pro Rata Share:  As to any Distribution Date and any Class of Subordinate Certificates that is not a Restricted Class, the portion of the Subordinate Principal Distribution Amount allocable to such Class, equal to the product of the Subordinate Principal Distribution Amount for such Distribution Date and a fraction, the numerator of which is the related Class 

 

 

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Certificate Balance thereof and the denominator of which is the aggregate Class Certificate Balance of the Subordinate Certificates that are not Restricted Classes.  The Pro Rata Share of a Restricted Class shall be 0%.

Qualified Appraiser:  An appraiser of a Mortgaged Property duly appointed by the originator of the related Mortgage Loan, who had no interest, direct or indirect, in such Mortgaged Property or in any loan made on the security thereof, whose compensation is not affected by the approval or disapproval of the related Mortgage Loan and who met the minimum qualifications of FNMA or FHLMC.

Rate Determination Date:  As to any Distribution Date and any Class of LIBOR Certificates, the second LIBOR Business Day prior to the beginning of the applicable Interest Accrual Period for such Class and such Distribution Date.

Rating Agency:  Each of       and      .  If either such organization or a successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating organization, or other comparable Person, as is designated by the Depositor, notice of which designation shall be given to the Trustee.  References herein to a given rating or rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers.

Realized Loss:  With respect to each Liquidated Mortgage Loan, an amount as of the date of such liquidation, equal to (i) the unpaid principal balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus (ii) interest at the Net Mortgage Interest Rate from the Due Date as to which interest was last paid or advanced (and not reimbursed) to Certificateholders up to the Due Date in the month in which Liquidation Proceeds are required to be distributed on the Stated Principal Balance of such Liquidated Mortgage Loan from time to time, minus (iii) the Liquidation Proceeds, if any, received during the month in which such liquidation occurred, to the extent applied as recoveries of interest at the Net Mortgage Interest Rate and to principal of the Liquidated Mortgage Loan.  With respect to each Mortgage Loan that has become the subject of a Deficient
Valuation, if the principal amount due under the related Mortgage Note has been reduced, the difference between the principal balance of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the principal balance of the Mortgage Loan as reduced by the Deficient Valuation.  With respect to each Mortgage Loan that has become the subject of a Debt Service Reduction and any Distribution Date, the amount, if any, by which the principal portion of the related Monthly Payment has been reduced.

Record Date:  The last day of the month (or, if such day is not a Business Day, the preceding Business Day) preceding the month of the related Distribution Date.

Refinance Mortgage Loan:  Any Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property.

Regular Certificates:  As defined in the Preliminary Statement hereto.

Relief Act:  The Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended.

 

 

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Relief Act Reduction:  With respect to any Distribution Date, for any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended calendar month as a result of the application of the Relief Act or comparable state legislation, the amount, if any, by which (i) interest collectible on such Mortgage Loan for the most recently ended calendar month is less than (ii) interest accrued pursuant to the terms of the Mortgage Note on the same principal amount and for the same period as the interest collectible on such Mortgage Loan for the most recently ended calendar month.

REMIC:  A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

REMIC Certificate Maturity Date:  The “latest possible maturity date” of the Regular Certificates as that term is defined in Section 2.07.

REMIC Provisions:  Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations promulgated thereunder, as the foregoing may be in effect from time to time, as well as provisions of applicable state laws.

Remittance Date:  As to any Distribution Date, by 2:00 p.m. Eastern time on the second Business Day immediately preceding such Distribution Date.

REO Disposition Period:  As defined in Section 3.14.

REO Proceeds:  Proceeds, net of any related expenses of the Servicer, received in respect of any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property) which are received prior to the final liquidation of such Mortgaged Property.

REO Property:  A Mortgaged Property acquired by the Servicer on behalf of the Trust through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

Repurchase Price:  As to any Defective Mortgage Loan repurchased on any date pursuant to Sections 2.02 or 2.04, an amount equal to the sum of (i) the unpaid principal balance thereof and (ii) the unpaid accrued interest thereon at the applicable Mortgage Interest Rate from the Due Date to which interest was last paid by the Mortgagor to the first day of the month following the month in which such Mortgage Loan became eligible to be repurchased.

Request for Release:  The Request for Release submitted by the Servicer to the Trustee or the Custodian on behalf of the Trustee, substantially in the form of Exhibit E.

Required Insurance Policy:  With respect to any Mortgage Loan, any insurance policy which is required to be maintained from time to time under this Agreement in respect of such Mortgage Loan.

Reserve Interest Rate:  As defined in Section 5.09.

 

 

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Residual Certificates:  The Class A-R and Class A-LR Certificates.

Responsible Officer:  When used with respect to the Trustee, any officer of the Corporate Trust Department of the Trustee, including any Senior Vice President, any Vice President, any Assistant Vice President, any Assistant Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and having responsibility for the administration of this Agreement.

Restricted Classes:  As defined in Section 5.02(d).

[S&P:  Standard & Poor’s, a Division of The McGraw-Hill Companies, Inc., and its successors in interest.]

Seller:       , a      , or its successor in interest, as seller of the Mortgage Loans under the Mortgage Loan Purchase Agreement.

Senior Certificates:  The Class A Certificates.

Senior Credit Support Depletion Date:  The date on which the aggregate Class Certificate Balance of the Subordinate Certificates is reduced to zero.

Senior Percentage:  With respect to any Distribution Date, the percentage, carried six places rounded up, obtained by dividing the aggregate Class Certificate Balance of the Senior Certificates (other than the Class A-PO Certificates) immediately prior to such Distribution Date by the aggregate Class Certificate Balance of all Classes of Certificates (other than the Class A-PO Certificates) immediately prior to such Distribution Date.

Senior Prepayment Percentage:  For any Distribution Date during the five years beginning on the first Distribution Date,      %.  The Senior Prepayment Percentage for any Distribution Date occurring on or after the fifth anniversary of the first Distribution Date will, except as provided herein, be as follows: for any Distribution Date in the first year thereafter, the Senior Percentage plus      % of the Subordinate Percentage for such Distribution Date; for any Distribution Date in the second year thereafter, the Senior Percentage plus      % of the Subordinate Percentage for such Distribution Date; for any Distribution Date in the third year thereafter, the Senior Percentage plus      % of the Subordinate Percentage for such Distribution Date; for any
Distribution Date in the fourth year thereafter, the Senior Percentage plus      % of the Subordinate Percentage for such Distribution Date; and for any Distribution Date in the fifth or later years thereafter, the Senior Percentage for such Distribution Date (unless on any of the foregoing Distribution Dates the Senior Percentage exceeds the initial Senior Percentage, in which case the Senior Prepayment Percentage for such Distribution Date will once again equal 100%).  Notwithstanding the foregoing, no decrease in the Senior Prepayment Percentage will occur unless both of the Senior Step Down Conditions are satisfied.

Senior Principal Distribution Amount:  As to any Distribution Date, the sum of (i) the Senior Percentage of the applicable Non-PO Percentage of all amounts described in clauses (a) through (d) of the definition of “Non-PO Principal Amount” for such Distribution Date and (ii) the Senior Prepayment Percentage of the applicable Non-PO Percentage of the amounts 

 

 

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described in clauses (e) and (f) of the definition of “Non-PO Principal Amount” for such Distribution Date.

Senior Step Down Conditions:  As of any Distribution Date as to which any decrease in the Senior Prepayment Percentage applies, (i) the outstanding principal balance of all Mortgage Loans (including, for this purpose, any Mortgage Loans in foreclosure or any REO Property) delinquent 60 days or more (averaged over the preceding six month period), as a percentage of the aggregate Class Certificate Balance of the Subordinate Certificates (averaged over the preceding six-month period), is not equal to or greater than 50% or (ii) cumulative Realized Losses with respect to the Mortgage Loans as of the applicable Distribution Date do not exceed the percentages of the Original Subordinate Certificate Balance set forth below:

	
            Distribution Date Occurring
 	
            Percentage of
 Original Subordinate
 Certificate Balance
 
	
            20   through        20
 	
            %
 
	
            20   through        20
 	
            %
 
	
            20   through        20
 	
            %
 
	
            20   through        20
 	
            %
 
	
            20   and thereafter
 	
            %
 

Servicer:       , a      , or its successor in interest, in its capacity as servicer of the Mortgage Loans, or any successor servicer appointed as herein provided.

Servicer Advance Date:  As to any Distribution Date, 11:30 a.m., Eastern time, on the Business Day immediately preceding such Distribution Date.

Servicer Custodial Account:  The separate Eligible Account or Accounts created and maintained by the Servicer pursuant to Section 3.08(b).

Servicer’s Certificate:  The monthly report required by Section 4.01.

Servicing Advances:  All customary, reasonable and necessary “out of pocket” costs and expenses incurred in the performance by the Servicer of its servicing obligations, including, but not limited to (i) the preservation, restoration and protection of a Mortgaged Property, (ii) expenses reimbursable to the Servicer pursuant to Section 3.14 and any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of any REO Property and (iv) compliance with the obligations under Section 3.12.

Servicing Fee:  With respect to each Mortgage Loan and Distribution Date, the amount of the fee payable to the Servicer, which shall, for such Distribution Date, be equal to one-twelfth of the product of the Servicing Fee Rate with respect to such Mortgage Loan and the Stated Principal Balance of such Mortgage Loan, subject to reduction as provided in Section 3.17.  Such fee shall be payable monthly, computed on the basis of the same Stated Principal Balance and period respecting which any related interest payment on a Mortgage Loan is computed. The Servicer’s right to receive the Servicing Fee is limited to, and payable solely 

 

 

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from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds and other proceeds, to the extent permitted by Section 3.11) of related Monthly Payments collected by the Servicer, or as otherwise provided under Section 3.11.

Servicing Fee Rate:  With respect to each Mortgage Loan, the per annum rate equal to (i) the related Mortgage Interest Rate less (ii) the sum of      % and the Trustee Fee Rate; provided, however, that the Servicing Fee Rate will not be less than      % per annum with respect to any Mortgage Loan.

Servicing File:  The items pertaining to a particular Mortgage Loan referred to in Exhibit J hereto, and any additional documents required to be added to the Servicing File pursuant to the Agreement.

Servicing Officer:  Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name appears on a list of servicing officers furnished to the Trustee by the Servicer, as such list may from time to time be amended.

Shift Percentage:  As to any Distribution Date, the percentage indicated below:

	

            Distribution Date Occurring In
 	
            Shift Percentage
 
	
            20   through        20                                                                                                              
 	
            %
 
	
            20   through        20                                                                                                              
 	
            %
 
	
            20   through        20                                                                                                              
 	
            %
 
	
            20   through        20                                                                                                              
 	
            %
 
	
            20   through        20                                                                                                              
 	
            %
 
	
            20   and thereafter                                                                         
 	
            %
 
	
             
 	
             
 

Similar Law:  As defined in Section 6.02(e).

Stated Principal Balance:  As to any Mortgage Loan and date, the unpaid principal balance of such Mortgage Loan as of the Due Date immediately preceding such date as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) after giving effect to any previous partial Principal Prepayments and Liquidation Proceeds allocable to principal (other than with respect to any Liquidated Mortgage Loan) and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor, and after giving effect to any Deficient Valuation.

Subordinate Certificates:  The Class B Certificates.

Subordinate Percentage:  As of any Distribution Date, 100% minus the Senior Percentage for such Distribution Date.

Subordinate Prepayment Percentage:  As to any Distribution Date, 100% minus the Senior Prepayment Percentage for such Distribution Date.

Subordinate Principal Distribution Amount:  With respect to any Distribution Date, an amount equal to the sum of (i) the Subordinate Percentage of the applicable Non-PO 

 

 

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Percentage of all amounts described in clauses (a) through (d) of the definition of “Non-PO Principal Amount” for such Distribution Date and (ii) the Subordinate Prepayment Percentage of the applicable Non-PO Percentage of the amounts described in clauses (e) and (f) of the definition of “Non-PO Principal Amount” for such Distribution Date.

Subservicer:  Any Person with which the Servicer has entered into a Subservicing Agreement and which satisfies the requirements set forth therein.

Subservicing Agreement:  Any subservicing agreement (which, in the event the Subservicer is an affiliate of the Servicer, need not be in writing) between the Servicer and any Subservicer relating to servicing and/or administration of certain Mortgage Loans as provided in Section 3.02.

Substitute Mortgage Loan:  A Mortgage Loan substituted for a Defective Mortgage Loan which must, on the date of such substitution (i) have a Stated Principal Balance, after deduction of the principal portion of the Monthly Payment due in the month of substitution, not in excess of, and not more than 10% less than, the Stated Principal Balance of the Defective Mortgage Loan; (ii) have a Net Mortgage Interest Rate equal to that of the Defective Mortgage Loan; (iii) have a Loan-to-Value Ratio not higher than that of the Defective Mortgage Loan; (iv) have a remaining term to maturity not greater than (and not more than one year less than) that of the Defective Mortgage Loan; and (v) comply with each Mortgage Loan representation and warranty set forth in the Sale Agreement relating to the Defective Mortgage Loan.  More than one Substitute Mortgage Loan may be
substituted for a Defective Mortgage Loan if such Substitute Mortgage Loans meet the foregoing attributes in the aggregate.

Substitution Adjustment Amount:  As defined in Section 2.02.

Tax Matters Person:  Any person designated as “tax matters person” in accordance with Section 5.06 and the manner provided under Treasury Regulation § 1.860F-4(d) and Treasury Regulation § 301.6231(a)(7)-1.

Telerate page 3750:  As defined in Section 5.09.

Treasury Regulations:  The final and temporary regulations promulgated under the Code by the U.S. Department of the Treasury.

Trust:  The trust created by this Agreement.

Trust Estate:  The corpus of the Trust created to the extent described herein, consisting of the Mortgage Loans, such assets as shall from time to time be identified as deposited in the Servicer Custodial Account or the Certificate Account, in accordance with this Agreement, REO Property, the Primary Insurance Policies and any other Required Insurance Policy.

Trustee:       , and its successors-in-interest and, if a successor trustee is appointed hereunder, such successor, as trustee.

 

 

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Trustee Fee:  As to any Distribution Date, an amount equal to one-twelfth of the Trustee Fee Rate multiplied by the aggregate Stated Principal Balance of the Mortgage Loans immediately following the Due Date in the month preceding the month in which such Distribution Date occurs.

	
            Trustee Fee Rate:  With respect to each Mortgage Loan,         % per annum.
 	
            
 

Uncertificated Lower-Tier Interest:  A regular interest in the Lower-Tier REMIC which is held as an asset of the Upper-Tier REMIC and is entitled to monthly distributions as provided in Section 5.02(a) hereof. Any of the Class A-L1, Class A-L3, Class A-L4, Class A-LPO, Class A-LUR, Class A-LWIO, Class B-L1, Class B-L2, Class B-L3, Class B-L4, Class B-L5 and Class B-L6 Interests are Uncertificated Lower-Tier Interests.

	
            Underwriting Guidelines:  The underwriting guidelines of  
 	
            .
 

Upper-Tier Certificate:  Any one of the Class A Certificates (other than the Class A-LR Certificate) and the Class B Certificates.

Upper-Tier Certificate Account:  The separate Eligible Account established and maintained by the Trustee pursuant to Section 3.08(f).

Upper-Tier REMIC:  As defined in the Preliminary Statement, the assets of which consist of the Uncertificated Lower-Tier Interests and such amounts as shall from time to time be held in the Upper-Tier Certificate Account.

U.S. Person:  A citizen or resident of the United States, a corporation or partnership (unless, in the case of a partnership, Treasury Regulations are adopted that provide otherwise) created or organized in or under the laws of the United States, any state thereof or the District of Columbia, including an entity treated as a corporation or partnership for federal income tax purposes, an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of such trust, and one or more such U.S. Persons have the authority to control all substantial decisions of such trust (or, to the extent provided in applicable Treasury Regulations, certain trusts in existence on August 20, 1996 which are eligible to elect to be treated as U.S. Persons).

Voting Rights:  The portion of the voting rights of all of the Certificates which is allocated to any Certificate.  As of any date of determination, (a)      % of all Voting Rights shall be allocated to the Holders of the Residual Certificates, (b)      % of all Voting Rights shall be allocated to the Holders of the Class A-5 Certificates, (c)      % of all Voting Rights shall be allocated to the Holders of the Class A-WIO Certificates and (d) the remaining Voting Rights shall be allocated among Holders of the remaining Classes of Certificates in proportion to the Certificate Balances of their respective Certificates on such date.

Section 1.02.  Interest Calculations.   All calculations of interest will be made on a 360-day year consisting of twelve 30-day months.  All dollar amounts calculated hereunder shall be rounded to the nearest penny with one-half of one penny being rounded down.

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ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS

ORIGINAL ISSUANCE OF CERTIFICATES

Section 2.01.  Conveyance of Mortgage Loans.

(a)               The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee on behalf of the Trust for the benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Mortgage Loans, including all interest and principal received on or with respect to the Mortgage Loans (other than payments of principal and interest due and payable on the Mortgage Loans on or before the Cut-Off Date).  The foregoing sale, transfer, assignment and set over does not and is not intended to result in a creation of an assumption by the Trustee of any obligation of the Depositor or any other Person in connection with the Mortgage Loans or any agreement
or instrument relating thereto, except as specifically set forth herein.

(b)               In connection with such transfer and assignment, the Depositor has delivered or caused to be delivered to the Trustee, for the benefit of the Certificateholders, the following documents or instruments with respect to each Mortgage Loan so assigned:

(i)                the original Mortgage Note, endorsed by manual or facsimile signature in the following form:  “Pay to the order of                             , as Trustee, without recourse,” with all necessary intervening endorsements showing a complete chain of endorsement from the originator to the Trustee (each such endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note);

(ii)               except as provided below, the original recorded Mortgage with evidence of a recording thereon, or if any such Mortgage has not been returned from the applicable recording office or has been lost, or if such public recording office retains the original recorded Mortgage, a copy of such Mortgage certified by the Depositor as being a true and correct copy of the Mortgage;

(iii)              subject to the provisos at the end of this paragraph, a duly executed Assignment of Mortgage to “                    , as trustee for the holders of the Wachovia Mortgage Loan Trust, Inc.LLC Mortgage Pass-Through Certificates, Series 200  -   Certificates” (which may be included in a blanket assignment or assignments), together with, except as provided below, originals of all interim recorded assignments of such mortgage or a copy of such interim assignment certified by the Depositor as being a true and complete copy of the original recorded intervening assignments of Mortgage (each such assignment, when duly and
validly completed, to be in recordable form and sufficient to effect the assignment of and transfer to the assignee thereof, under the Mortgage to which the assignment relates); provided that, if the related Mortgage has not been returned from the applicable public recording office, such Assignment of Mortgage may exclude the information to be provided by the recording office; and provided,

 

 

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 further, if the related Mortgage has been recorded in the name of Mortgage Electronic Registration Systems, Inc. (“MERS”) or its designee, no Assignment of Mortgage in favor of the Trustee will be required to be prepared or delivered and instead, the Servicer shall take all actions as are necessary to cause the Trust to be shown as the owner of the related Mortgage Loan on the records of MERS for purposes of the system of recording transfers of beneficial ownership of mortgages maintained by MERS;

(iv)              the originals of all assumption, modification, consolidation or extension agreements, if any, with evidence of recording thereon, if any;

(v)               the original or duplicate original mortgagee title insurance policy and all riders thereto;

(vi)              the original of any guarantee executed in connection with the Mortgage Note;

(vii)             for each Mortgage Loan, if any, which is secured by a residential long-term lease, a copy of the lease with evidence of recording indicated thereon, or, if the lease is in the process of being recorded, a photocopy of the lease, certified by an officer of the respective prior owner of such Mortgage Loan or by the applicable title insurance company, closing/settlement/escrow agent or company or closing attorney to be a true and correct copy of the lease transmitted for recordation;

(viii)            the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage; and

(ix)              for each Mortgage Loan secured by Co-op Shares, the originals of the following documents or instruments:

	
            (A)
 	
            The stock certificate;
 	
             

	
            (B)
 	
            The stock power executed in blank;
 	
             

	
            (C)
 	
            The executed proprietary lease;
 	
             

	
            (D)
 	
            The executed recognition agreement;
 	
             

	
            (E)
 	
            The executed assignment of recognition agreement, if any;
 
						

(F)              The executed UCC-1 financing statement with evidence of recording thereon; and

(G)              Executed UCC-3 financing statements or other appropriate UCC financing statements required by state law, evidencing a complete and unbroken line from the mortgagee to the Trustee with evidence of recording thereon (or in a form suitable for recordation).

 

 

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provided, however, that on the Closing Date, with respect to item (iii), the Depositor has delivered to the Trustee a copy of such Assignment of Mortgage in blank and has caused the Servicer to retain the completed Assignment of Mortgage for recording as described below, unless such Mortgage has been recorded in the name of MERS or its designee.  In addition, if the Depositor is unable to deliver or cause the delivery of any original Mortgage Note due to the loss of such original Mortgage Note, the Depositor may deliver a copy of such Mortgage Note, together with a lost note affidavit, and shall thereby be deemed to have satisfied the document delivery requirements of this Section 2.01(b).  As set forth on Exhibit L attached hereto is a list of all states where recordation is required by either Rating Agency to obtain the initial
ratings of the Certificates.   The Trustee may rely and shall be protected in relying upon the information contained in such Exhibit L.

If in connection with any Mortgage Loans, the Depositor cannot deliver (A) the Mortgage, (B) all interim recorded assignments, (C) all assumption, modification, consolidation or extension agreements, if any, or (D) the lender’s title policy (together with all riders thereto) satisfying the requirements of clause (ii), (iii), (iv) or (v) above, respectively, concurrently with the execution and delivery hereof because such document or documents have not been returned from the applicable public recording office in the case of clause (ii), (iii) or (iv) above, or because the title policy has not been delivered to either the Servicer or the Depositor by the applicable title insurer in the case of clause (v) above, the Depositor shall promptly deliver or cause to be delivered to the Trustee or the Custodian on behalf of the Trustee, in the case of clause (ii), (iii) or (iv) above, such
Mortgage, such interim assignment or such assumption, modification, consolidation or extension agreement, as the case may be, with evidence of recording indicated thereon upon receipt thereof from the public recording office, but in no event shall any such delivery of any such documents or instruments be made later than one year following the Closing Date, unless, in the case of clause (ii), (iii) or (iv) above, there has been a continuing delay at the applicable recording office or, in the case of clause (v), there has been a continuing delay at the applicable insurer and the Depositor has delivered the Officer’s Certificate to such effect to the Trustee.  The Depositor shall forward or cause to be forwarded to the Trustee (1) from time to time additional original documents evidencing an assumption or modification of a Mortgage Loan and (2) any other documents required to be delivered by the Depositor or the Servicer to the Trustee or the Custodian on the Trustee’s
behalf.  In the event that the original Mortgage is not delivered and in connection with the payment in full of the related Mortgage Loan the public recording office requires the presentation of a “lost instruments affidavit and indemnity” or any equivalent document, because only a copy of the Mortgage can be delivered with the instrument of satisfaction or reconveyance, the Servicer shall prepare, execute and deliver or cause to be prepared, executed and delivered, on behalf of the Trust, such a document to the public recording office.

As promptly as practicable subsequent to such transfer and assignment, and in any event, within 30 days thereafter, the Servicer shall (except for any Mortgage which has been recorded in the name of MERS or its designee) (I) cause each Assignment of Mortgage to be in proper form for recording in the appropriate public office for real property records within 30 days of the Closing Date and (II) at the Depositor’s expense, cause to be delivered for recording in the appropriate public office for real property records the Assignments of the Mortgages to the Trustee, except that, with respect to any Assignment of a Mortgage as to which the Servicer has not received the information required to prepare such assignment in recordable form, the

 

 

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 Servicer’s obligation to do so and to deliver the same for such recording shall be as soon as practicable after receipt of such information and in any event within 30 days after the receipt thereof and, no recording of an Assignment of Mortgage will be required in a state if either (i) the Depositor furnishes to the Trustee an unqualified Opinion of Counsel reasonably acceptable to the Trustee to the effect that recordation of such assignment is not necessary under applicable state law to preserve the Trustee’s interest in the related Mortgage Loan against the claim of any subsequent transferee of such Mortgage Loan
or any successor to, or creditor of, the Depositor or the originator of such Mortgage Loan or (ii) the recordation of an Assignment of Mortgage in such state is not required by either Rating Agency in order to obtain the initial ratings on the Certificates on the Closing Date.

In the case of Mortgage Loans that have been prepaid in full as of the Closing Date, the Depositor, in lieu of delivering the above documents to the Trustee, or the Custodian on the Trustee’s behalf, will cause the Servicer to deposit in the Servicer Custodial Account the portion of such payment that is required to be deposited in the Servicer Custodial Account pursuant to Section 3.08.

Section 2.02.  Acceptance by the Trustee of the Mortgage Loans.  Subject to the provisions of the following paragraph, the Trustee declares that it, or the Custodian as its agent, will hold the documents referred to in Section 2.01 and the other documents delivered to it constituting the Mortgage Files, and that it will hold such other assets as are included in the Trust Estate, in trust for the exclusive use and benefit of all present and future Certificateholders.

Within 90 days after the execution and delivery of this Agreement, the Trustee shall review, or cause the Custodian to review, the Mortgage Files in its possession.  If, in the course of such review, the Trustee or the Custodian finds any document constituting a part of a Mortgage File which does not meet the requirements of Section 2.01 or is omitted from such Mortgage File, the Trustee shall promptly so notify the Servicer and the Depositor, or shall cause the Custodian to promptly so notify the Servicer and the Depositor.  In performing any such review, the Trustee or the Custodian may conclusively rely on the purported genuineness of any such document and any signature thereon.  It is understood that the scope of the Trustee’s or the Custodian’s review of the Mortgage Files is limited solely to confirming that the documents listed in Section 2.01 have been received and
further confirming that any and all documents delivered pursuant to Section 2.01 appear on their face to have been executed and relate to the Mortgage Loans identified in the Mortgage Loan Schedule.  Neither the Trustee nor the Custodian shall have any responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form, whether any document has been recorded in accordance with the requirements of any applicable jurisdiction, or whether a blanket assignment is permitted in any applicable jurisdiction.  The Depositor hereby covenants and agrees that it will promptly correct or cure such defect within 90 days from the date it was so notified of such defect and, if the Depositor does not correct or cure such defect within such period, the Depositor will either (a) substitute for the related Mortgage Loan a Substitute Mortgage Loan, which substitution shall be accomplished in the manner and subject to
the conditions set forth below or (b) purchase such Mortgage Loan from the Trustee at the Repurchase Price for such Mortgage Loan; provided, however, that in no event shall such a substitution occur more than two years from the Closing Date; provided, further, that such substitution or repurchase shall occur within 90 days of when such defect was discovered if such

 

 

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   defect will cause the Mortgage Loan not to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code.

With respect to each Substitute Mortgage Loan the Depositor shall deliver to the Trustee, for the benefit of the Certificateholders, the Mortgage Note, the Mortgage, the related Assignment of Mortgage (except for any Mortgage which has been recorded in the name of MERS or its designee), and such other documents and agreements as are otherwise required by Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01.  No substitution is permitted to be made in any calendar month after the Determination Date for such month.  Monthly Payments due with respect to any such Substitute Mortgage Loan in the month of substitution shall not be part of the Trust Estate and will be retained by the Depositor.  For the month of substitution, distributions to Certificateholders will include the Monthly Payment due for such month on any Defective Mortgage Loan
for which the Depositor has substituted a Substitute Mortgage Loan.

The Servicer shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the removal of each Mortgage Loan that has become a Defective Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee and the Custodian.  Upon such substitution, each Substitute Mortgage Loan shall be subject to the terms of this Agreement in all respects, and the Depositor shall be deemed to have made to the Trustee with respect to such Substitute Mortgage Loan, as of the date of substitution, the representations and warranties made pursuant to Section 2.04.  Upon any such substitution and the deposit to the Servicer Custodial Account of any required Substitution Adjustment Amount (as described in the next paragraph) and receipt of a Request for Release, the Trustee shall release, or
shall direct the Custodian to release, the Mortgage File relating to such Defective Mortgage Loan to the Depositor and shall execute and deliver at the Depositor’s direction such instruments of transfer or assignment prepared by the Depositor, in each case without recourse, as shall be necessary to vest title in the Depositor, or its designee, to the Trustee’s interest in any Defective Mortgage Loan substituted for pursuant to this Section 2.02.

For any month in which the Depositor substitutes one or more Substitute Mortgage Loans for one or more Defective Mortgage Loans, the amount (if any) by which the aggregate principal balance of all such Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all such Defective Mortgage Loans (after application of the principal portion of the Monthly Payments due in the month of substitution) (the “Substitution Adjustment Amount”) plus an amount equal to the aggregate of any unreimbursed Advances with respect to such Defective Mortgage Loans shall be deposited into the Certificate Account by the Depositor on or before the Remittance Date for the Distribution Date in the month succeeding the calendar month during which the related Mortgage Loan is required to be purchased or replaced hereunder.

The Trustee shall retain or shall cause the Custodian to retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions set forth herein. The Servicer shall promptly deliver to the Trustee, upon the execution or, in the case of documents requiring recording, receipt thereof, the originals of such other documents or 

 

 

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instruments constituting the Mortgage File as come into the Servicer’s possession from time to time.

It is understood and agreed that the obligation of the Depositor to substitute for or to purchase any Mortgage Loan which does not meet the requirements of Section 2.01 shall constitute the sole remedy respecting such defect available to the Trustee and any Certificateholder against the Depositor.

The Trustee or the Custodian, on behalf of the Trustee, shall be under no duty or obligation (i) to inspect, review or examine any such documents, instruments, certificates or other papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they are other than what they purport to be on their face or (ii) to determine whether any Mortgage File should include any of the documents specified in Section 2.01(b)(iv), (vi), (vii) and (viii).

Section 2.03.  Representations, Warranties and Covenants of the Servicer.

The Servicer hereby makes the following representations and warranties to the Depositor and the Trustee, as of the Closing Date:

(i)                The Servicer is a national banking association duly organized, validly existing, and in good standing under the federal laws of the United States of America and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each of the states where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Servicer.  The Servicer has power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized.  This Agreement, assuming due authorization, execution and delivery by the other parties hereto, evidences the valid, binding and enforceable obligation of the Servicer, subject to applicable law except as enforceability may be limited by (A) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws affecting the enforcement of the rights of creditors and (B) general principles of equity, whether enforcement is sought in a proceeding in equity or at law.  All requisite corporate action has been taken by the Servicer to make this Agreement valid and binding upon the Servicer in accordance with its terms.

(ii)               No consent, approval, authorization or order is required for the transactions contemplated by this Agreement from any court, governmental agency or body, or federal or state regulatory authority having jurisdiction over the Servicer is required or, if required, such consent, approval, authorization or order has been or will, prior to the Closing Date, be obtained.

(iii)              The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Servicer and will not result in the breach of

 

 

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any term or provision of the charter or by-laws of the Servicer or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which the Servicer or its property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject.

(iv)              There is no action, suit, proceeding or investigation pending or, to the best knowledge of the Servicer, threatened against the Servicer which, either individually or in the aggregate, would result in any material adverse change in the business, operations, financial condition, properties or assets of the Servicer, or in any material impairment of the right or ability of the Servicer to carry on its business substantially as now conducted or which would draw into question the validity of this Agreement or the Mortgage Loans or of any action taken or to be taken in connection with the obligations of the Servicer contemplated herein, or which would materially impair the ability of the Servicer to perform under the terms of this Agreement.

The representations and warranties made pursuant to this Section 2.03 shall survive delivery of the respective Mortgage Files to the Trustee for the benefit of the Certificateholders.

Section 2.04.  Representations and Warranties of the Depositor as to the Mortgage Loans.

The Depositor hereby represents and warrants to the Trustee with respect to the Mortgage Loans or each Mortgage Loan, as the case may be, as of the date hereof or such other date set forth herein that as of the Closing Date:

(i)                The information set forth in the Mortgage Loan Schedule is true and correct in all material respects.

(ii)               There are no delinquent taxes, ground rents, governmental assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the lien priority of the related Mortgaged Property.

(iii)              The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments, recorded in the applicable public recording office if necessary to maintain the lien priority of the Mortgage, and which have been delivered to the Trustee; the substance of any such waiver, alteration or modification has been approved by the insurer under the Primary Insurance Policy, if any, the title insurer, to the extent required by the related policy, and is reflected on the Mortgage Loan Schedule.  No instrument of waiver, alteration or modification has been executed, and no Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the
 insurer under the Primary Insurance Policy, if any, the title insurer, to the extent required by the policy, and which assumption agreement has been delivered to the Trustee.

 

 

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(iv)              The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note and the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto.

(v)               All buildings upon the Mortgaged Property are insured by an insurer generally acceptable to prudent mortgage lending institutions against loss by fire, hazards of extended coverage and such other hazards as are customary in the area the Mortgaged Property is located, pursuant to insurance policies conforming to the requirements of Customary Servicing Procedures and this Agreement.  All such insurance policies contain a standard mortgagee clause naming the originator of the Mortgage Loan, its successors and assigns as mortgagee and all premiums thereon have been paid.  If the Mortgaged Property is in an area identified on a flood hazard map or flood insurance rate map issued by the Federal Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect which policy conforms to the requirements of FNMA or FHLMC. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to maintain such insurance at Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor.

(vi)              Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protections, equal credit opportunity or disclosure laws applicable to the origination and servicing of Mortgage Loan have been complied with.

(vii)             The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part (other than as to Principal Prepayments in full which may have been received prior to the Closing Date), and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, cancellation, subordination, rescission or release.

(viii)            The Mortgage is a valid, existing and enforceable first lien on the Mortgaged Property, including all improvements on the Mortgaged Property subject only to (A) the lien of current real property taxes and assessments not yet due and payable, (B) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording being acceptable to mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and which do not adversely affect the Appraised Value of the Mortgaged Property, (C) if the Mortgaged Property consists of Co-op Shares, any
 lien for amounts due to the cooperative housing corporation for unpaid assessments or charges or any lien of any assignment of rents or maintenance expenses secured by the real property owned by the cooperative housing corporation, and (D) other matters to 

 

 

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which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.  Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, existing and enforceable first lien and first priority security interest on the property described therein and the Depositor has the full right to sell and assign the same to the Trustee.

(ix)              The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms except as enforceability may be limited by (A) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws affecting the enforcement of the rights of creditors and (B) general principles of equity, whether enforcement is sought in a proceeding in equity or at law.

(x)               All parties to the Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties.

(xi)              The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor and there is no obligation for the Mortgagee to advance additional funds thereunder and any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been complied with.  All costs fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage have been paid, and the Mortgagor is not entitled to any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage.

(xii)             To the best of the Depositor’s knowledge, all parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) in compliance with any and all applicable “doing business” and licensing requirements of the laws of the state wherein the Mortgaged Property is located.

(xiii)            The Mortgage Loan is covered by an ALTA lender’s title insurance policy, acceptable to FNMA or FHLMC, issued by a title insurer acceptable to FNMA or FHLMC and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to the exceptions contained in (viii)(A) and (B) above) the Seller, its successors and assigns as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan.  The Depositor is the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement.  No claims have been made under
such lender’s title insurance policy, and the Depositor has not done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy.

 

 

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(xiv)            There is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the Seller has not waived any default, breach, violation or event of acceleration.

(xv)             As of the date of origination of the Mortgage Loan, there had been no mechanics’ or similar liens or claims filed for work, labor or material (and no rights are outstanding that under law could give rise to such lien) affecting the relating Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage.

(xvi)            All improvements which were considered in determining the Appraised Value of the related Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property.

(xvii)           The Mortgage Loan was originated by a commercial bank or similar banking institution which is supervised and examined by a federal or state authority, or by a mortgagee approved by the Secretary of HUD.

(xviii)          Principal payments on the Mortgage Loan commenced no more than sixty days after the proceeds of the Mortgaged Loan were disbursed.  The Mortgage Loans are 30-year fixed rate mortgage loans having an original term to maturity of not more than 30 years, with interest payable in arrears on the first day of the month.  Each Mortgage Note requires a monthly payment which is sufficient to fully amortize the original principal balance over the original term thereof and to pay interest at the related Mortgage Interest Rate.  The Mortgage Note does not permit negative amortization.

(xix)            There is no proceeding pending or, to the Depositor’s knowledge, threatened for the total or partial condemnation of the Mortgaged Property and such property is in good repair and is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended.

(xx)             The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including (A) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (B) otherwise by judicial foreclosure.  To the best of the Depositor’s knowledge, following the date of origination of the Mortgage Loan, the Mortgaged Property has not been subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed for protection under applicable bankruptcy
 laws.  There is no homestead or other exemption or right available to the Mortgagor or any other person which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage. 

 

 

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(xxi)            The Mortgage Note and Mortgage are on forms acceptable to FNMA or FHLMC.

(xxii)           The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage on the Mortgaged Property and the security interest of any applicable security agreement or chattel mortgage referred to in (viii) above.

(xxiii)          The Mortgage File contains an appraisal of the related Mortgaged Property, in a form acceptable to FNMA or FHLMC and such appraisal complies with the requirements of FIRREA, and was made and signed, prior to the approval of the Mortgage Loan application, by a Qualified Appraiser.

(xxiv)         In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves, and no fees or expenses are or will become payable by the Trustee to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.

(xxv)          No Mortgage Loan is a graduated payment mortgage loan, no Mortgage Loan has a shared appreciation or other contingent interest feature, and no Mortgage Loan contains any “buydown” provision.

(xxvi)         The Mortgagor has received all disclosure materials required by applicable law with respect to the making of mortgage loans of the same type as the Mortgage Loan and rescission materials required by applicable law if the Mortgage Loan is a Refinance Mortgage Loan.

(xxvii)        Each Mortgage Loan with a Loan-to-Value Ratio at origination in excess of 80% will be subject to a Primary Insurance Policy, issued by an insurer acceptable to FNMA or FHLMC, which insures that portion of the Mortgage Loan in excess of the portion of the Appraised Value of the Mortgaged Property required by FNMA.  All provisions of such Primary Insurance Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid.  Any Mortgage subject to any such Primary Insurance Policy obligates the Mortgagor thereunder to maintain such insurance and to pay all premiums and charges in connection therewith at least until Loan-to-Value Ratio of such Mortgage Loan is reduced to less than 80%.  The Mortgage Interest Rate
for the Mortgage Loan does not include any such insurance premium.

(xxviii)        To the best of the Depositor’s knowledge as of the date of origination of the Mortgage Loan, (A) the Mortgaged Property is lawfully occupied under applicable law, (B) all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use
and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities and (C) no improvement located on or part of the Mortgaged Property is in violation of any zoning law or regulation. 

 

 

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(xxix)         The Assignment of Mortgage (except with respect to any Mortgage that has been recorded in the name of MERS or its designee) is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.

(xxx)          All payments required to be made prior to the Cut-Off Date for such Mortgage Loan under the terms of the Mortgage Note have been made and no Mortgage Loan has been more than 30 days delinquent more than once in the twelve month period immediately prior to the Cut-Off Date.

(xxxi)         With respect to each Mortgage Loan, the Depositor or Servicer is in possession of a complete Mortgage File except for the documents which have been delivered to the Trustee or which have been submitted for recording and not yet returned.

(xxxii)        Immediately prior to the transfer and assignment contemplated herein, the Depositor was the sole owner and holder of the Mortgage Loans.  The Mortgage Loans were not assigned or pledged by the Depositor and the Depositor had good and marketable title thereto, and the Depositor had full right to transfer and sell the Mortgage Loans to the Trustee free and clear of any encumbrance, participation interest, lien, equity, pledge, claim or security interest and had full right and authority subject to no interest or participation in, or agreement with any other party to sell or otherwise transfer the Mortgage Loans.

(xxxiii)          Any future advances made prior to the Cut-Off Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term.  The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to FNMA and FHLMC.  The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.

(xxxiv)       The Mortgage Loan was underwritten in accordance with the applicable Underwriting Guidelines in effect at the time of origination with exceptions thereto exercised in a reasonable manner.

(xxxv)        If the Mortgage Loan is secured by a long-term residential lease, (1) the lessor under the lease holds a fee simple interest in the land; (2) the terms of such lease expressly permit the mortgaging of the leasehold estate, the assignment of the lease without the lessor’s consent and the acquisition by the holder of the Mortgage of the rights of the lessee upon foreclosure or assignment in lieu of foreclosure or provide the holder of the Mortgage with substantially similar protections; (3) the terms of such lease do not (a) allow the termination thereof upon the lessee’s default without the holder of
the Mortgage being entitled to receive written notice of, and opportunity to cure, such default, (b) allow the termination of the lease in the event of damage or destruction as long as the Mortgage is in existence, (c) prohibit the holder of the Mortgage from being insured (or receiving proceeds of insurance) under the hazard insurance policy or policies

 

 

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 relating to the Mortgaged Property or (d) permit any increase in the rent other than pre-established increases set forth in the lease; (4) the original term of such lease in not less than 15 years; (5) the term of such lease does not terminate earlier than five years after the maturity date of the Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction in which the use of leasehold estates in transferring ownership in residential properties is a widely accepted practice.

(xxxvi)       The Mortgaged Property is located in the state identified in the Mortgage Loan Schedule and consists of a parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit, or an individual unit in a planned unit development, or, in the case of Mortgage Loans secured by Co-op Shares, leases or occupancy agreements; provided, however, that any condominium project or planned unit development generally conforms with the applicable Underwriting Guidelines regarding such dwellings, and no residence or dwelling is a mobile home or a manufactured dwelling.

(xxxvii)      The Depositor used no adverse selection procedures in selecting the Mortgage Loan for inclusion in the Trust Estate.

(xxxviii)    Each Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the Code.

(xxxix)       With respect to each Mortgage where a lost note affidavit has been delivered to the Trustee in place of the related Mortgage Note, the related Mortgage Note is no longer in existence.

Notwithstanding the foregoing, no representations or warranties are made by the Depositor as to the environmental condition of any Mortgaged Property; the absence, presence or effect of hazardous wastes or hazardous substances on any Mortgaged Property; any casualty resulting from the presence or effect of hazardous wastes or hazardous substances on, near or emanating from any Mortgaged Property; the impact on Certificateholders of any environmental condition or presence of any hazardous substance on or near any Mortgaged Property; or the compliance of any Mortgaged Property with any environmental laws, nor is any agent, Person or entity otherwise affiliated with the Depositor authorized or able to make any such representation, warranty or assumption of liability relative to any Mortgaged Property.  In addition, no representations or warranties are made by the Depositor with respect to the
absence or effect of fraud in the origination of any Mortgage Loan.

It is understood and agreed that the representations and warranties set forth in this Section 2.04 shall survive delivery of the respective Mortgage Files to the Trustee or the Custodian and shall inure to the benefit of the Trustee, notwithstanding any restrictive or qualified endorsement or assignment.

Upon discovery by either the Depositor, the Servicer, the Trustee or the Custodian that any of the representations and warranties set forth in this Section 2.04 is not accurate (referred to herein as a “breach”) and that such breach materially and adversely affects the interests of the Certificateholders in the related Mortgage Loan, the party discovering such

 

 

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 breach shall give prompt written notice to the other parties (any Custodian being so obligated under a Custodial Agreement); provided that any such breach that causes the Mortgage Loan not to be a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code shall be deemed to materially and adversely affect the interests of the Certificateholders.  Within 90 days of its discovery or its receipt of notice of
any such breach, the Depositor shall cure such breach in all material respects or shall either (i) repurchase the Mortgage Loan or any property acquired in respect thereof from the Trustee at a price equal to the Repurchase Price or (ii) if within two years of the Closing Date, substitute for such Mortgage Loan in the manner described in Section 2.02; provided that if the breach would cause the Mortgage Loan to be other than a “qualified mortgage” as defined in Section 860G(a)(3) of the Code, any such repurchase or substitution must occur within 90 days from the date the breach was discovered.  The Repurchase Price of any repurchase described in this paragraph and the Substitution Adjustment Amount, if any, shall be deposited in the Certificate Account.  It is understood and agreed that the obligation of the Depositor to repurchase or substitute for any Mortgage Loan or Mortgaged Property as to which such a breach has occurred
and is continuing shall constitute the sole remedy respecting such breach available to Certificateholders, or to the Trustee on behalf of Certificateholders, and such obligation shall survive until termination of the Trust hereunder.

Section 2.05.  Designation of Interests in the REMIC.  The Depositor hereby designates the Classes of Class A Certificates (other than the Class A-R and Class A-LR Certificates) and the Classes of Class B Certificates as classes of “regular interests” and the Class A-R Certificate as the single class of “residual interest” in the Upper-Tier REMIC for the purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively. The Depositor hereby further designates the Class A-L1 Interest, Class A-L3 Interest, Class A-L4 Interest, Class A-LPO Interest, Class A-LUR Interest, Class A-LWIO Interest, Class B-L1 Interest, Class B-L2 Interest, Class B-L3 Interest, Class B-L4 Interest, Class B-L5 Interest and Class B-L6 Interest as classes of “regular interests” and the Class A-LR Certificate as the single class of
“residual interest” in the Lower-Tier REMIC for the purposes of Code Sections 860G(a)(1) and 860G(a)(2), respectively.

Section 2.06.  Designation of Start-up Day.  The Closing Date is hereby designated as the “start-up day” of each of the Upper-Tier REMIC and Lower-Tier REMIC within the meaning of Section 860G(a)(9) of the Code.

Section 2.07.  REMIC Certificate Maturity Date.  Solely for purposes of satisfying Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the “latest possible maturity date” of the regular interests in the Upper-Tier REMIC and Lower-Tier REMIC is [______], 20 .

Section 2.08.  Execution and Delivery of Certificates.  The Trustee (i) acknowledges the issuance of and hereby declares that it holds the Uncertificated Lower-Tier Interests on behalf of the Upper-Tier REMIC and the Certificateholders and (ii) has executed and delivered to or upon the order of the Depositor, in exchange for the Mortgage Loans and Uncertificated Lower-Tier Interests together with all other assets included in the definition of
“Trust Estate,” receipt of which is hereby acknowledged, Certificates in authorized denominations which, together with the Uncertificated Lower-Tier Interests, evidence ownership of the entire Trust Estate.

 

 

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ARTICLE III

 

ADMINISTRATION AND SERVICING

OF MORTGAGE LOANS

Section 3.01.  Servicer to Service Mortgage Loans.  For and on behalf of the Certificateholders, the Servicer shall service and administer the Mortgage Loans, all in accordance with the terms of this Agreement, Customary Servicing Procedures, applicable law and the terms of the Mortgage Notes and Mortgages.  In connection with such servicing and administration, the Servicer shall have full power and authority, acting alone and/or through Subservicers as provided in Section 3.02, to do or cause to be done any and all things that it may deem necessary or desirable in connection with such servicing and administration including, but not limited to, the power and authority, subject to the terms hereof, (a) to execute and deliver, on behalf of the Certificateholders and the Trustee, customary consents or waivers and other instruments and documents,
(b) to consent, with respect to the Mortgage Loans it services, to transfers of any Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages (but only in the manner provided in this Agreement), (c) to collect any Insurance Proceeds and other Liquidation Proceeds relating to the Mortgage Loans it services, and (d) to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan it services. The Servicer shall represent and protect the interests of the Trust in the same manner as it protects its own interests in mortgage loans in its own portfolio in any claim, proceeding or litigation regarding a Mortgage Loan and shall not make or permit any modification, waiver or amendment of any term of any Mortgage Loan, except as provided pursuant to Section 3.21.  Without limiting the generality of the foregoing, the Servicer, in its own name or in the name of any Subservicer or the Depositor and the Trustee, is hereby
authorized and empowered by the Depositor and the Trustee, when the Servicer or any Subservicer, as the case may be, believes it appropriate in its reasonable judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Mortgage Loans it services, and with respect to the related Mortgaged Properties held for the benefit of the Certificateholders. The Servicer shall prepare and deliver to the Depositor and/or the Trustee such documents requiring execution and delivery by either or both of them as are necessary or appropriate to enable the Servicer to service and administer the Mortgage Loans it services to the extent that the Servicer is not permitted to execute and deliver such documents pursuant to the preceding sentence.  Upon receipt of such documents, the Depositor and/or
the Trustee, upon the direction of the Servicer, shall promptly execute such documents and deliver them to the Servicer.

In accordance with the standards of the preceding paragraph, the Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and assessments on the Mortgaged Properties relating to the Mortgage Loans it services, which Servicing Advances shall be reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11.  The costs incurred by the Servicer, if any, in effecting the timely payments of taxes and assessments on the Mortgaged Properties and related insurance premiums shall not, for the purpose of calculating monthly distributions to the Certificateholders, be added to the Stated Principal Balances of the related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.

 

 

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The relationship of the Servicer (and of any successor to the Servicer as servicer under this Agreement) to the Trustee under this Agreement is intended by the parties to be that of an independent contractor and not that of a joint venturer, partner or agent.

Section 3.02.  Subservicing; Enforcement of the Obligations of Servicer.

(a)               The Servicer may arrange for the subservicing of any Mortgage Loan it services by a Subservicer pursuant to a Subservicing Agreement; provided, however, that such subservicing arrangement and the terms of the related Subservicing Agreement must provide for the servicing of such Mortgage Loan in a manner consistent with the servicing arrangements contemplated hereunder.  Notwithstanding the provisions of any Subservicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the Servicer and a Subservicer or reference to actions taken through a Subservicer or otherwise, the Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and administration of the Mortgage Loans it services in accordance with the provisions of this Agreement without diminution of such obligation or liability by virtue of such Subservicing Agreements or arrangements or by virtue of indemnification from the Subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering those Mortgage Loans.  All actions of each Subservicer performed pursuant to the related Subservicing Agreement shall be performed as agent of the Servicer with the same force and effect as if performed directly by the Servicer.

(b)               For purposes of this Agreement, the Servicer shall be deemed to have received any collections, recoveries or payments with respect to the Mortgage Loans it services that are received by a Subservicer regardless of whether such payments are remitted by the Subservicer to the Servicer.

(c)               As part of its servicing activities hereunder, the Servicer, for the benefit of the Trustee and the Certificateholders, shall use its best reasonable efforts to enforce the obligations of each Subservicer engaged by the Servicer under the related Subservicing Agreement, to the extent that the non-performance of any such obligation would have a material and adverse effect on a Mortgage Loan.  Such enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing Agreements and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans.  The Servicer
shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or attorneys fees against the party against whom such enforcement is directed.

(d)               Any Subservicing Agreement entered into by the Servicer shall provide that it may be assumed or terminated by the Trustee, if the Trustee has assumed the duties of the Servicer, or any successor Servicer, at the Trustee’s or successor Servicer’s option, as applicable, without cost or obligation to the assuming or terminating party or the Trust Estate, upon the assumption by such party of the obligations of the Servicer pursuant to Section 8.05.

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Any Subservicing Agreement, and any other transactions or services relating to the Mortgage Loans involving a Subservicer, shall be deemed to be between the Servicer and such Subservicer alone, and the Trustee and the Certificateholders shall not be deemed parties thereto and shall have no claims or rights of action against, rights, obligations, duties or liabilities to or with respect to the Subservicer or its officers, directors or employees, except as set forth in Section 3.01.

Section 3.03.  Fidelity Bond; Errors and Omissions Insurance.

The Servicer shall maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy, with broad coverage on all officers, employees or other persons acting in any capacity requiring such persons to handle funds, money, documents or papers relating to the Mortgage Loans it services.  These policies must insure the Servicer against losses resulting from dishonest or fraudulent acts committed by the Servicer’s personnel, any employees of outside firms that provide data processing services for the Servicer, and temporary contract employees or student interns.  Such fidelity bond shall also protect and insure the Servicer against losses in connection with the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby.  No provision of this Section 3.03 requiring such fidelity bond and errors and
omissions insurance shall diminish or relieve the Servicer from its duties and obligations as set forth in this Agreement.  The minimum coverage under any such bond and insurance policy shall be at least equal to the corresponding amounts required by FNMA in the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers’ & Servicers’ Guide, as amended or restated from time to time, or in an amount as may be permitted to the Servicer by express waiver of FNMA or FHLMC.

Section 3.04.  Access to Certain Documentation.

The Servicer shall provide to the OTS and the FDIC and to comparable regulatory authorities supervising Holders of Subordinate Certificates and the examiners and supervisory agents of the OTS, the FDIC and such other authorities, access to the documentation required by applicable regulations of the OTS and the FDIC with respect to the Mortgage Loans.  Such access shall be afforded without charge, but only upon reasonable and prior written request and during normal business hours at the offices designated by the Servicer.  Nothing in this Section 3.04 shall limit the obligation of the Servicer to observe any applicable law and the failure of the Servicer to provide access as provided in this Section 3.04 as a result of such obligation shall not constitute a breach of this Section 3.04.

Section 3.05.  Maintenance of Primary Mortgage Insurance Policy; Claims.

With respect to each Mortgage Loan with a Loan-to-Value Ratio in excess of 80% or such other Loan-to-Value Ratio as may be required by law, the Servicer responsible for servicing such Mortgage Loan shall, without any cost to the Trust Estate, maintain or cause the Mortgagor to maintain in full force and effect a Primary Insurance Policy insuring that portion of the Mortgage Loan in excess of a percentage in conformity with FNMA requirements.  The Servicer shall pay or shall cause the Mortgagor to pay the premium thereon on a timely basis, at least until the Loan-to-Value Ratio of such Mortgage Loan is reduced to 80% or such other Loan-to-Value Ratio as may be required by law.  If such Primary Insurance Policy is terminated,

 

 

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 the Servicer shall obtain from another insurer a comparable replacement policy, with a total coverage equal to the remaining coverage of such terminated Primary Insurance Policy.  If the insurer shall cease to be an insurer acceptable to FNMA, the Servicer shall notify the Trustee in writing, it being understood that the Servicer shall not have any
responsibility or liability for any failure to recover under the Primary Insurance Policy for such reason.  If the Servicer determines that recoveries under the Primary Insurance Policy are jeopardized by the financial condition of the insurer, the Servicer shall obtain from another insurer which meets the requirements of this Section 3.05 a replacement insurance policy.  The Servicer shall not take any action that would result in noncoverage under any applicable Primary Insurance Policy of any loss that, but for the actions of the Servicer, would have been covered thereunder.  In connection with any assumption or substitution agreement entered into or to be entered into pursuant to Section 3.13, the Servicer shall promptly notify the insurer under the related Primary Insurance Policy, if any, of such assumption or substitution of liability in accordance with the terms of such Primary Insurance Policy and shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under such Primary Insurance Policy.  If such Primary Insurance Policy is terminated as a result of such assumption or substitution of liability, the Servicer shall obtain a replacement Primary Insurance Policy as provided above.

In connection with its activities as servicer, the Servicer agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims to the insurer under any Primary Insurance Policy in a timely fashion in accordance with the terms of such Primary Insurance Policy and, in this regard, to take such action as shall be necessary to permit recovery under any Primary Insurance Policy respecting a defaulted Mortgage Loan.  Pursuant to Section 3.09(a), any amounts collected by the Servicer under any Primary Insurance Policy shall be deposited in the related Escrow Account, subject to withdrawal pursuant to Section 3.09(b).

The Servicer will comply with all provisions of applicable state and federal law relating to the cancellation of, or collection of premiums with respect to, Primary Mortgage Insurance, including, but not limited to, the provisions of the Homeowners Protection Act of 1998, and all regulations promulgated thereunder, as amended from time to time.

Section 3.06.  Rights of the Depositor and the Trustee in Respect of the Servicer.

The Depositor may, but is not obligated to, enforce the obligations of the Servicer hereunder and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the Servicer hereunder and in connection with any such defaulted obligation to exercise the related rights of the Servicer hereunder; provided that the Servicer shall not be relieved of any of its obligations hereunder by virtue of such performance by the Depositor or its designee.  Neither the Trustee nor the Depositor shall have any responsibility or liability for any action or failure to act by the Servicer nor shall the Trustee or the Depositor be obligated to supervise the performance of the Servicer hereunder or otherwise.

Any Subservicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Subservicer in its capacity as such shall be deemed to be between the Subservicer and the Servicer alone, and the Trustee and Certificateholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Subservicer except as set forth in Section 3.07. The Servicer shall be solely liable for all fees owed by it to any Subservicer, irrespective of whether the Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.

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Section 3.07.  Trustee to Act as Servicer.

If the Servicer shall for any reason no longer be the Servicer hereunder (including by reason of an Event of Default), the Trustee shall thereupon assume, if it so elects, or shall appoint a successor Servicer to assume, all of the rights and obligations of the Servicer hereunder arising thereafter (except that the Trustee shall not be (a) liable for losses of the Servicer pursuant to Section 3.12 or any acts or omissions of the predecessor Servicer hereunder, (b) obligated to make Advances if it is prohibited from doing so by applicable law or (c) deemed to have made any representations and warranties of the Servicer hereunder).  Any such assumption shall be subject to Section 7.02.  If the Servicer shall for any reason no longer be the Servicer (including by reason of any Event of Default), the Trustee or the successor Servicer may elect to succeed to any rights and obligations of
the Servicer under each Subservicing Agreement or may terminate each Subservicing Agreement.  If it has elected to assume the Subservicing Agreement, the Trustee or the successor Servicer shall be deemed to have assumed all of the Servicer’s interest therein and to have replaced the Servicer as a party to any Subservicing Agreement entered into by the Servicer as contemplated by Section 3.02 to the same extent as if the Subservicing Agreement had been assigned to the assuming party except that the Servicer shall not be relieved of any liability or obligations under any such Subservicing Agreement.

The Servicer that is no longer the Servicer hereunder shall, upon request of the Trustee, but at the expense of the Servicer, deliver to the assuming party all documents and records relating to each Subservicing Agreement or substitute servicing agreement and the Mortgage Loans then being serviced thereunder and an accounting of amounts collected or held by it and otherwise use its best efforts to effect the orderly and efficient transfer of such substitute Subservicing Agreement to the assuming party.

Section 3.08.  Collection of Mortgage Loan Payments; Servicer Custodial Account; Certificate Account; and Upper-Tier Certificate Account.

(a)               Continuously from the date hereof until the principal and interest on all Mortgage Loans are paid in full, the Servicer will proceed diligently, in accordance with this Agreement, to collect all payments due under each of the Mortgage Loans it services when the same shall become due and payable.  Further, the Servicer will in accordance with all applicable law and Customary Servicing Procedures ascertain and estimate taxes, assessments, fire and hazard insurance premiums, mortgage insurance premiums and all other charges with respect to the Mortgage Loans it services that, as provided in any Mortgage, will become due and payable to the end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and
payable.  Consistent with the foregoing, the Servicer may in its discretion (i) waive any late payment charge or any prepayment charge or penalty interest in connection with the prepayment of a Mortgage Loan it services and (ii) extend the due dates for payments due on a Mortgage Note for a period not greater than 120 days; provided, however, that the Servicer cannot extend the maturity of any such Mortgage Loan past the date on which the final payment is due on the latest maturing Mortgage Loan as of the Cut-Off Date.  In the event of any such arrangement, the Servicer shall make Periodic Advances on the related

 

 

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 Mortgage Loan in accordance with the provisions of Section 3.20 during the scheduled period in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangements.  The Servicer shall not be required to institute or join in litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with respect to a taking or condemnation) if it reasonably believes that enforcing the provision of the Mortgage or other instrument pursuant to which such payment is required is prohibited by applicable law.

(b)               The Servicer shall establish and maintain the Servicer Custodial Account.  The Servicer shall deposit or cause to be deposited into the Servicer Custodial Account, all on a daily basis within one Business Day of receipt, except as otherwise specifically provided herein, the following payments and collections remitted by Subservicers or received by the Servicer in respect of the Mortgage Loans subsequent to the Cut-Off Date (other than in respect of principal and interest due on the Mortgage Loans on or before the Cut-Off Date) and the following amounts required to be deposited hereunder with respect to the Mortgage Loans it services:

(i)                all payments on account of principal of the Mortgage Loans, including Principal Prepayments;

(ii)               all payments on account of interest on the Mortgage Loans, net of the Servicing Fee;

(iii)              (A) all Insurance Proceeds and Liquidation Proceeds, other than Insurance Proceeds to be (1) applied to the restoration or repair of the Mortgaged Property, (2) released to the Mortgagor in accordance with Customary Servicing Procedures or (3) required to be deposited to an Escrow Account pursuant to Section 3.09(a) and (B) any Insurance Proceeds released from an Escrow Account pursuant to Section 3.09(b)(iv);

(iv)              any amount required to be deposited by the Servicer pursuant to Section 3.08(d) in connection with any losses on Permitted Investments with respect to the Servicer Custodial Account;

(v)               any amounts required to be deposited by the Servicer pursuant to Section 3.14;

(vi)              all Repurchase Prices and all Substitution Adjustment Amounts received by the Servicer;

(vii)             Periodic Advances made by the Servicer pursuant to Section 3.20 and any payments of Compensating Interest; and

	
            (viii)
 	
            any other amounts required to be deposited hereunder.
 

 The foregoing requirements for deposits to the Servicer Custodial Account by the Servicer shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of prepayment penalties, late payment charges or assumption fees, if collected, need not be deposited by the Servicer.  If the Servicer shall deposit

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in the Servicer Custodial Account any amount not required to be deposited, it may at any time withdraw or direct the institution maintaining the Servicer Custodial Account to withdraw such amount from the Servicer Custodial Account, any provision herein to the contrary notwithstanding. The Servicer Custodial Account may contain funds that belong to one or more trust funds created for mortgage pass-through certificates of other series and may contain other funds respecting payments on mortgage loans belonging to the Servicer or
serviced by the Servicer on behalf of others.  Notwithstanding such commingling of funds, the Servicer shall keep records that accurately reflect the funds on deposit in the Servicer Custodial Account that have been identified by it as being attributable to the Mortgage Loans it services. The Servicer shall maintain adequate records with respect to all withdrawals made pursuant to this Section 3.08.  All funds required to be deposited in the Servicer Custodial Account shall be held in trust for the Certificateholders until withdrawn in accordance with Section 3.11.

(c)               The Trustee shall establish and maintain, on behalf of the Certificateholders, the Certificate Account.  The Trustee shall, promptly upon receipt, deposit in the Certificate Account and retain therein the following:

(i)              the aggregate amount remitted by the Servicer to the Trustee pursuant to Section 3.11(a)(viii);

(ii)               any amount paid by the Trustee pursuant to Section 3.08(d) in connection with any losses on Permitted Investments with respect to the Certificate Account; and

(iii)              any other amounts deposited hereunder which are required to be deposited in the Certificate Account.

If the Servicer shall remit any amount not required to be remitted, it may at any time direct the Trustee to withdraw such amount from the Certificate Account, any provision herein to the contrary notwithstanding.  Such direction may be accomplished by delivering an Officer’s Certificate to the Trustee which describes the amounts deposited in error in the Certificate Account.  All funds required to be deposited in the Certificate Account shall be held by the Trustee in trust for the Certificateholders until disbursed in accordance with this Agreement or withdrawn in accordance with Section 3.11.  In no event shall the Trustee incur liability for withdrawals from the Certificate Account at the direction of a the Servicer.

(d)               Each institution at which the Servicer Custodial Account or the Certificate Account is maintained shall invest the funds therein as directed in writing by the Servicer in Permitted Investments, which shall mature not later than (i) in the case of the Servicer Custodial Account, the Business Day next preceding the related Remittance Date (except that if such Permitted Investment is an obligation of the institution that maintains such account, then such Permitted Investment shall mature not later than such Remittance Date) and (ii) in the case of the Certificate Account, the Business Day next preceding the Distribution Date (except that if such Permitted Investment is an obligation of the institution that maintains such account, then such Permitted Investment shall mature not
later than such Distribution Date) and, in each case, shall not be sold or disposed of prior to its maturity.  All such Permitted Investments shall be made in the name of the Trustee, for the benefit of the Certificateholders.  All income or gain (net of any losses) realized from any such investment of funds on deposit in the Servicer Custodial Account

 

 

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 shall be for the benefit of the Servicer as servicing compensation and shall be retained by it monthly as provided herein.  All income or gain (net of any losses) realized from any such investment of funds on deposit in the Certificate Account shall be for the benefit of the Trustee as additional compensation and shall be retained by it monthly as provided herein.  The amount of any losses realized in the Servicer Custodial Account or the Certificate Account incurred in any such account in respect of any such investments
shall promptly be deposited by the Servicer in the Servicer Custodial Account or by the Trustee in the Certificate Account, as applicable.

(e)               The Servicer shall give notice to the Trustee of any proposed change of the location of the Servicer Custodial Account maintained by the Servicer not later than 30 days and not more than 45 days prior to any change thereof.  The Trustee shall give notice to the Servicer, each Rating Agency and the Depositor of any proposed change of the location of the Certificate Account not later than 30 days and not more than 45 days prior to any change thereof.  The creation of the Servicer Custodial Account shall be evidenced by a certification substantially in the form of Exhibit F hereto.  A copy of such certification shall be furnished to the Trustee.

(f)                The Trustee shall establish and maintain the Upper-Tier Certificate Account.  On each Distribution Date (other than the Final Distribution Date, if such Final Distribution Date is in connection with a purchase of the assets of the Trust Estate by the Depositor), the Trustee shall, from funds available on deposit in the Certificate Account, deposit, in immediately available funds, by wire transfer or otherwise, into the Upper-Tier Certificate Account, the Lower-Tier Distribution Amount.

Section 3.09.  Collection of Taxes, Assessments and Similar Items; Escrow Accounts.

(a)               To the extent required by the related Mortgage Note and not violative of current law, the Servicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan which constitute Escrow Payments in trust separate and apart from any of its own funds and general assets and for such purpose shall establish and maintain one or more escrow accounts (collectively, the “Escrow Account”), titled “[Insert name of Servicer], in trust for registered holders of Wachovia Mortgage Loan Trust, LLC Mortgage Pass-Through Certificates, Series 200  -   and various Mortgagors.”  The Escrow Account shall be established with a commercial bank, a savings bank or a
savings and loan association that meets the guidelines set forth by FNMA or FHLMC as an eligible institution for escrow accounts and which is a member of the Automated Clearing House.  In any case, the Escrow Account shall be insured by the FDIC to the fullest extent permitted by law.  The Servicer shall deposit in the appropriate Escrow Account on a daily basis, and retain therein: (i) all Escrow Payments collected on account of the Mortgage Loans, (ii) all amounts representing proceeds of any hazard insurance policy which are to be applied to the restoration or repair of any related Mortgaged Property and (iii) all amounts representing proceeds of any Primary Insurance Policy. Nothing herein shall require the Servicer to compel a Mortgagor to establish an Escrow Account in violation of applicable law.

(b)               Withdrawals of amounts so collected from the Escrow Accounts may be made by the Servicer only (i) to effect timely payment of taxes, assessments, mortgage insurance premiums, fire and hazard insurance premiums, condominium or PUD association dues, or

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 comparable items constituting Escrow Payments for the related Mortgage, (ii) to reimburse the Servicer out of related Escrow Payments made with respect to a Mortgage Loan for any Servicing Advance made by the Servicer pursuant to Section 3.09(c) with respect to such Mortgage Loan, (iii) to refund to any Mortgagor any sums determined to be overages, (iv) for transfer to the Servicer Custodial Account upon default of a Mortgagor or in accordance with the terms of the related Mortgage Loan and if permitted
by applicable law, (v) for application to restore or repair the Mortgaged Property, (vi) to pay to the Mortgagor, to the extent required by law, any interest paid on the funds deposited in the Escrow Account, (vii) to pay to itself any interest earned on funds deposited in the Escrow Account (and not required to be paid to the Mortgagor), (viii) to the extent permitted under the terms of the related Mortgage Note and applicable law, to pay late fees with respect to any Monthly Payment which is received after the applicable grace period, (ix) to withdraw suspense payments that are deposited into the Escrow Account, (x) to withdraw any amounts inadvertently deposited in the Escrow Account or (xi) to clear and terminate the Escrow Account upon the termination of this Agreement in accordance with Section 10.01.  Any Escrow Account shall not be a part of the Trust Estate.

(c)               With respect to each Mortgage Loan, the Servicer shall maintain accurate records reflecting the status of taxes, assessments and other charges which are or may become a lien upon the Mortgaged Property and the status of Primary Insurance Policy premiums and fire and hazard insurance coverage. The Servicer shall obtain, from time to time, all bills for the payment of such charges (including renewal premiums) and shall effect payment thereof prior to the applicable penalty or termination date and at a time appropriate for securing maximum discounts allowable, employing for such purpose deposits of the Mortgagor in the Escrow Account, if any, which shall have been estimated and accumulated by the Servicer in amounts sufficient for such purposes, as allowed under
the terms of the Mortgage.  To the extent that a Mortgage does not provide for Escrow Payments, the Servicer shall determine that any such payments are made by the Mortgagor.  The Servicer assumes full responsibility for the timely payment of all such bills and shall effect timely payments of all such bills irrespective of each Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments.  The Servicer shall advance any such payments that are not timely paid, but the Servicer shall be required so to advance only to the extent that such Servicing Advances, in the good faith judgment of the Servicer, will be recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds or otherwise.

Section 3.10.  Access to Certain Documentation and Information Regarding the Mortgage Loans.

The Servicer shall afford the Trustee reasonable access to all records and documentation regarding the Mortgage Loans and all accounts, insurance information and other matters relating to this Agreement, such access being afforded without charge, but only upon reasonable request and during normal business hours at the office designated by the Servicer.

Upon reasonable advance notice in writing, the Servicer will provide to each Certificateholder which is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the Mortgage Loans sufficient to permit such Certificateholder to comply with applicable regulations of the OTS or other regulatory authorities with respect to investment in the Certificates; provided that the

 

 

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 Servicer shall be entitled to be reimbursed by each such Certificateholder for actual expenses incurred by the Servicer in providing such reports and access.

Section 3.11.  Permitted Withdrawals from the Servicer Custodial Account; Certificate Account and Upper-Tier Certificate Account.

(a)               The Servicer may from time to time make withdrawals from the Servicer Custodial Account, for the following purposes:

(i)                to pay to the Servicer (to the extent not previously retained), the servicing compensation to which it is entitled pursuant to Section 3.17, and to pay to the Servicer, as additional servicing compensation, earnings on or investment income with respect to funds in or credited to the Servicer Custodial Account;

(ii)               to reimburse the Servicer for unreimbursed Advances made by it, such right of reimbursement pursuant to this clause (ii) being limited to amounts received on the Mortgage Loan(s) in respect of which any such Advance was made;

(iii)              to reimburse the Servicer for any Nonrecoverable Advance previously made;

(iv)              to reimburse the Servicer for Insured Expenses from the related Insurance Proceeds;

(v)               to pay to the purchaser, with respect to each Mortgage Loan or REO Property that has been purchased pursuant to Section 2.02 or 2.04, all amounts received thereon after the date of such purchase;

(vi)              to reimburse the Servicer or the Depositor for expenses incurred by any of them and reimbursable pursuant to Section 7.03;

(vii)             to withdraw any amount deposited in the Servicer Custodial Account and not required to be deposited therein;

(viii)            on or prior to the Remittance Date, to withdraw an amount equal to the related Pool Distribution Amount, the related Trustee Fee and any other amounts due to the Trustee under this Agreement for such Distribution Date, to the extent on deposit, and remit such amount in immediately available funds to the Trustee for deposit in the Certificate Account; and

(ix)              to clear and terminate the Servicer Custodial Account upon termination of this Agreement pursuant to Section 10.01.

The Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Servicer Custodial Account pursuant to clauses (i), (ii), (iv) and (v).  Prior to making any withdrawal from the Servicer Custodial Account pursuant to clause (iii), the Servicer shall deliver to the Trustee an Officer’s Certificate of a Servicing Officer indicating the amount of any previous Advance

 

 

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 determined by the Servicer to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s) and their respective portions of such Nonrecoverable Advance.

(b)               The Trustee shall withdraw funds from the Certificate Account for distributions to Certificateholders in the manner specified in this Agreement.  In addition, the Trustee may from time to time make withdrawals from the Certificate Account for the following purposes:

(i)               to pay to itself the Trustee Fee and any other amounts due to the Trustee under this Agreement for the related Distribution Date;

(ii)              to pay to itself as additional compensation earnings on or investment income with respect to funds in the Certificate Account;

(iii)             to withdraw and return to the Servicer any amount deposited in the Certificate Account and not required to be deposited therein; and

(iv)            to clear and terminate the Certificate Account upon termination of the Agreement pursuant to Section 10.01.

(c)               Notwithstanding anything herein to the contrary, the Regular Certificates and the Class A-R Certificate shall not receive distributions directly from the Certificate Account.  On each Distribution Date, funds on deposit in the Upper-Tier Certificate Account shall be used to make payments on the Regular Certificates and the Class A-R Certificate as provided in Sections 5.01 and 5.02.  The Upper-Tier Certificate Account shall be cleared and terminated upon termination of this Agreement pursuant to Section 10.01.

Section 3.12.  Maintenance of Hazard Insurance.

The Servicer shall cause to be maintained for each Mortgage Loan, fire and hazard insurance with extended coverage customary in the area where the Mortgaged Property is located in an amount which is at least equal to the lesser of (a) the full insurable value of the Mortgaged Property or (b) the greater of (i) the outstanding principal balance owing on the Mortgage Loan and (ii) an amount such that the proceeds of such insurance shall be sufficient to avoid the application to the Mortgagor or loss payee of any coinsurance clause under the policy.  If the Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available) the Servicer will cause to be maintained a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance
Administration and the requirements of FNMA or FHLMC. The Servicer shall also maintain on REO Property, fire and hazard insurance with extended coverage in an amount which is at least equal to the maximum insurable value of the improvements which are a part of such property, liability insurance and, to the extent required, flood insurance in an amount required above.  Any amounts collected by the Servicer under any such policies (other than amounts to be deposited in an Escrow Account and applied to the restoration or repair of the property subject to the related Mortgage or property
acquired in liquidation of the Mortgage Loan, or to be released to the Mortgagor in accordance with Customary Servicing Procedures) shall be deposited in the Servicer Custodial Account, subject to withdrawal pursuant to Section 3.11(a).  It is understood and agreed that no earthquake

 

 

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 or other additional insurance need be required by the Servicer of any Mortgagor or maintained on REO Property, other than pursuant to such applicable laws and regulations as shall at any time be in force and as shall require such additional insurance.  All policies required hereunder shall be endorsed with standard mortgagee clauses with loss payable to the Servicer, and shall provide for at least 30 days prior written notice of any cancellation, reduction in amount or material change in coverage to the Servicer.

The hazard insurance policies for each Mortgage Loan secured by a unit in a condominium development or planned unit development shall be maintained with respect to such Mortgage Loan and the related development in a manner which is consistent with FNMA requirements.

Notwithstanding the foregoing, the Servicer may maintain a blanket policy insuring against hazard losses on all of the Mortgaged Properties relating to the Mortgage Loans in lieu of maintaining the required hazard insurance policies for each Mortgage Loan and may maintain a blanket policy insuring against special flood hazards in lieu of maintaining any required flood insurance.  Any such blanket policies shall (A) be consistent with prudent industry standards, (B) name the Servicer as loss payee, (C) provide coverage in an amount equal to the aggregate unpaid principal balance on the related Mortgage Loans without co-insurance, and (D) otherwise comply with the requirements of this Section 3.12.  Any such blanket policy may contain a deductible clause; provided that if any Mortgaged Property is not covered by a separate policy otherwise
complying with this Section 3.12 and a loss occurs with respect to such Mortgaged Property which loss would have been covered by such a policy, the Servicer shall deposit in the Servicer Custodial Account the difference, if any, between the amount that would have been payable under a separate policy complying with this Section 3.12 and the amount paid under such blanket policy.

Section 3.13.  Enforcement of Due-On-Sale Clauses; Assumption Agreements.

(a)               Except as otherwise provided in this Section 3.13, when any Mortgaged Property subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall use reasonable efforts, to the extent that it has actual knowledge of such conveyance, to enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent permitted under applicable law and governmental regulations, but only to the extent that such enforcement will not adversely affect or jeopardize coverage under any Required Insurance Policy.  Notwithstanding the foregoing, the Servicer is not required to exercise such rights with respect to a Mortgage Loan if the Person to whom the related Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the terms and
conditions contained in the Mortgage Note and Mortgage related thereto and the consent of the mortgagee under such Mortgage Note or Mortgage is not otherwise required under such Mortgage Note or Mortgage as a condition to such transfer.  If (i) the Servicer is prohibited by law from enforcing any such due-on-sale clause, (ii) coverage under any Required Insurance Policy would be adversely affected, (iii) the Mortgage Note does not include a due-on-sale clause or (iv) nonenforcement is otherwise permitted hereunder, the Servicer is authorized, subject to Section 3.13(b), to take or enter into
an assumption and modification agreement from or with the Person to whom such Mortgaged Property has been or is about to be conveyed, pursuant to which such Person becomes liable under the Mortgage Note and, unless prohibited by applicable state law, the Mortgagor remains

 

 

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 liable thereon; provided that the Mortgage Loan shall continue to be covered (if so covered before the Servicer enters such agreement) by the applicable Required Insurance Policies.  The Servicer, subject to Section 3.13(b), is also authorized with the prior approval of the insurers under any Required Insurance Policies to enter into a substitution of liability agreement with such Person, pursuant to which the original Mortgagor is released from liability and such Person is substituted as Mortgagor and becomes liable under the Mortgage Note.  Notwithstanding the foregoing, the Servicer shall
not be deemed to be in default under this Section 3.13 by reason of any transfer or assumption which the Servicer reasonably believes it is restricted by law from preventing, for any reason whatsoever.

(b)               Subject to the Servicer’s duty to enforce any due-on-sale clause to the extent set forth in Section 3.13(a), in any case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person is to enter into an assumption agreement or modification agreement or supplement to the Mortgage Note or Mortgage that requires the signature of the Trustee, or if an instrument of release signed by the Trustee is required releasing the Mortgagor from liability on the Mortgage Loan, the Servicer shall prepare and deliver or cause to be prepared and delivered to the Trustee for signature and shall direct, in writing, the Trustee to execute the assumption agreement with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other instruments as are reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with any applicable laws regarding assumptions or the transfer of the Mortgaged Property to such Person.  In no event shall the Trustee incur liability for executing any document under this Section 3.13 at the direction of the Servicer.  In connection with any such assumption, no material term of the Mortgage Note may be changed.  In addition, the substitute Mortgagor and the Mortgaged Property must be acceptable to the Servicer in accordance with its underwriting standards as then in effect.  Together with each such substitution, assumption or other agreement or instrument delivered to the Trustee for execution by it, the Servicer shall deliver an Officer’s Certificate signed by a Servicing Officer stating that the requirements of this subsection have been met. The Servicer shall
notify the Trustee that any such substitution or assumption agreement has been completed by forwarding to the Trustee (or at the direction of the Trustee, the Custodian) the original of such substitution or assumption agreement, which in the case of the original shall be added to the related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof.  Any fee collected by the Servicer for entering into an assumption or substitution of liability agreement may be retained by the Servicer as additional master servicing compensation.  Notwithstanding the foregoing, to the extent permissible under applicable law and at the request of the Servicer, the Trustee shall execute and deliver to the Servicer any powers of attorney and other documents prepared by the Servicer that are reasonably necessary or appropriate to enable the Servicer to execute any assumption agreement or
modification agreement required to be executed by the Trustee under this Section 3.13.

Section 3.14.  Realization Upon Defaulted Mortgage Loans; REO Property.

(a)               The Servicer shall use reasonable efforts to foreclose upon or otherwise comparably convert the ownership of Mortgaged Properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made

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for collection of delinquent payments.  In connection with such foreclosure or other conversion, the Servicer shall follow Customary Servicing Procedures and shall meet the requirements of the insurer under any Required Insurance Policy; provided, however, that the Servicer may enter into a special servicing agreement with an unaffiliated Holder of 100% Percentage Interest of a Class of Class B Certificates
or a holder of a class of securities representing interests in the Class B Certificates alone or together with other subordinated mortgage pass-through certificates.  Such agreement shall be substantially in the form attached hereto as Exhibit K or subject to each Rating Agency’s acknowledgment that the ratings of the Certificates in effect immediately prior to the entering into such agreement would not be qualified, downgraded or withdrawn and the Certificates would not be placed on credit review status (except for possible upgrading) as a result of such agreement.  Any such agreement may contain provisions whereby such holder may instruct the Servicer to commence or delay foreclosure proceedings with respect to delinquent Mortgage Loans and will contain provisions for the deposit of cash by the holder that would be available for distribution to Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Servicer acted in accordance with its normal procedures.  Notwithstanding the foregoing, the Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration of any Mortgaged Property unless it shall determine (i) that such restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan after reimbursement to itself of such expenses and (ii) that such expenses will be recoverable to it through proceeds of the liquidation of the Mortgage Loan (respecting which it shall have priority for purposes of withdrawals from the Servicer Custodial Account).  Any such expenditures shall constitute Servicing Advances for purposes of this Agreement.

The decision of the Servicer to foreclose on a defaulted Mortgage Loan shall be subject to a determination by the Servicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding.

With respect to any REO Property, the deed or certificate of sale shall be taken in the name of the Trustee for the benefit of the Certificateholders, or its nominee, on behalf of the Certificateholders.  The Trustee’s name shall be placed on the title to such REO Property solely as the Trustee hereunder and not in its individual capacity.  The Servicer shall ensure that the title to such REO Property references this Agreement and the Trustee’s capacity hereunder.  Pursuant to its efforts to sell such REO Property, the Servicer shall either itself or through an agent selected by the Servicer manage, conserve, protect and operate such REO Property in the same manner that it manages, conserves, protects and operates other foreclosed property for its own account and in the same manner that similar property in the same locality as the REO Property is managed.  Incident to its
conservation and protection of the interests of the Certificateholders, the Servicer may rent the same, or any part thereof, as the Servicer deems to be in the best interest of the Certificateholders for the period prior to the sale of such REO Property. The Servicer shall prepare for and deliver to the Trustee a statement with respect to each REO Property that has been rented, if any, showing the aggregate rental income received
and all expenses incurred in connection with the management and maintenance of such REO Property at such times as is necessary to enable the Trustee to comply with the reporting requirements of the REMIC Provisions; provided, however, that the Servicer shall have no duty to rent any REO Property on behalf of the Trust.  The net monthly rental income, if any, from such REO Property shall be deposited in the Servicer Custodial Account no later than the close

 

 

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 of business on each Determination Date. The Servicer shall perform, with respect to the Mortgage Loans, the tax reporting and withholding required by Sections 1445 and 6050J of the Code with respect to foreclosures and abandonments, the tax reporting required by Section 6050H of the Code with respect to the receipt of mortgage interest from individuals and, if required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by preparing such tax and information returns as may be required, in the form required. The Servicer shall deliver copies of such reports to the Trustee.

If the Trust acquires any Mortgaged Property as described above or otherwise in connection with a default or a default which is reasonably foreseeable on a Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to the end of the third calendar year following the year of its acquisition by the Trust (such period, the “REO Disposition Period”) unless (A) the Trustee shall have been supplied by the Servicer with an Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged Property subsequent to the REO Disposition Period will not result in the imposition of taxes on “prohibited transactions” (as defined in Section 860F of the Code) on either the Upper-Tier REMIC or the Lower-Tier REMIC or cause
either REMIC to fail to qualify as a REMIC at any time that any Certificates are outstanding, or (B) the Trustee (at the Servicer’s expense) or the Servicer shall have applied for, prior to the expiration of the REO Disposition Period, an extension of the REO Disposition Period in the manner contemplated by Section 856(e)(3) of the Code.  If such an Opinion of Counsel is provided or such an exemption is obtained, the Trust may continue to hold such Mortgaged Property (subject to any conditions contained in such Opinion of Counsel) for the applicable period.  Notwithstanding any other provision of this Agreement, no Mortgaged Property acquired by the Trust shall be rented (or allowed to continue to be rented) or otherwise used for the production of income by or on behalf of the Trust in such a manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the
Code or (ii) subject either REMIC to the imposition of any federal, state or local income taxes on the income earned from such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless the Servicer has agreed to indemnify and hold harmless the Trust with respect to the imposition of any such taxes.  The Servicer shall identify to the Trustee any Mortgaged Property relating to a Mortgage Loan held by the Trust for 30 months for which no plans to dispose of such Mortgaged Property by the Servicer have been made.  After delivery of such identification, the Servicer shall proceed to dispose of any such Mortgaged Property by holding a commercially reasonable auction for such property.

The income earned from the management of any REO Properties, net of reimbursement to the Servicer for expenses incurred (including any property or other taxes) in connection with such management and net of unreimbursed Servicing Fees, Periodic Advances and Servicing Advances, shall be applied to the payment of principal of and interest on the related defaulted Mortgage Loans (solely for the purposes of allocating principal and interest, interest shall be treated as accruing as though such Mortgage Loans were still current) and all
such income shall be deemed, for all purposes in this Agreement, to be payments on account of principal and interest on the related Mortgage Notes and shall be deposited into the Servicer Custodial Account.  To the extent the net income received during any calendar month is in excess of the amount attributable to amortizing principal and accrued interest at the related

 

 

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 Mortgage Interest Rate on the related Mortgage Loan for such calendar month, such excess shall be considered to be a partial prepayment of principal of the related Mortgage Loan.

The proceeds from any liquidation of a Mortgage Loan, as well as any income from an REO Property, will be applied in the following order of priority:  first, to reimburse the Servicer for any related unreimbursed Servicing Advances and Servicing Fees; second, to reimburse the Servicer for any unreimbursed Periodic Advances and to reimburse the Servicer Custodial Account for any Nonrecoverable Advances (or portions thereof) that were previously withdrawn by the Servicer pursuant to Section 3.11(a)(iii) that related to such Mortgage Loan; third, to accrued and unpaid interest (to the extent no Periodic Advance has been made for such amount or any such Periodic Advance has been reimbursed) on the Mortgage Loan or related REO Property, at the Mortgage Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fourth, as a recovery of principal of the
Mortgage Loan.  Excess Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will be retained by the Servicer as additional servicing compensation pursuant to Section 3.17.

(b)               The Servicer shall promptly notify the Depositor of any Mortgage Loan which comes into default.  The Depositor shall be entitled, at its option, to repurchase (i) any such defaulted Mortgage Loan from the Trust Estate if (a) in the Depositor’s judgment, the default is not likely to be cured by the Mortgagor and (b) such Mortgage Loan is 180 days or more delinquent or (ii) any Mortgage Loan in the Trust Estate which pursuant to Section 4(b) of the Mortgage Loan Purchase Agreement the Seller requests the Depositor to repurchase and to sell to the Seller to facilitate the exercise of the Seller’s rights against the originator or prior holder of such Mortgage Loan.  The purchase price for any such Mortgage Loan shall be 100% of the unpaid
principal balance of such Mortgage Loan plus accrued interest thereon at the Mortgage Interest Rate (less the Servicing Fee Rate for such Mortgage Loan) through the last day of the month in which such repurchase occurs.  Upon the receipt of such purchase price, the Servicer shall provide to the Trustee the notification required by Section 3.15 and the Trustee or the Custodian shall promptly release to the Depositor the Mortgage File relating to the Mortgage Loan being repurchased.

Section 3.15.  Trustee to Cooperate; Release of Mortgage Files.

Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer of a notification that payment in full will be escrowed in a manner customary for such purposes, the Servicer will immediately notify the Trustee (or, at the direction of the Trustee, the Custodian) by delivering, or causing to be delivered, two copies (one of which will be returned to the Servicer with the Mortgage File) of a Request for Release (which may be delivered in an electronic format acceptable to the Trustee and the Servicer).  Upon receipt of such request, the Trustee or the Custodian, as applicable, shall within seven Business Days release the related Mortgage File to the Servicer.  The Trustee shall at the Servicer’s direction execute and deliver to the Servicer the request for reconveyance, deed of reconveyance or release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage, in each case provided by the Servicer, together with the Mortgage Note with written evidence of cancellation thereon.  If the Mortgage has been recorded in the name of MERS or its designee, the Servicer shall take all necessary action to reflect the release of the Mortgage on the records of MERS.  Expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be

 

 

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 chargeable to the related Mortgagor.  From time to time and as shall be appropriate for the servicing or foreclosure of any Mortgage Loan, including for such purpose collection under any policy of flood insurance, any fidelity bond or errors or omissions policy, or for the purposes of effecting a partial release of any Mortgaged Property from the lien of the Mortgage or the making of any corrections to the Mortgage Note or the Mortgage or any of the other documents included in the Mortgage File, the Trustee or the Custodian, as applicable,
shall, upon delivery to the Trustee (or, at the direction of the Trustee, the Custodian) of a Request for Release signed by a Servicing Officer, release the Mortgage File within seven Business Days to the Servicer.  Subject to the further limitations set forth below, the Servicer shall cause the Mortgage File so released to be returned to the Trustee or the Custodian, as applicable, when the need therefor by the Servicer no longer exists, unless the Mortgage Loan is liquidated and the proceeds thereof are deposited in the Servicer Custodial Account, in which case the Servicer shall deliver to the Trustee or the Custodian, as applicable, a Request for Release, signed by a Servicing Officer.

The Trustee shall execute and deliver to the Servicer any powers of attorney and other documents prepared by the Servicer that are reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties under this Agreement, upon the request of the Servicer.  In addition, upon prepayment in full of any Mortgage Loan or the receipt of notice that funds for such purpose have been placed in escrow, the Servicer is authorized to give, as attorney-in-fact for the Trustee and the mortgagee under the Mortgage, an instrument of satisfaction (or Assignment of Mortgage without recourse) regarding the Mortgaged Property relating to such Mortgage Loan, which instrument of satisfaction or Assignment of Mortgage, as the case may be, shall be delivered to the Person entitled thereto against receipt of the prepayment in full.  If the Mortgage is registered in the
name of MERS or its designee, the Servicer shall take all necessary action to reflect the release on the records of MERS.  In lieu of executing such satisfaction or Assignment of Mortgage, or if another document is required to be executed by the Trustee, the Servicer may deliver or cause to be delivered to the Trustee, for signature, as appropriate, any court pleadings, requests for trustee’s sale or other documents necessary to effectuate such foreclosure or any legal action brought to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce any other remedies or rights provided by the Mortgage Note or the Mortgage or otherwise available at law or in equity.

Section 3.16.  Documents, Records and Funds in Possession of the Servicer to be Held for the Trustee.

The Servicer shall transmit to the Trustee or, at the direction of the Trustee, the Custodian as required by this Agreement all documents and instruments in respect of a Mortgage Loan coming into the possession of the Servicer from time to time and shall account fully to the Trustee for any funds received by the Servicer or which otherwise are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan.  The documents constituting the Servicing File shall be held by the Servicer as custodian and bailee for the Trustee.  All Mortgage Files and funds collected or held by, or under the control of, the Servicer
in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds, including but not limited to, any funds on deposit in the Servicer Custodial Account, shall be held by the Servicer for and on behalf of the Trustee and shall be and remain the sole and exclusive property of the Trustee, subject to the applicable provisions of this

 

 

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 Agreement. The Servicer also agrees that it shall not knowingly create, incur or subject any Mortgage File or any funds that are deposited in the Servicer Custodial Account, Certificate Account or any Escrow Account, or any funds that otherwise are or may become due or payable to the Trustee for the benefit of the Certificateholders, to any claim, lien, security interest, judgment, levy, writ of attachment or other encumbrance created by the Servicer, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a Mortgage Loan, except, however, that the Servicer shall be entitled to set off against and deduct from any such funds any amounts that are properly due and payable to the Servicer under this Agreement.

Section 3.17.  Servicing Compensation.

The Servicer shall be entitled out of each payment of interest on a Mortgage Loan (or portion thereof) and included in the Trust Estate to retain or withdraw from the Servicer Custodial Account an amount equal to the Servicing Fee for such Distribution Date.

Additional servicing compensation in the form of Excess Proceeds, prepayment penalties, assumption fees, late payment charges and all income and gain net of any losses realized from Permitted Investments and all other customary and ancillary income and fees shall be retained by the Servicer to the extent not required to be deposited in the Servicer Custodial Account pursuant to Section 3.08(b). The Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder and shall not be entitled to reimbursement therefor except as specifically provided in this Agreement.

Notwithstanding the foregoing, with respect to the payment of the Servicing Fee on any Distribution Date, the aggregate Servicing Fee for the Servicer for such Distribution Date shall be reduced (but not below zero) by an amount equal to the lesser of (a) the Prepayment Interest Shortfall for such Distribution Date relating to the Mortgage Loans and (b) one-twelfth of      % of the aggregate Stated Principal Balance of such Mortgage Loans for such Distribution Date (any such reduction, “Compensating Interest”).

Section 3.18.  Annual Statement as to Compliance.

The Servicer shall deliver to the Trustee and each Rating Agency on or before 90 days after the end of the Servicer’s fiscal year, commencing with its 20   fiscal year, an Officer’s Certificate stating, as to the signer thereof, that (a) a review of the activities of the Servicer during the preceding calendar year and of the performance of the Servicer under this Agreement has been made under such officer’s supervision, and (b) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its 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.

Section 3.19.  Annual Independent Public Accountants’ Servicing Statement; Financial Statements.

The Servicer shall, at its own expense, on or before 90 days after the end of the Servicer’s fiscal year, commencing with its 20   fiscal year, cause a firm of independent public accountants (who may also render other services to the Servicer or any affiliate thereof) which is

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a member of the American Institute of Certified Public Accountants to furnish a statement to the Trustee to the effect that such firm has with respect to the Servicer’s overall servicing operations, examined such operations in accordance with the requirements of the Uniform Single Attestation Program for Mortgage Bankers, stating such firm’s conclusions relating thereto.

Section 3.20.  Advances.

The Servicer shall determine on or before each Servicer Advance Date whether it is required to make a Periodic Advance pursuant to the definition thereof.  If the Servicer determines it is required to make a Periodic Advance, it shall, on or before the Servicer Advance Date, either (a) deposit into the Servicer Custodial Account an amount equal to the Advance and/or (b) make an appropriate entry in its records relating to the Servicer Custodial Account that any portion of the Amount Held for Future Distribution in the Servicer Custodial Account has been used by the Servicer in discharge of its obligation to make any such Periodic Advance.  Any funds so applied shall be replaced by the Servicer by deposit in the Servicer Custodial Account no later than the close of business on the Business Day preceding the next Servicer Advance Date. The Servicer shall be entitled to be reimbursed from the
Servicer Custodial Account for all Advances of its own funds made pursuant to this Section 3.20 as provided in Section 3.11(a).  The obligation to make Periodic Advances with respect to any Mortgage Loan shall continue until the ultimate disposition of the REO Property or Mortgaged Property relating to such Mortgage Loan. The Servicer shall inform the Trustee of the amount of the Periodic Advance to be made by the Servicer on each Servicer Advance Date no later than the related Remittance Date.

The Servicer shall deliver to the Trustee on the related Servicer Advance Date an Officer’s Certificate of a Servicing Officer indicating the amount of any proposed Periodic Advance determined by the Servicer to be a Nonrecoverable Advance.  Notwithstanding anything to the contrary, the Servicer shall not be required to make any Periodic Advance or Servicing Advance that would be a Nonrecoverable Advance.

Section 3.21.  Modifications, Waivers, Amendments and Consents.

(a)               Subject to this Section 3.21, the Servicer may agree to any modification, waiver, forbearance, or amendment of any term of any Mortgage Loan without the consent of the Trustee or any Certificateholder.  All modifications, waivers, forbearances or amendments of any Mortgage Loan shall be in writing and shall be consistent with Customary Servicing Procedures.

(b)               The Servicer shall not agree to enter into, and shall not enter into, any modification, waiver (other than a waiver referred to in Section 3.13, which waiver, if any, shall be governed by Section 3.13), forbearance or amendment of any term of any Mortgage Loan if such modification, waiver, forbearance, or amendment would:

(i)                affect the amount or timing of any related payment of principal, interest or other amount payable thereunder;

(ii)               in the Servicer’s judgment, materially impair the security for such Mortgage Loan or reduce the likelihood of timely payment of amounts due thereon; or

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(iii)              otherwise constitute a “significant modification” within the meaning of Treasury Regulations Section 1.860G-2(b);

unless, in either case, (A) such Mortgage Loan is 90 days or more past due or (B) the Servicer delivers to the Trustee an Opinion of Counsel to the effect that such modification, waiver, forbearance or amendment would not affect the REMIC status of either the Upper-Tier REMIC or the Lower-Tier REMIC and, in either case, such modification, waiver, forbearance or amendment is reasonably likely to produce a greater recovery with respect to such Mortgage Loan than would liquidation.  Subject to Customary Servicing Procedures, the Servicer may permit a forbearance for a Mortgage Loan which in the Servicer’s judgment is subject to imminent default.

(c)               Any payment of interest, which is deferred pursuant to any modification, waiver, forbearance or amendment permitted hereunder, shall not, for purposes hereof, including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or such modification, waiver or amendment so permit.

(d)               The Servicer may, as a condition to granting any request by a Mortgagor for consent, modification, waiver, forbearance or amendment, the granting of which is within the Servicer’s discretion pursuant to the Mortgage Loan and is permitted by the terms of this Agreement, require that such Mortgagor pay to the Servicer, as additional servicing compensation, a reasonable or customary fee for the additional services performed in connection with such request, together with any related costs and expenses incurred by the Servicer, which amount shall be retained by the Servicer as additional servicing compensation.

(e)               The Servicer shall notify the Trustee, in writing, of any modification, waiver, forbearance or amendment of any term of any Mortgage Loan and the date thereof, and shall deliver to the Trustee (or, at the direction of the Trustee, the Custodian) for deposit in the related Mortgage File, an original counterpart of the agreement relating to such modification, waiver, forbearance or amendment, promptly (and in any event within ten Business Days) following the execution thereof; provided, however, that if any such modification, waiver, forbearance or amendment is required by applicable law to be recorded, the Servicer (i) shall deliver to the Trustee a copy thereof and
(ii) shall deliver to the Trustee such document, with evidence of notification upon receipt thereof from the public recording office.

Section 3.22.  Reports to the Securities and Exchange Commission.

The Trustee shall, on behalf of the Trust, cause to be filed with the Securities and Exchange Commission any periodic reports required to be filed under the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder, for so long as any Certificates registered under the 1933 Act
are outstanding (other than the Current Report on Form 8-K to be filed by the Depositor in connection with computational materials and the initial Current Report on Form 8-K to be filed by the Depositor in connection with the issuance of the Certificates).  Upon the request of the Trustee, the Servicer and the Depositor shall cooperate with the Trustee in the preparation of any such report and shall provide to the Trustee in a timely manner all such information or

 

 

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 documentation as the Trustee may reasonably request in connection with the performance of its duties and obligations under this Section.

ARTICLE IV

 

SERVICER’S CERTIFICATE

Section 4.01.  Servicer’s Certificate.

Each month, not later than 12:00 noon Eastern time on the Business Day following each Determination Date, the Servicer shall deliver to the Trustee, a Servicer’s Certificate (in substance and format mutually acceptable to the Servicer and the Trustee) certified by a Servicing Officer setting forth the information necessary in order for the Trustee to perform its obligations under this Agreement.  The Trustee may conclusively rely upon the information contained in a Servicer’s Certificate for all purposes hereunder and shall have no duty to verify or re-compute any of the information contained therein.

Each such statement shall be provided by the Trustee to any Holder of a Certificate upon request and shall also, to the extent available, include information regarding delinquencies on Mortgage Loans providing such statement, indicating the number and aggregate principal amount of Mortgage Loans which are either one, two, three or more than three months delinquent and the book value of any REO Property.

 

ARTICLE V

 

PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS; 

REMIC ADMINISTRATION

Section 5.01.  Distributions.  On each Distribution Date, based solely on the information in the Servicer’s Certificate, the Trustee shall distribute out of the Upper-Tier Certificate Account or the Certificate Account, as applicable, (to the extent funds are available therein) to each Certificateholder of record on the related Record Date (other than as provided in Section 10.01 respecting the final distribution) (a) by check mailed to such Certificateholder entitled to receive a distribution on such Distribution Date at the address appearing in the Certificate Register, or (b) upon written request by the Holder of a Regular Certificate (in the event such Certificateholder owns of record 100% of a Class of Certificates or holds Certificates of any Class having denominations aggregating $1,000,000 or more), by wire transfer or
by such other means of payment as such Certificateholder and the Trustee shall agree upon, such Certificateholder’s Percentage Interest in the amount to which the related Class of Certificates is entitled in accordance with the priorities set forth below in Section 5.02.

None of the Holders of any Class of Certificates, the Depositor, the Servicer or the Trustee shall in any way be responsible or liable to Holders of any Class of Certificates in respect of amounts properly previously distributed on any such Class.

Amounts distributed with respect to any Class of Certificates shall be applied first to the distribution of interest thereon and then to principal thereon.

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Section 5.02.  Priorities of Distributions.

(a)               On each Distribution Date, based solely on the information contained in the Servicer’s Certificate, the Trustee shall withdraw from the Certificate Account (to the extent funds are available therein) (1) the amounts payable to the Trustee pursuant to Sections 3.11(b)(i) and 3.11(b)(ii) and shall pay such funds to itself, and (2) the Pool Distribution Amount, in an amount as specified in written notice received by the Trustee from the Servicer no later than the related Determination Date, and shall apply such funds, first, to distributions in respect of the Uncertificated Lower-Tier Interests as specified in this Section 5.02(a) for deposit in the Upper-Tier Certificate Account and to the Class A-LR Certificate, and then from the Upper-Tier
Certificate Account to distributions on the Certificates in the following order of priority and to the extent of such funds:

(i)                to each Class of Senior Certificates (other than the Class A-PO and Class A-LR Certificates), an amount allocable to interest equal to the Interest Distribution Amount for such Class and any shortfall being allocated among such Classes in proportion to the amount of the Interest Distribution Amount that would have been distributed in the absence of such shortfall;

(ii)               concurrently to the Class A Certificates (other than the Class A-PO and Class A-LR Certificates) and the Class A-PO Certificates, pro rata, based on their respective Senior Principal Distribution Amount and PO Principal Amount, (A) to the
Class A Certificates (other than the Class A-PO Certificates), in an aggregate amount up to the Senior Principal Distribution Amount, such distribution to be allocated among such Classes in accordance with Section 5.02(b) and (B) to the Class A-PO Certificates in an aggregate amount up to the PO Principal Amount;

(iii)              to the Class A-PO Certificates, any Class A-PO Deferred Amount, up to the Subordinate Principal Distribution Amount for such Distribution Date from amounts otherwise distributable first to the Class B-6 Certificates pursuant to clause (iv)(L) below, second to the Class B-5 Certificates pursuant to clause (iv)(J) below, third to the Class B-4 Certificates pursuant to clause (iv)(H) below, fourth to the Class B-3 Certificates pursuant to clause (iv)(F) below, fifth to the Clause B-2 Certificates pursuant to clause (iv)(D) below and finally to the Class B-1 Certificates pursuant to clause (iv)(B) below;

(iv)              to each Class of Subordinate Certificates, subject to paragraph (d) below, in the following order of priority:

(A)              to the Class B-1 Certificates, an amount allocable to interest equal to the Interest Distribution Amount for such Class for such Distribution Date;

(B)              to the Class B-1 Certificates, an amount allocable to principal equal to its Pro Rata Share for such Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause (iii) above until the Class Certificate Balance thereof has been reduced to zero;

(C)              to the Class B-2 Certificates, an amount allocable to interest equal to the Interest Distribution Amount for such Class for such Distribution Date;

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(D)              to the Class B-2 Certificates, an amount allocable to principal equal to its Pro Rata Share for such Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause (iii) above until the Class Certificate Balance thereof has been reduced to zero;

(E)              to the Class B-3 Certificates, an amount allocable to interest equal to the Interest Distribution Amount for such Class for such Distribution Date;

(F)              to the Class B-3 Certificates, an amount allocable to principal equal to its Pro Rata Share for such Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause (iii) above until the Class Certificate Balance thereof has been reduced to zero;

(G)              to the Class B-4 Certificates, an amount allocable to interest equal to the Interest Distribution Amount for such Class for such Distribution Date;

(H)              to the Class B-4 Certificates, an amount allocable to principal equal to its Pro Rata Share for such Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause (iii) above until the Class Certificate Balance thereof has been reduced to zero;

(I)                to the Class B-5 Certificates, an amount allocable to interest equal to the Interest Distribution Amount for such Class for such Distribution Date;

(J)               to the Class B-5 Certificates, an amount allocable to principal equal to its Pro Rata Share for such Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause (iii) above until the Class Certificate Balance thereof has been reduced to zero;

(K)             to the Class B-6 Certificates, an amount allocable to interest equal to the Interest Distribution Amount for such Class for such Distribution Date; and

(L)              to the Class B-6 Certificates, an amount allocable to principal equal to its Pro Rata Share for such Distribution Date less any amount used to pay the Class A-PO Deferred Amount pursuant to clause (iii) above until the Class Certificate Balance thereof has been reduced to zero; and

(v)               to the Holder of the Class A-R Certificate, any amounts remaining in the Upper-Tier Certificate Account, and to the Holder of the Class A-LR Certificate, any remaining Pool Distribution Amount.

On any Distribution Date, amounts distributed in respect of Class A-PO Deferred Amounts will not reduce the Class Certificate Balance of the Class A-PO Certificates.

All distributions in respect of the Interest Distribution Amount for a Class will be applied first with respect to the amount payable pursuant to clause (i) of the definition of “Interest Distribution Amount,” and second with respect to the amount payable pursuant to clause (ii) of such definition.

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On each Distribution Date, each Uncertificated Lower-Tier Interest shall receive distributions in respect of principal in an amount equal to the amount of principal distributed to their respective Corresponding Upper-Tier Class or Classes as provided herein.  On each Distribution Date, each Uncertificated Lower-Tier Interest shall receive distributions in respect of interest in an amount equal to the Interest Distribution Amounts in respect of its Corresponding Upper-Tier Class or Classes, in each case to the extent actually distributed thereon.  Such amounts distributed to the Uncertificated Lower-Tier Interests in respect of principal and interest with respect to any Distribution Date are referred to herein collectively as the “Lower-Tier Distribution Amount.”

As of any date, the principal balance (or, in the case of the Class A-LWIO Interest, the notional amount) of each Uncertificated Lower-Tier Interest equals the aggregate of the Class Certificate Balances of the respective Corresponding Upper-Tier Class or Classes (or, in the case of the Class A-WIO Certificates, the Class A-WIO Notional Amount).  The initial principal balance of each Uncertificated Lower-Tier Interest equals the aggregate of the Initial Class Certificate Balances (or notional amount) of the respective Corresponding Upper-Tier Class or Classes.

The pass-through rate with respect to the Class A-L1 Interest, Class A-LUR Interest, Class B-L1 Interest, Class B-L2 Interest, Class B-L3 Interest, Class B-L4 Interest, Class
B-L5 Interest and Class B-L6 Interest shall be      % per annum. The pass-through rate with respect to the Class A-L3 Interest shall be      % per annum. The pass-through rate with respect to the Class A-L4 Interest shall be      % per annum.  The pass-through rate with respect to the Class A-LWIO Interest shall be a per annum rate equal to (i) the weighted average of the Net Mortgage Interest Rates of the Premium Mortgage Loans (based on the Stated Principal Balance of the Premium Mortgage Loans on the Due Date in the month preceding the month of such Distribution Date minus (ii)      %.  The Class A-LPO Interest is a principal-only interest and is not entitled to distributions of interest. Any Non-Supported Interest Shortfalls will be allocated to each Uncertificated Lower-Tier Interest in the same
relative proportions as interest is allocated to such Uncertificated Lower-Tier Interest.

(b)               (i) On each Distribution Date prior to the Senior Credit Support Depletion Date, the amount distributable to the Class A Certificates (other than the Class A-PO Certificates) pursuant to Section 5.02(a)(ii) for such Distribution Date, will be distributed in the following order of priority:

[To Be Provided]

On each Distribution Date on or after the Senior Credit Support Depletion Date, notwithstanding the allocation and priority set forth above, the portion of the Pool Distribution Amount available to be distributed as principal of the Class A Certificates (other than the Class A-PO Certificates) shall be distributed concurrently, as principal, on such Classes, pro rata, on the basis of their respective Class Certificate Balances, until the Class Certificate Balances thereof are reduced to zero.

(c)               On each Distribution Date, Accrued Certificate Interest for each Class of Certificates for such Distribution Date shall be reduced by such Class’s pro rata share, based on

 

 

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such Class’s Interest Distribution Amount for such Distribution Date, without taking into account the allocation made by this Section 5.02(c), of (A) Non-Supported Interest Shortfalls, (B) any Excess Losses allocable to interest, (C) on and after the Senior Credit Support Depletion Date, any other Realized Loss allocable to interest and (D) each Relief Act Reduction incurred during the calendar month preceding the month of such Distribution Date.

(d)               Notwithstanding the priority and allocation contained in Section 5.02(a)(iv), if with respect to any Class of Subordinate Certificates on any Distribution Date, (i) the aggregate of the Class Certificate Balances immediately prior to such Distribution Date of all Classes of Subordinate Certificates which have a higher numerical Class designation than such Class, divided by (ii) the aggregate Class Certificate Balance of all the Certificates (other than the Class A-PO Certificates) immediately prior to such Distribution Date (the “Fractional Interest”) is less than the Original Fractional Interest for such Class, no distribution of principal will be made to any Classes junior to such Class (the
“Restricted Classes”) and the Class Certificate Balances of the Restricted Classes will not be used in determining the Pro Rata Share for the Subordinate Certificates that are not Restricted Classes.  Any funds remaining will be distributed in the order provided in Section 5.02(a)(iv).

Section 5.03.  Allocation of Losses.

(a)               On or prior to each Determination Date, the Servicer shall inform the Trustee in writing with respect to each Mortgage Loan: (1) whether any Realized Loss is a Deficient Valuation or a Debt Service Reduction, (2) of the amount of such loss or Deficient Valuation, or of the terms of such Debt Service Reduction and (3) of the total amount of Realized Losses.  Based on such information, the Trustee shall determine the total amount of Realized Losses with respect to the related Distribution Date.

The principal portion of Realized Losses with respect to any Distribution Date shall be allocated as follows:

(i)                the applicable PO Percentage of the principal portion of any Realized Loss with respect to a Discount Mortgage Loan shall be allocated to the Class A-PO Certificates until the Class Certificate Balance thereof is reduced to zero; and

(ii)               the applicable Non-PO Percentage of the principal portion of any Realized Loss shall be allocated first to the Subordinate Certificates in reverse order of their respective numerical Class designations (beginning with the Class of Subordinate Certificates then outstanding with the highest numerical Class designation) until the respective Class Certificate Balance of each such Class is reduced to zero, and second to the Senior Certificates (other than the Class A-PO Certificates), pro rata, on the basis of their respective Class Certificate Balances immediately prior to the related Distribution Date, until the Class Certificate Balances thereof have been reduced to zero; and

(b)               The Class Certificate Balance of the Class A-PO Certificates shall be reduced on each Distribution Date by the amount, if any, by which the Class Certificate Balance of the Class A-PO Certificates (after giving effect to the amount to be distributed as a

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distribution of principal and the allocation of Realized Losses on such Distribution Date) exceeds the Adjusted Pool Amount (PO Portion) for such Distribution Date.

The Class Certificate Balance of the Class of Subordinate Certificates then outstanding with the highest numerical Class designation shall be reduced on each Distribution Date by the amount, if any, by which the aggregate of the Class Certificate Balances of all outstanding Classes of Certificates (after giving effect to the amount to be distributed as a distribution of principal and the allocation of Realized Losses and Class A-PO Deferred Amounts on such Distribution Date) exceeds the Adjusted Pool Amount for such Distribution Date.

After the Senior Credit Support Depletion Date, the Class Certificate Balances of the Senior Certificates in the aggregate (other than the Class Certificate Balance of the Class A-PO Certificates) shall be reduced on each Distribution Date by the amount, if any, by which the aggregate of the Class Certificate Balances of all outstanding Classes of Senior Certificates (other than Class A-PO Certificates) (after giving effect to the amount to be distributed as a distribution of principal and the allocation of Realized Losses on such Distribution Date) exceeds the difference between (i) the Adjusted Pool Amount for such Distribution Date and (ii) the Adjusted Pool Amount (PO Portion) for such Distribution Date.

Any such reduction shall be allocated among the Senior Certificates (other than the Class A-PO Certificates) based on the Class Certificate Balances immediately prior to such Distribution Date.

(c)               Any Realized Loss allocated to a Class of Certificates or any reduction in the Class Certificate Balance of a Class of Certificates pursuant to Section 5.03(b) above shall be allocated among the Certificates of such Class in proportion to their respective Percentage Interests.

(d)               Any allocation of Realized Losses to a Class of Certificates or any reduction in the Class Certificate Balance of a Class pursuant to Section 5.03(b) above shall be accomplished by reducing the Class Certificate Balance thereof prior to the distributions made on the related Distribution Date in accordance with the definition of “Class Certificate Balance.”

(e)               With respect to any Distribution Date, Realized Losses allocated pursuant to this Section 5.03 will be allocated to each Uncertificated Lower-Tier Interest in an amount equal to the amount allocated to its respective Corresponding Upper-Tier Class or Classes as provided above.

Section 5.04.  Statements to Certificateholders.

(a)               Prior to the Distribution Date in each month, based upon the information provided to the Trustee on the Servicer’s Certificates delivered to the Trustee pursuant to Section 4.01, the Trustee shall determine the following information with respect to such Distribution Date:

(i)                the amount allocable to principal, separately identifying the aggregate amount of any Principal Prepayments and Liquidation Proceeds included therein;

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(ii)               the amount allocable to interest, any Class Unpaid Interest Shortfall included in such distribution and any remaining Class Unpaid Interest Shortfall after giving effect to such distribution;

(iii)              if the distribution to the Holders of such Class of Certificates is less than the full amount that would be distributable to such Holders if there were sufficient funds available therefor, the amount of the shortfall and the allocation thereof as between principal and interest;

(iv)              the Class Certificate Balance of each Class of Certificates after giving effect to the distribution of principal on such Distribution Date;

	
            (v)
 	
            the Pool Stated Principal Balance for the following Distribution Date;
 

(vi)              the Senior Percentage, the Priority Percentage and the Subordinate Percentage for the following Distribution Date;

(vii)             the amount of the Servicing Fee paid to or retained by the Servicer with respect to such Distribution Date;

(viii)            the Pass-Through Rate for each such Class of Certificates with respect to such Distribution Date;

(ix)              the amount of Periodic Advances included in the distribution on such Distribution Date and the aggregate amount of Periodic Advances outstanding as of the close of business on such Distribution Date;

(x)               the number and aggregate principal amounts of Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure) (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90 days and (4) 91 or more days and (B) in foreclosure, as of the close of business on the last day of the calendar month preceding such Distribution Date;

(xi)              with respect to any Mortgage Loan that became an REO Property during the preceding calendar month, the loan number and Stated Principal Balance of such Mortgage Loan as of the close of business on the Determination Date preceding such Distribution Date and the date of acquisition thereof;

(xii)             the total number and principal balance of any REO Properties (and market value, if available) as of the close of business on the Determination Date preceding such Distribution Date;

(xiii)            the Senior Prepayment Percentage and the Subordinate Prepayment Percentage for the following Distribution Date;

(xiv)            the aggregate amount of Realized Losses incurred during the preceding calendar month or any Class A-PO Deferred Amounts for such Distribution Date.

	
            (xv)
 	
            in the case of the Class A-5 Certificates, the Class A-5 Notional Amount;
 

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(xvi)            in the case of the Class A-WIO Certificates, the Class A-WIO Notional Amount for such Distribution Date.

(b)               No later than each Distribution Date, the Trustee, based upon information supplied to it on the Servicer’s Certificates, shall prepare and deliver (by mail, fax or electronically) to each Holder of a Certificate, each Rating Agency and the Servicer a statement setting forth the information set forth in Section 5.04(a).

In the case of information furnished pursuant to clauses (i), (ii) and (ix) of Section 5.04(a), the amounts shall be expressed as a dollar amount per Certificate with a $1,000 denomination.

On each Distribution Date, the Trustee shall prepare and furnish to each Financial Market Service, in electronic or such other format and media mutually agreed upon by the Trustee, the Financial Market Service and the Depositor, the information contained in the statement described in Section 5.04(a) for such Distribution Date.

The Trustee may make available each month, to any interested party, the monthly statement to Certificateholders via the Trustee’s website.

Within a reasonable period of time after the end of each calendar year, the Trustee shall furnish to each Person who at any time during the calendar year was the Holder of a Certificate, if requested in writing by such Person, a statement containing the information set forth in clauses (i), (ii) and (vii) of Section 5.04(a), in each case aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder.  Such obligation of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable information shall be provided by the Trustee pursuant to any requirements of the Code as from time to time in force.

The Trustee shall deliver to the Holders of Certificates any reports or information the Trustee is required by this Agreement or the Code, Treasury Regulations or REMIC Provisions to deliver to the Holders of Certificates, and the Trustee shall prepare and provide to the Certificateholders (by mail, telephone, or publication as may be permitted by applicable Treasury Regulations) such other reasonable information as the Trustee deems necessary or appropriate or is required by the Code, Treasury Regulations, and the REMIC Provisions including, but not limited to, (i) information to be reported to the Holders of the Residual Certificates for quarterly notices on Schedule Q (Form 1066) (which information shall be forwarded to the Holders of the Residual Certificates by the Trustee), (ii) information to be provided to the Holders of Certificates with respect to amounts which should be included
as interest and original issue discount in such Holders’ gross income and (iii) information to be provided to all Holders of Certificates setting forth the percentage of each REMIC’s assets, determined in accordance with Treasury Regulations using a convention, not inconsistent with Treasury Regulations, selected by the Trustee in its absolute discretion, that constitute real estate assets under Section 856 of the Code, and assets described in Section 7701(a)(19)(C) of the Code; provided, however, that in setting forth the percentage of such assets of each REMIC, nothing contained in this Agreement, including without limitation Section 7.03 hereof, shall be interpreted to require the Trustee periodically to appraise the fair market values of the assets of

 

 

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 the Trust Estate or to indemnify the Trust Estate or any Certificateholders from any adverse federal, state or local tax
consequences associated with a change subsequently required to be made in the Depositor’s initial good faith determinations of such fair market values (if subsequent determinations are required pursuant to the REMIC Provisions) made from time to time.

Section 5.05.  Tax Returns and Reports to Certificateholders.

(a)               For federal income tax purposes, each REMIC shall have a calendar year taxable year and shall maintain its books on the accrual method of accounting.

(b)               The Trustee shall prepare or cause to be prepared, shall execute and shall file or cause to be filed with the Internal Revenue Service and applicable state or local tax authorities income tax information returns for each taxable year with respect to each REMIC containing such information at the times and in the manner as may be required by the Code, the Treasury Regulations or state or local tax laws, regulations, or rules, and shall furnish or cause to be furnished to each REMIC and the Certificateholders the schedules, statements or information at such times and in such manner as may be required thereby.  Within 30 days of the Closing Date, the Trustee shall furnish or cause to be furnished to the Internal Revenue Service, on Form 8811 or as otherwise
required by the Code or the Treasury Regulations,  the name, title, address and telephone number of the person that Holders of the Certificates may contact for tax information relating thereto, together with such additional information at the time or times and in the manner required by the Code or the Treasury Regulations.  Such federal, state, or local income tax or information returns shall be signed by the Trustee, or such other Person as may be required to sign such returns by the Code, the Treasury Regulations or state or local tax laws, regulations, or rules.

(c)               In the first federal income tax return of each REMIC for its short taxable year ending December 31, 200  , REMIC status shall be elected for such taxable year and all succeeding taxable years.

(d)               The Trustee will maintain or cause to be maintained such records relating to each REMIC, including but not limited to records relating to the income, expenses, assets and liabilities of the Trust Estate, and the initial fair market value and adjusted basis of the Trust Estate property and assets determined at such intervals as may be required by the Code or the Treasury Regulations, as may be necessary to prepare the foregoing returns, schedules, statements or information.

Section 5.06.  Tax Matters Person.  The Tax Matters Person shall have the same duties with respect to each REMIC as those of a “tax matters partner” under Subchapter C of Chapter 63 of Subtitle F of the Code.  The Holder of the Class A-R Certificate is hereby designated as the Tax Matters Person for the Upper-Tier REMIC.  The Holder of the Class A-LR Certificate is hereby designated as the Tax Matters Person for the Lower-Tier REMIC.  By their acceptance of the Class A-R or Class A-LR Certificate, as applicable, each such Holder irrevocably appoints the Trustee as its agent to perform all of the duties of the Tax Matters Person for the Upper-Tier REMIC and the Lower-Tier REMIC.

 

 

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Section 5.07.  Rights of the Tax Matters Person in Respect of the Trustee.  The Trustee shall afford the Tax Matters Person, upon reasonable notice during normal business hours, access to all records maintained by the Trustee in respect of its duties hereunder and access to officers of the Trustee responsible for performing such duties.  Upon request, the Trustee shall furnish the Tax Matters Person with its most recent report of condition published pursuant to law or to the requirements of its supervisory or examining authority publicly available.  The Trustee shall make available to the Tax Matters Person such books, documents or records relating to the Trustee’s services hereunder as the Tax Matters Person shall reasonably request.  The Tax Matters Person shall not have any responsibility or liability for any action or failure to act
by the Trustee and is not obligated to supervise the performance of the Trustee under this Agreement or otherwise.

Section 5.08.  REMIC Related Covenants.  For as long as the Trust shall exist, the Trustee, the Depositor and the Servicer shall act in accordance herewith to assure continuing treatment of the Upper-Tier REMIC and the Lower-Tier REMIC as REMICs and avoid the imposition of tax on either REMIC.  In particular:

(a)               The Trustee shall not create, or permit the creation of, any “interests” in either REMIC within the meaning of Code Section 860D(a)(2) other than the interests represented by the Regular Certificates, the Residual Certificates and the Uncertificated Lower-Tier Interests.

(b)               Except as otherwise provided in the Code, (i) the Depositor and the Servicer shall not contribute to the Trust Estate and the Trustee shall not accept property unless substantially all of the property held in each REMIC constitutes either “qualified mortgages” or “permitted investments” as defined in Code Sections 860G(a)(3) and (5), respectively, and (ii) no property shall be contributed to each REMIC after the start-up day unless such contribution would not subject the Trust Estate to the 100% tax on contributions to a REMIC after the start-up day of the REMIC imposed by Code Section 860G(d).

(c)               The Trustee shall not accept on behalf of either REMIC any fee or other compensation for services and neither the Trustee nor the Servicer shall knowingly accept, on behalf of the Trust Estate any income from assets other than those permitted to be held by a REMIC.

(d)               The Trustee shall not sell or permit the sale of all or any portion of the Mortgage Loans (other than in accordance with Sections 2.02, 2.04 or 3.14(b)), unless such sale is pursuant to a “qualified liquidation” of the applicable REMIC as defined in Code Section 860F(a)(4)(A) and in accordance with Article X.

(e)               The Trustee shall maintain books with respect to the Trust and each REMIC on a calendar year taxable year and on an accrual basis.

Neither the Servicer nor the Trustee shall engage in a “prohibited transaction” (as defined in Code Section 860F(a)(2)), except that, with the prior written consent of the Servicer and the Depositor, the Trustee may engage in the activities otherwise prohibited by the foregoing paragraphs (b), (c) and (d); provided that the Servicer shall have delivered to the Trustee an

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 Opinion of Counsel to the effect that such transaction will not result in the imposition of a tax on either REMIC and will not disqualify the Trust Estate from treatment as two REMICs; and, provided further, that the Servicer shall have demonstrated to the satisfaction of the Trustee that such action will not adversely affect the rights of the Holders of the Certificates and the Trustee and that such action will not
adversely impact the rating of the Certificates.

Section 5.09.  Determination of LIBOR.  On each Rate Determination Date for a Class of LIBOR Certificates, the Trustee shall determine LIBOR for the applicable Distribution Date on the basis of the British Bankers’ Association (“BBA”) “Interest Settlement Rate” for one-month deposits in U.S. Dollars as found on Telerate page 3750 as of 11:00 A.M. London time on such Rate Determination Date. As used herein, “Telerate page 3750” means the display designated as page 3750 on the Bridge Telerate Service.

If on any Rate Determination Date for a Class of LIBOR Certificates, the Trustee is unable to determine LIBOR on the basis of the method set forth in the preceding paragraph, LIBOR for the applicable Distribution Date will be whichever is higher of (x) LIBOR as determined on the previous Rate Determination Date for such Class of LIBOR Certificates or (y) the Reserve Interest Rate. The “Reserve Interest Rate” will be the rate per annum which the Trustee determines to be either (A) the arithmetic mean (rounding such arithmetic mean upwards
if necessary to the nearest whole multiple of 1/16%) of the one-month U.S. Dollar lending rates that New York City banks selected by the Trustee are quoting, on the relevant Rate Determination Date, to the principal London offices of at least two leading banks in the London interbank market or (B) in the event that the Trustee can determine no such arithmetic mean, the lowest one-month U.S. Dollar lending rate that the New York City banks selected by the Trustee are quoting on such Rate Determination Date to leading European banks.

If on any Rate Determination Date for a Class of LIBOR Certificates, the Trustee is required but is unable to determine the Reserve Interest Rate in the manner provided in the preceding paragraph, LIBOR for the applicable Distribution Date will be LIBOR as determined on the previous Rate Determination Date for such Class of LIBOR Certificates, or, in the case of the first Rate Determination Date,          % per annum.

The establishment of LIBOR by the Trustee and the Trustee’s subsequent calculation of the rates of interest applicable to each of the LIBOR Certificates in the absence of manifest error, will be final and binding. After a Rate Determination Date, the Trustee shall provide the Pass-Through Rates of the LIBOR Certificates for the related Distribution Date to Beneficial Owners or Holders of LIBOR Certificates who place a telephone call to the Trustee at       and make a request therefor.

ARTICLE VI

 

THE CERTIFICATES

Section 6.01.  The Certificates.  The Classes of Senior Certificates and the Subordinate Certificates shall be substantially in the forms set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-PO, A-WIO, A-R, A-LR, B-1, B-2, B-3, B-4, B-5, B-6 and C (reverse of all Certificates) and shall, on original issue, be executed by the Trustee and shall be countersigned

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and delivered by the Trustee to or upon the order of the Depositor upon receipt by the Trustee of the documents specified in Section 2.01.  The Senior Certificates (other than the Class A-PO, Class A-WIO and Class A-R Certificates) shall be available to investors in interests representing minimum dollar Certificate Balances (or notional amounts) of $      and integral multiples of $      in excess thereof.  The Class A-WIO Certificates
shall be available to investors in interests representing minimum dollar Certificate Balances of $      and integral multiples of $      in excess thereof.  The Subordinate Certificates and the Class A-PO Certificates shall be available to investors in interests representing minimum dollar Certificate Balances of $      and integral dollar multiples of $      in excess thereof (except one Certificate of such Class may be issued with a different Certificate Balance.  The Class A-R and Class A-LR Certificates shall be in a minimum denomination of $     .  The Senior Certificates (other than the Class A-R and Class A-LR Certificates) and the Class B-1, Class B-2 and Class B-3 Certificates shall initially be issued in book-entry form through the Depository and delivered to the Depository or, pursuant to the Depository’s instructions on behalf of the Depository
to, and deposited with, the Certificate Custodian, and all other Classes of Certificates shall initially be issued in definitive, fully-registered form.

The Certificates shall be executed by manual or facsimile signature on behalf of the Trustee by an authorized officer or signatory.  Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Trustee shall bind the Trustee, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the execution and delivery of such Certificates or did not hold such offices or positions at the date of such Certificate.  No Certificate shall be entitled to any benefit under this Agreement, or be valid for any purpose, unless such Certificate shall have been manually countersigned by the Trustee substantially in the form provided for herein, and such countersignature upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder.  All Certificates shall be dated the date of their countersignature.

Section 6.02.  Registration of Transfer and Exchange of Certificates.

(a)               The Trustee shall cause to be kept at an office or agency in the city in which the Corporate Trust Office of the Trustee is located a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided.  The Trustee shall initially serve as Certificate Registrar for the purpose of registering Certificates and transfers and exchanges of Certificates as herein provided.

(b)               At the option of the Certificateholders, Certificates may be exchanged for other Certificates of authorized denominations of a like Class, tenor and aggregate Percentage Interest, upon surrender of the Certificates to be exchanged at any such office or agency.  Whenever any Certificates are so surrendered for exchange, the Trustee shall execute and the Trustee shall authenticate, countersign and deliver the Certificates which the Certificateholder making the exchange is entitled to receive.  Every Certificate presented or surrendered for transfer or exchange shall (if so required by the Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder thereof or its attorney duly authorized in writing.

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(c)               (i)  Except as provided in paragraph (c)(iii) below, the Book-Entry Certificates shall at all times remain registered in the name of the Depository or its nominee and at all times: (A) registration of the Certificates may not be transferred by the Trustee except to another Depository; (B) the Depository shall maintain book-entry records with respect to the Certificate Owners and with respect to ownership and transfers of such Book-Entry Certificates; (C) ownership and transfers of registration of the Book-Entry Certificates on the books of the Depository shall be governed by applicable rules established by the Depository; (D) the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants; (E) the Trustee shall
deal with the Depository as the representative of the Certificate Owners of the Book-Entry Certificates for purposes of exercising the rights of Holders under this Agreement, and requests and directions for and votes of the Depository shall not be deemed to be inconsistent if they are made with respect to different Certificate Owners; and (F) the Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect participating firms and persons shown on the books of such indirect participating firms as direct or indirect Certificate Owners.

 (ii)             All transfers by Certificate Owners of Book-Entry Certificates shall be made in accordance with the procedures established by the Depository Participant or brokerage firm representing such Certificate Owner.  Each Depository Participant shall only transfer Book-Entry Certificates of Certificate Owners it represents or of brokerage firms for which it acts as agent in accordance with the Depository’s normal procedures.

 (iii)            If (A) (1) the Depository or the Depositor advises the Trustee in writing that the Depository is no longer willing or able to properly discharge its responsibilities as Depository, and (2) the Trustee or the Depositor is unable to locate a qualified successor, (B) the Depositor at its option advises the Trustee in writing that it elects to terminate the book-entry system through the Depository or (C) after the occurrence of an Event of Default, Certificate Owners representing at least 51% of the aggregate Class Certificate Balances of the Book-Entry Certificates together advise the Trustee and the Depository through the Depository Participants in writing that the continuation of a book-entry system through the Depository is no longer in the best
interests of the Certificate Owners, the Trustee shall notify all Certificate Owners, through the Depository, of the occurrence of any such event and of the availability of definitive, fully-registered Certificates (the “Definitive Certificates”) to Certificate Owners requesting the same.  Upon surrender to the Trustee of the related Class of Certificates by the Depository (or by the Certificate Custodian, if it holds such Class on behalf of the Depository), accompanied by the instructions from the Depository for registration, the Trustee shall issue the Definitive Certificates.  None of the Servicer, the Depositor or the Trustee shall be liable for any delay in delivery of such instruction and may conclusively rely on, and shall be protected in relying on, such instructions.  The Depositor shall provide the Trustee with an adequate inventory of certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon the issuance of Definitive Certificates, the Trustee shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder.

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(d)               No transfer of a Private Certificate shall be made unless such transfer is exempt from the registration requirements of the 1933 Act and any applicable state securities laws or is made in accordance with the 1933 Act and such laws.  In the event of any such transfer, (i) unless such transfer is made in reliance on Rule 144A under the 1933 Act, the Trustee or the Depositor may require a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Trustee and the Depositor that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from the 1933 Act and such laws or is being made pursuant to the 1933 Act and such laws, which Opinion
of Counsel shall not be an expense of the Trustee or the Depositor and (ii) the Trustee shall require a certificate from the Certificateholder desiring to effect such transfer substantially in the form attached hereto as Exhibit G-1 and a certificate from such Certificateholder’s prospective transferee substantially in the form attached hereto either as Exhibit G-2A or as Exhibit G-2B, which certificates shall not be an expense of the Trustee or the Depositor; provided that the foregoing requirements under clauses (i) and (ii) shall not apply to a transfer of a Private Certificate between or among the Depositor, the Seller, their affiliates or both.  The Depositor shall provide to any Holder of a Private Certificate and any prospective transferees designated by any such Holder, information
regarding the related Certificates and the Mortgage Loans and such other information as shall be necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such certificate without registration thereof under the 1933 Act pursuant to the registration exemption provided by Rule 144A.  The Holder of a Private Certificate desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee and the Depositor against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

(e)               No transfer of an ERISA Restricted Certificate shall be made unless the transferee delivers to the Trustee either (i) a representation letter in the form of Exhibit H from the transferee of such Certificate, which representation letter shall not be an expense of the Depositor, the Trustee or the Servicer, or (ii) in the case of any ERISA Restricted Certificate presented for registration in the name of an employee benefit plan or arrangement, including an individual retirement account, subject to ERISA, the Code, or any federal, state or local law (“Similar Law”) which is similar to ERISA or the Code (collectively, a “Plan”), or a trustee or custodian of any of the foregoing, an Opinion of Counsel in form and substance satisfactory to the Trustee and the Servicer to the effect that the purchase or holding of such ERISA Restricted Certificate by or on behalf of such Plan will not result in the assets of the Trust Estate being deemed to be “plan assets” and subject to the prohibited transaction provisions of ERISA, the Code or Similar Law and will not subject the Trustee, the Depositor or the Servicer to any obligation in addition to those undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the Trustee or the Servicer.  Any transferee of an ERISA Restricted Certificate that does not comply with either clause (i) or (ii) of the preceding sentence will be deemed to have made one of the representations set forth in Exhibit H.  Notwithstanding anything else to the contrary herein,
any purported transfer of an ERISA Restricted Certificate to or on behalf of a Plan without the delivery to the Trustee and the Servicer of an Opinion of Counsel satisfactory to the Trustee and the Servicer as described above shall be void and of no effect.

Neither the Trustee nor the Certificate Registrar shall have any liability for transfers of Book-Entry Certificates made through the book-entry facilities of the Depository or between or among any Depository Participants or Certificate Owners, made in violation of

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 applicable restrictions.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect participating firms and Persons shown on the books of such indirect participating firms as direct or indirect Certificate Owners.

To the extent permitted under applicable law (including, but not limited to, ERISA), the Trustee shall be under no liability to any Person for any registration of transfer of any ERISA Restricted Certificate that is in fact not permitted by this Section 6.02 or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the transfer was registered by the Trustee in accordance with the foregoing requirements.

(f)                Each Person who has or who acquires any Ownership Interest in a Residual Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions, and the rights of each Person acquiring any Ownership Interest in a Residual Certificate are expressly subject to the following provisions:

(i)                Each Person holding or acquiring any Ownership Interest in a Residual Certificate shall be a Permitted Transferee and shall promptly notify the Trustee of any change or impending change in its status as a Permitted Transferee.

(ii)               No Person shall acquire an Ownership Interest in a Residual Certificate unless such Ownership Interest is a pro rata undivided interest.

(iii)              In connection with any proposed transfer of any Ownership Interest in a Residual Certificate, the Trustee shall require delivery to it, in form and substance satisfactory to it, of an affidavit in the form of Exhibit I hereto from the proposed transferee.

(iv)              Notwithstanding the delivery of an affidavit by a proposed transferee under clause (iii) above, if a Responsible Officer of the Trustee has actual knowledge that the proposed transferee is not a Permitted Transferee, no transfer of any Ownership Interest in a Residual Certificate to such proposed transferee shall be effected.

(v)               No Ownership Interest in a Residual Certificate may be purchased by or transferred to any Person that is not a U.S. Person, unless (A) such Person holds such Residual Certificate in connection with the conduct of a trade or business within the United States and furnishes the transferor and the Trustee with an effective Internal Revenue Service Form W-8ECI (or successor thereto) or (B) the transferee delivers to both the transferor and the Trustee an Opinion of Counsel from a nationally-recognized tax counsel to the effect that such transfer is in accordance with the requirements of the Code and the regulations promulgated thereunder and that such transfer of a Residual Certificate will not be disregarded for federal income tax purposes.

(vi)              Any attempted or purported transfer of any Ownership Interest in a Residual Certificate in violation of the provisions of this Section 6.02 shall be absolutely null and void and shall vest no rights in the purported transferee.  If any purported

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 transferee shall, in violation of the provisions of this Section 6.02, become a Holder of a Residual Certificate, then the prior Holder of such Residual Certificate that is a Permitted Transferee shall, upon discovery that the registration of transfer of such Residual Certificate was not in fact permitted by this Section 6.02, be restored to all rights as Holder thereof retroactive to the date of registration of transfer of such Residual Certificate.  The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that is in fact not permitted by this Section 6.02 or for making any distributions due on such Residual Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of the Agreement so long as the transfer was registered in accordance with this Section 6.02.  The Trustee shall be entitled to recover from any Holder of a Residual Certificate that was in fact not a Permitted Transferee at the time such distributions were made all distributions made on such Residual Certificate.  Any such distributions so recovered by the Trustee shall be distributed and delivered by the Trustee to the prior Holder of such Residual Certificate that is a Permitted Transferee.

(vii)             If any Person other than a Permitted Transferee acquires any Ownership Interest in a Residual Certificate in violation of the restrictions in this Section 6.02, then the Trustee, based on information provided to the Trustee by the Servicer, will provide to the Internal Revenue Service, and to the Persons specified in Section 860E(e)(3) and (6) of the Code, information needed to compute the tax imposed under Section 860E(e) of the Code on transfers of residual interests to disqualified organizations.  The expenses of the Trustee under this clause (vii) shall be reimbursable by the Trust.

(viii)            No Ownership Interest in a Residual Certificate shall be acquired by a Plan or any Person acting on behalf of a Plan.

(g)               [Reserved]

(h)               No service charge shall be imposed for any transfer or exchange of Certificates of any Class, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

(i)                All Certificates surrendered for transfer and exchange shall be destroyed by the Certificate Registrar.

Section 6.03.  Mutilated, Destroyed, Lost or Stolen Certificates.  If (a) any mutilated Certificate is surrendered to the Certificate Registrar or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate, and (b) there is delivered to the Trustee, the Depositor and the Certificate Registrar such security or indemnity reasonably satisfactory to each, to save each of them harmless, then, in the absence of actual notice to the Trustee or the Certificate Registrar that such Certificate has been acquired by a bona fide purchaser, the Trustee shall countersign and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor, Class and Percentage Interest but bearing a number not contemporaneously outstanding.  Upon the
issuance of any new Certificate under this Section, the Trustee may require the payment of a sum

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 sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee and the Certificate Registrar) connected therewith.  Any duplicate Certificate issued pursuant to this Section shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

Section 6.04.  Persons Deemed Owners.  Prior to due presentation of a Certificate for registration of transfer, the Depositor, the Servicer, the Trustee, the Certificate Registrar and any agent of the Depositor, the Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 5.01 and for all other purposes whatsoever, and none of the Depositor, the Servicer, the Trustee, the Certificate Registrar or any agent of the Servicer, the Trustee or the Certificate Registrar shall be affected by notice to the contrary.

ARTICLE VII

 

THE DEPOSITOR AND THE SERVICER

Section 7.01.  Respective Liabilities of the Depositor and the Servicer.  The Depositor and the Servicer shall each be liable in accordance herewith only to the extent of the obligations specifically and respectively imposed upon and undertaken by the Depositor and the Servicer herein.  By way of illustration and not limitation, the Depositor is not liable for the servicing and administration of the Mortgage Loans, nor is it obligated by Section 8.01 to assume any obligations of the Servicer or to appoint a designee to assume such obligations, nor is it liable for any other obligation hereunder that it may, but is not obligated to, assume unless it elects to assume such obligation in accordance herewith.

Section 7.02.  Merger or Consolidation of the Depositor or the Servicer.  The Depositor and the Servicer will each keep in full effect its existence, rights and franchises as a separate entity under the laws governing its organization, and will each obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Certificates or any of the Mortgage Loans and to perform its respective duties under this Agreement.

Any Person into which the Depositor or the Servicer may be merged or consolidated, or any corporation or other organization resulting from any merger or consolidation to which the Depositor or the Servicer shall be a party, or any Person succeeding to the business of the Depositor or the Servicer, shall be the successor of the Depositor or the Servicer, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor or surviving Person to the Servicer shall be qualified to service mortgage loans on behalf of FNMA or FHLMC.

Section 7.03.  Limitation on Liability of the Depositor, the Servicer and Others.  None of the Depositor, the Servicer or any of the directors, officers, employees or agents of the Depositor or of the Servicer shall be under any liability to the Trust Estate or the

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Certificateholders for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Depositor, the Servicer or any such Person against any breach of warranties or representations made herein or any liability which would otherwise be imposed by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.  The Depositor, the Servicer and any director, officer, employee or agent of the Depositor or the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder.  The Depositor, the Servicer and any director, officer, employee or agent of the Depositor or the Servicer shall be indemnified by the Trust Estate and held harmless against any loss, liability or expense incurred in connection with any legal action relating to this Agreement or the Certificates, other than any loss, liability or expense related to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) and any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder.  Neither of the Depositor nor the Servicer shall be under any obligation to appear in, prosecute or defend any legal action which is not incidental to its respective duties under this Agreement and which in its opinion may involve it in any expense or liability; provided, however, that the Depositor or the Servicer may in its discretion undertake any such action which it may deem necessary or desirable in respect to this Agreement and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder.  In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust Estate, and the Depositor and the Servicer shall be entitled to be reimbursed therefor out of amounts attributable to the Mortgage Loans on deposit in the Servicer Custodial Account
as provided by Section 3.11.

Section 7.04.  Depositor and Servicer Not to Resign.  Subject to the provisions of Section 7.02, neither the Depositor nor the Servicer shall resign from its respective obligations and duties hereby imposed on it except upon determination that its duties hereunder are no longer permissible under applicable law.  Any such determination permitting the resignation of the Depositor or the Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.  No such resignation by the Servicer shall become effective until the Trustee or a successor Servicer shall have assumed the Servicer’s responsibilities and obligations in accordance with Section 8.05 hereof.

ARTICLE VIII

 

DEFAULT

Section 8.01.  Events of Default.  If any one of the following events (“Events of Default”) shall occur and be continuing:

(a)               any failure by the Servicer to deposit amounts in the Servicer Custodial Account in the amount and manner provided herein so as to enable the Trustee to distribute to Holders of Certificates any payment required to be made under the terms of such Certificates and this Agreement (other than the payments required to be made under Section 3.20) which continues unremedied for a period of five days; or

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(b)               failure on the part of the Servicer duly to observe or perform in any material respect any other covenants or agreements of the Servicer set forth in the Certificates or in this Agreement, which covenants and agreements continue unremedied for a period of 30 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Servicer by the Trustee or the Depositor, or to the Servicer, the Depositor and the Trustee by the Holders of Certificates evidencing Voting Rights aggregating not less than 25% of all Certificates affected thereby; or

(c)               the entry of a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings against the Servicer, or for the winding up or liquidation of the Servicer’s affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or

(d)               the consent by the Servicer to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Servicer or of or relating to substantially all of its property; or the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations; or

(e)               the failure of the Servicer to remit any Periodic Advance required to be remitted by the Servicer pursuant to Section 3.20 which failure continues unremedied at 3:00 p.m. on the related Distribution Date;

then, and in each and every such case, so long as an Event of Default shall not have been remedied by the Servicer, either the Trustee or the Depositor may, and at the direction of the Holders of Certificates evidencing Voting Rights aggregating not less than 51% of all Certificates affected thereby shall, by notice then given in writing to the Servicer (and to the Trustee, if given by the Depositor, and to the Depositor, if given by the Trustee), terminate all of the rights and obligations of the Servicer under this Agreement.  If an Event of Default described in clause (e) hereof shall occur, the Trustee shall, by notice to the Servicer, terminate all of the rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and proceeds thereof and the Trustee or a successor Servicer appointed pursuant to Section 8.05 shall make the Advance which the Servicer failed to make.  On
or after the receipt by the Servicer of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Certificates or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee pursuant to and under this Section 8.01, unless and until such time as the Trustee shall appoint a successor Servicer pursuant to Section 8.05, and, without limitation, the
Trustee is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice

 

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 of termination, whether to complete the transfer and endorsement of the Mortgage Loans and related documents, or otherwise, including, without limitation, the recordation of the assignments of the Mortgage Loans to it. The Servicer agrees to cooperate with the Trustee in effecting the termination of the responsibilities and rights of the Servicer hereunder, including, without limitation, the transfer to the Trustee for the administration by it of all cash amounts that have been deposited by the Servicer in the Servicer Custodial Account or thereafter received by the Servicer with respect to the Mortgage Loans.  Upon obtaining
notice or knowledge of the occurrence of any Event of Default, the Person obtaining such notice or knowledge shall give prompt written notice thereof to Certificateholders at their respective addresses appearing in the Certificate Register and to each Rating Agency.  All costs and expenses (including attorneys’ fees) incurred in connection with transferring the Mortgage Files to the successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section 8.01 shall be paid by the predecessor Servicer.  Notwithstanding the termination of the Servicer pursuant hereto, the Servicer shall remain liable for any causes of action arising out of any Event of Default occurring prior to such termination.

Section 8.02.  Remedies of Trustee.  During the continuance of any Event of Default, so long as such Event of Default shall not have been remedied, the Trustee, in addition to the rights specified in Section 8.01, shall have the right, in its own name as trustee of an express trust, to take all actions now or hereafter existing at law, in equity or by statute to enforce its rights and remedies and to protect the interests, and enforce the rights and remedies, of the Certificateholders (including the institution and prosecution of all judicial, administrative and other proceedings and the filing of proofs of claim and debt in connection therewith).  Except as otherwise expressly provided in this Agreement, no remedy provided for by this Agreement shall be exclusive of any other remedy, and each and every remedy shall be cumulative and in
addition to any other remedy and no delay or omission to exercise any right or remedy shall impair any such right or remedy or shall be deemed to be a waiver of any Event of Default.

Section 8.03.  Directions by Certificateholders and Duties of Trustee During Event of Default.  During the continuance of any Event of Default, Holders of Certificates evidencing Voting Rights aggregating not less than 25% of each Class of Certificates affected thereby may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Agreement; provided, however, that the Trustee shall be under no obligation to pursue any such remedy, or to exercise any of the trusts or powers vested in it by this Agreement (including, without limitation, (a) the conducting or defending of any administrative action or litigation hereunder or in relation
hereto, and (b) the terminating of the Servicer or any successor Servicer from its rights and duties as servicer hereunder) at the request, order or direction of any of the Certificateholders, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby and, provided further, that, subject to the provisions of Section 9.01, the Trustee shall have the right to decline to follow any such direction if the Trustee, based upon an Opinion of Counsel, determines that the action or proceeding so directed may not lawfully be taken or if the
Trustee in good faith determines that the action or proceeding so directed would involve it in personal liability or be unjustly prejudicial to the non-assenting Certificateholders.

 

 

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Section 8.04.  Action upon Certain Failures of the Servicer and upon Event of Default.  In the event that the Trustee shall have actual knowledge of any failure of the Servicer specified in Section 8.01(a) or (b) which would become an Event of Default upon the Servicer’s failure to remedy the same after notice, the Trustee shall give notice thereof to the Servicer.  If the Trustee shall have knowledge of an Event of Default, the Trustee shall give prompt written notice thereof to the Certificateholders.

Section 8.05.  Trustee to Act; Appointment of Successor.

(a)               On and after the time the Servicer receives a notice of termination pursuant to Section 8.01, the Trustee shall be the successor in all respects to the Servicer in its capacity as servicer under this Agreement and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof or shall appoint a successor pursuant to Section 3.07.  Notwithstanding anything provided herein to the contrary, under no circumstances shall any provision of this Agreement be construed to require the Trustee, acting in its capacity as successor to the Servicer in its obligation to make Advances, to advance, expend or risk its own funds or otherwise
incur any financial liability in the performance of its duties hereunder if it shall have reasonable grounds for believing that such funds are non-recoverable.  Subject to Section 8.05(b), as compensation therefor, the Trustee shall be entitled to such compensation as the terminated Servicer would have been entitled to hereunder if no such notice of termination had been given.  Notwithstanding the above, the Trustee may, if it shall be unwilling so to act, or shall, if it is legally unable so to act, appoint, or petition a court of competent jurisdiction to appoint, any established housing and home finance institution having a net worth of not less than $10,000,000 as the successor to the terminated Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Servicer hereunder; provided, however, that any such institution appointed as
successor Servicer shall not, as evidenced in writing by each Rating Agency, adversely affect the then current rating of any Class of Certificates immediately prior to the termination of the terminated Servicer.  The appointment of a successor Servicer shall not affect any liability of the predecessor Servicer which may have arisen under this Agreement prior to its termination as Servicer, nor shall any successor Servicer be liable for any acts or omissions of the predecessor Servicer or for any breach by the Servicer of any of its representations or warranties contained herein or in any related document or agreement.  Pending appointment of a successor to the terminated Servicer hereunder, unless the Trustee is prohibited by law from so acting, the Trustee shall act in such capacity as provided above. The Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession.

(b)               In connection with the appointment of a successor Servicer or the assumption of the duties of the Servicer, as specified in Section 8.05(a), the Trustee may make such arrangements for the compensation of such successor out of payments on Mortgage Loans serviced by the predecessor Servicer as it and such successor shall agree; provided, however, that any Person assuming the duties of the Servicer shall pay to such predecessor an amount equal to the market value of the portion of the Servicing Fee that will accrue in the future due to the
Servicing Fee Rate exceeding      % per annum with respect to any Mortgage Loan.  The “market value” of such portion of the Servicing Fee shall be determined by      , on the basis of at least two quotations from third parties actively engaged in the servicing of single-family mortgage

 

 

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 loans.  If the successor Servicer does not agree that such market value is a fair price, such successor shall obtain two quotations of market value from third parties actively engaged in the servicing of single-family mortgage loans.  The market value of the excess portion of the Servicing Fee will then be equal to the average of (i) the lowest figure obtained by      , and (ii) the highest figure obtained by the successor Servicer.  Payment of the amount calculated above shall be made to      , by the successor
Servicer no later than the last Business Day of the month in which such successor Servicer becomes entitled to receive the Servicing Fee under this Agreement.  In no event will any portion of the Trust Estate be used to pay amounts due to       under this Section 8.05(b).

(c)               Any successor, including the Trustee, to the Servicer as servicer shall during the term of its service as servicer maintain in force (i) a policy or policies of insurance covering errors and omissions in the performance of its obligations as servicer hereunder and (ii) a fidelity bond in respect of its officers, employees and agents to the same extent as the Servicer is so required pursuant to Section 3.03.

Section 8.06.  Notification to Certificateholders.  Upon any termination or appointment of a successor to the Servicer pursuant to this Article VIII, the Trustee shall give prompt written notice thereof to Certificateholders at their respective addresses appearing in the Certificate Register and to each Rating Agency.

ARTICLE IX

 

THE TRUSTEE

Section 9.01.  Duties of Trustee.

(a)               The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Agreement.  In case an Event of Default has occurred of which a Responsible Officer of the Trustee shall have actual knowledge (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Agreement, and use the same degree of care and skill in their exercise as a reasonably prudent investor would exercise or use under the circumstances in the conduct of such investor’s own affairs.

The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee which are specifically required to be furnished pursuant to any provision of this Agreement, shall examine them to determine whether they conform to the requirements of this Agreement.

(b)               No provision of this Agreement shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misfeasance; provided, however, that:

(i)                Prior to the occurrence of an Event of Default, and after the curing or waiver of all such Events of Default which may have occurred, the duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, the

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 Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee by the Depositor or
the Servicer and which on their face, do not contradict the requirements of this Agreement;

(ii)               The Trustee (in its individual capacity) shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;

(iii)              The Trustee (in its individual capacity) shall not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of Certificateholders as provided in Section 8.03;

(iv)              The Trustee shall not be charged with knowledge of any default (other than a default in payment to the Trustee) specified in clauses (a) and (b) of Section 8.01 or an Event of Default under clauses (c), (d) and (e) of Section 8.01 unless a Responsible Officer of the Trustee assigned to and working in the Corporate Trust Office obtains actual knowledge of such failure or event or any officer of the Trustee receives written notice of such failure or event at its Corporate Trust Office from the Servicer, the Depositor or any Certificateholder; and

(v)               Except to the extent provided in Section 8.05, no provision in this Agreement shall require the Trustee to expend or risk its own funds (including, without limitation, the making of any Advance as successor Servicer) or otherwise incur any personal financial liability in the performance of any of its duties as Trustee hereunder, or in the exercise of any of its rights or powers, if the Trustee shall have reasonable grounds for believing that repayment of funds or adequate indemnity against such risk or liability is not reasonably assured to it.

Section 9.02.  Certain Matters Affecting the Trustee.

Except as otherwise provided in Section 9.01:

(i)                The Trustee may request and rely upon and shall be protected in acting or refraining from acting upon any resolution, Officer’s Certificate, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(ii)               The Trustee may consult with counsel and any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance with such Opinion of Counsel;

 

 

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(iii)              The Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Agreement or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default (which has not been cured or waived), to exercise such of the rights and powers vested in it by this Agreement, and to use the same
degree of care and skill in their exercise as a prudent investor would exercise or use under the circumstances in the conduct of such investor’s own affairs;

(iv)              The Trustee shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

(v)               Prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default which may have occurred, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing so to do by Holders or Certificate or any Class evidencing, as to such Class, Percentage Interests, aggregating not less than 50%; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity against such expense or liability or payment of such estimated expenses as a condition to so proceeding; and

(vi)              The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys.

Section 9.03.  Trustee Not Liable for Certificates or Mortgage Loans.  The recitals contained herein and in the Certificates (other than the execution of, and the counter-signature on the Certificates) shall be taken as the statements of the Depositor or Servicer, as applicable, and the Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to the validity or sufficiency of this Agreement or of the Certificates or any Mortgage Loans save that the Trustee represents that, assuming due execution and delivery by the other parties hereto, this Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject, as to enforcement of remedies, to applicable insolvency, receivership, moratorium
and other laws affecting the rights of creditors generally, and to general principles of equity and the discretion of the court (regardless of whether enforcement of such remedies is considered in a proceeding in equity or at law).  The Trustee shall not be accountable for the use or application by the Depositor of funds paid to the Depositor in consideration of the assignment of the Mortgage Loans hereunder by the Depositor, or for the use or application of any funds paid to Subservicers or the Servicer in respect of the Mortgage Loans or deposited into the

 

 

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 Servicer Custodial Account, or any other account hereunder (other than the Certificate Account) by the 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 Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the successor Servicer); the validity of the assignment of any Mortgage Loan to the Trustee or of any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan (other than if the Trustee shall assume the duties of the Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee as successor Servicer); the compliance by the Depositor or the Servicer with any warranty or representation made under this Agreement or in any related document or the accuracy of any such warranty or representation; any investment of monies by or at the direction of the Servicer or any loss resulting therefrom, it being understood that the Trustee shall remain responsible for any Trust property that it may hold in its individual capacity; the acts or omissions of any of the Depositor, the Servicer (other than if the Trustee shall assume the duties of the Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee as successor Servicer), any Subservicer or any Mortgagor; any action of the Servicer (other than if the Trustee shall assume the duties of the
Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee as successor Servicer) or any Subservicer taken in the name of the Trustee; the failure of the Servicer or any Subservicer to act or perform any duties required of it as agent of the Trustee hereunder; or any action by the Trustee taken at the instruction of the Servicer (other than if the Trustee shall assume the duties of the Servicer pursuant to Section 8.05 and thereupon only for the acts or omissions of the Trustee as successor Servicer); provided, however, that the foregoing shall not relieve the Trustee of its obligation to perform its duties under this Agreement, including, without limitation, the Trustee’s review of the Mortgage Files pursuant to Section 2.02.  The Trustee shall file any financing or continuation statement in any public office at any time required to maintain the
perfection of any security interest or lien granted to it hereunder.

Section 9.04.  Trustee May Own Certificates.  The Trustee in its individual or any other capacity may become the owner or pledgee of Certificates with the same rights it would have if it were not Trustee and may otherwise deal with the Servicer, any Subservicer or any of their respective affiliates with the same right it would have if it were not the Trustee.

Section 9.05.  Eligibility Requirements for Trustee.  The Trustee hereunder shall at all times be (a) an institution the deposits of which are fully insured by the FDIC and (b) a corporation or banking association organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority and (c) with respect to every successor trustee hereunder either an institution (i) the long-term unsecured debt obligations of which are rated at

 

 

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 least “     ” by       and       or (ii) whose serving as Trustee hereunder would not result in the lowering of the ratings originally assigned to any Class of Certificates.  The Trustee shall not be an affiliate of the Depositor or the Servicer.  If such corporation or banking association publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 9.05, the combined capital and surplus of such corporation or banking
association shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  In case at any time the Trustee shall cease to be eligible in accordance with the provision of this Section 9.05, the Trustee shall resign immediately in the manner and with the effect specified in Section 9.06.

Section 9.06.  Resignation and Removal of Trustee.  The Trustee may at any time resign and be discharged from the trust hereby created by giving written notice thereof to the Servicer and mailing a copy of such notice to all Holders of record.  The Trustee shall also mail a copy of such notice of resignation to each Rating Agency.  Upon receiving such notice of resignation, the Servicer shall use their best efforts to promptly appoint a mutually acceptable successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee.  If no successor Trustee shall have been so appointed and shall have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor Trustee.

If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section 9.05 and shall fail to resign after written request therefor by the Servicer, or if at any time the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Servicer may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor.

The Holders of Certificates evidencing not less than 50% of the Voting Rights may at any time remove the Trustee by written instrument or instruments delivered to the Servicer and the Trustee; the Servicer shall thereupon use their best efforts to appoint a mutually acceptable successor Trustee in accordance with this Section 9.06.

Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to any of the provisions of this Section 9.06 shall become effective upon acceptance of appointment by the successor Trustee as provided in Section 9.07.

Section 9.07.  Successor Trustee.  Any successor Trustee appointed as provided in Section 9.06 shall execute, acknowledge and deliver to the Servicer and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein.  The predecessor Trustee shall duly assign, transfer, deliver and pay over to the successor

 

 

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 Trustee the whole of the Mortgage Files and related documents and statements held by it hereunder, together with all instruments of transfer and assignment or other documents properly executed as may be reasonably required to effect such transfer and such of the records or copies thereof maintained by the predecessor Trustee in the administration hereof as may be reasonably requested by the successor Trustee and shall thereupon be discharged from all duties and responsibilities under this Agreement; provided, however, that
if the predecessor Trustee has been terminated pursuant to the third paragraph of Section 9.06, all reasonable expenses of the predecessor Trustee incurred in complying with this Section 9.07 shall be reimbursed by the Trust.

No successor Trustee shall accept appointment as provided in this Section 9.07 unless at the time of such appointment such successor Trustee shall be eligible under the provisions of Section 9.05.

Upon acceptance of appointment by a successor Trustee as provided in this Section 9.07, the Servicer shall cooperate to mail notice of the succession of such Trustee hereunder to all Holders of Certificates at their addresses as shown in the Certificate Register and to each Rating Agency.  If the Servicer fail to mail such notice within ten days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Servicer.

Section 9.08.  Merger or Consolidation of Trustee.  Any corporation or banking association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or banking association succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, if such corporation or banking association is eligible under the provisions of Section 9.05, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

Section 9.09.  Appointment of Co-Trustee or Separate Trustee.  Notwithstanding any of the provisions hereof, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any Mortgaged Property may at the time be located or for any other reason, the Servicer and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee as co-trustee or separate trustee of all or any part of the Trust Estate, and to vest in such Person or Persons, in such capacity, such title to the Trust Estate, or any part thereof, and, subject to the other provision of this Section 9.09, such powers, duties, obligations, rights and trusts as the Servicer and the Trustee may consider necessary or desirable.  If the Servicer shall not have joined in such
appointment within ten days after the receipt by it of a request to do so, the Trustee alone shall have the power to make such appointment.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor Trustee under Section 9.05 and no notice to Holders of Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be required under Section 9.07.

In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 9.09, all rights, powers, duties and obligations conferred or imposed upon the Trustee

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 shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed by such separate trustee or co-trustee at the direction of the Trustee.  No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; provided, however, that no appointment of a co-trustee or separate trustee hereunder shall relieve the Trustee of its obligations hereunder.

Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article IX.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee.  Every such instrument shall be filed with the Trustee.

Any separate trustee or co-trustee may, at any time, constitute the Trustee, its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall become incapable of acting, resign or be removed, or shall be adjudged a bankrupt or insolvent, or a receiver of its property shall be appointed, or any public officer shall take charge or control of such trustee or co-trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

Section 9.10.  Authenticating Agents.  The Trustee may appoint one or more authenticating agents (“Authenticating Agents”) which shall be authorized to act on behalf of the Trustee in authenticating or countersigning Certificates.  Initially, the Authenticating Agent shall be      .  Wherever reference is made in this Agreement to the authentication or countersigning of Certificates by the Trustee or the Trustee’s certificate of authentication or countersigning, such reference shall be deemed to include authentication or countersigning on behalf of the Trustee by an Authenticating Agent and a certificate of authentication or countersignature executed on behalf of the Trustee by an Authenticating Agent.  Each Authenticating Agent must be acceptable to the
Servicer and must be a corporation or banking association organized and doing business under the laws of the United States of America or of any State, having a principal office and place of business in New York, New York, having a combined capital and surplus of at least $15,000,000, authorized under such laws to do a trust business and subject to supervision or examination by Federal or State authorities.

Any corporation or banking association into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or banking

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 association resulting from any merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any corporation or banking association succeeding to the corporate agency business of any Authenticating Agent, shall continue to be the Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Servicer.  The Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Servicer.  Upon receiving a notice of resignation or upon such a termination, or in case, at any time any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 9.10, the Trustee may appoint a successor Authenticating Agent, shall give written notice of such appointment to the Servicer and shall mail notice of such appointment to all Certificateholders.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent.

Section 9.11.  Trustee’s Fees and Expenses.  The Trustee, as compensation for its activities hereunder, shall be entitled to receive on each Distribution Date an amount equal to the Trustee Fee for such Distribution Date pursuant to Section 5.02(a).  The Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified by the Trust and held harmless against any loss, liability or expense (including reasonable attorney’s fees) (a) incurred in connection with any claim or legal action relating to (i) this Agreement, (ii) the Certificates, or (iii) the performance of any of the Trustee’s duties hereunder, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or gross negligence in the performance of any of the Trustee’s duties hereunder, (b) resulting from any tax or information return which was prepared by, or should have been prepared by, the Servicer and (c) arising out of the transfer of any Private Certificate not in compliance with ERISA.  Such indemnity shall survive the termination of this Agreement or the resignation or removal of the Trustee hereunder.  Without limiting the
foregoing, except as otherwise agreed upon in writing by the Depositor and the Trustee, and except for any such expense, disbursement or advance as may arise from the Trustee’s gross negligence, bad faith or willful misconduct, the Trust shall reimburse the Trustee for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Agreement to the extent permitted by Treasury Regulations Section 1.860G-1(b)(3)(ii) and (iii); provided, however, that the Depositor and the Trustee intend to enter into a separate agreement for custody-related services.  Except as otherwise provided herein, the Trustee shall not be entitled to payment or reimbursement for any routine ongoing expenses incurred by the Trustee in the ordinary course of its duties as Trustee, Certificate Registrar or Paying Agent hereunder or for any other
expenses.

Section 9.12.  Appointment of Custodian.  The Trustee may at any time on or after the Closing Date, with the consent of the Depositor and the Servicer, appoint one or more Custodians to hold all or a portion of the Mortgage Files as agent for the Trustee, by entering into a custodial agreement in a form acceptable to the Depositor and the Servicer.  Subject to this Article IX, the Trustee agrees to comply with the terms of each Custodial Agreement and to enforce the terms and provisions thereof against the Custodian for the benefit of the

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 Certificateholders. Each Custodian shall be a depository institution subject to supervision by federal or state authority, shall have a combined capital and surplus of at least $10,000,000 and shall be qualified to do business in the jurisdiction in which it holds any Mortgage File.

Section 9.13.  Paying Agents.  The Trustee may appoint one or more Paying Agents (each, a “Paying Agent”) which shall be authorized to act on behalf of the Trustee in making withdrawals from the Certificate Account and distributions to Certificateholders as provided in Section 3.08 and Section 5.02.  Wherever reference is made in this Agreement to the withdrawal from the Certificate Account by the Trustee, such reference shall be deemed to include such a withdrawal on behalf of the Trustee by a Paying Agent.  Initially, the Paying Agent shall be      .  Whenever reference is made in this Agreement to a distribution by the Trustee or the furnishing of a statement to Certificateholders by the Trustee, such reference shall be deemed to include such a distribution or
furnishing on behalf of the Trustee by a Paying Agent.  Each Paying Agent shall provide to the Trustee such information concerning the Certificate Account as the Trustee shall request from time to time.  Each Paying Agent must be reasonably acceptable to the Servicer and must be a corporation or banking association organized and doing business under the laws of the United States of America or of any state, having (except in the case of the Trustee) a principal office and place of business in New York, New York, having a combined capital and surplus of at least $15,000,000, authorized under such laws to do a trust business and subject to supervision or examination by federal or state authorities.

Any corporation into which any Paying Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which any Paying Agent shall be a party, or any corporation succeeding to the corporate agency business of any Paying Agent, shall continue to be the Paying Agent provided that such corporation after the consummation of such merger, conversion, consolidation or succession meets the eligibility requirements of this Section 9.13.

Any Paying Agent may at any time resign by giving written notice of resignation to the Trustee and to the Servicer; provided that the Paying Agent has returned to the Certificate Account or otherwise accounted, to the reasonable satisfaction of the Trustee, for all amounts it has withdrawn from the Certificate Account.  The Trustee may, upon prior written approval of the Servicer, at any time terminate the agency of any Paying Agent by giving written notice of termination to such Paying Agent and to the Servicer.  Upon receiving a notice of resignation or upon such a termination, or in case at any time any Paying Agent shall cease to be eligible in accordance with the provisions of the first paragraph of this Section 9.13, the Trustee may appoint, upon prior written approval of the Servicer, a successor Paying Agent, shall give written notice
of such appointment to the Servicer and shall mail notice of such appointment to all Certificateholders.  Any successor Paying Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Paying Agent. The Trustee shall remain liable for any duties and obligations assumed by its appointed Paying Agent.

Section 9.14.  Limitation of Liability.  The Certificates are executed by the Trustee, not in its individual capacity but solely as Trustee of the Trust, in the exercise of the powers and authority conferred and vested in it by this Agreement.  Each of the undertakings and agreements made on the part of the Trustee in the Certificates is made and intended not as a

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 personal undertaking or agreement by the Trustee but is made and intended for the purpose of binding only the Trust.

Section 9.15.  Trustee May Enforce Claims Without Possession of Certificates.  All rights of action and claims under this Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, and such preceding instituted by the Trustee shall be brought in its own name or in its capacity as Trustee.  Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursement and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Certificateholders in respect of which such judgment has been recovered.

Section 9.16.  Suits for Enforcement.  In case an Event of Default or other default by the Servicer or the Depositor hereunder shall occur and be continuing, the Trustee, in its discretion, may proceed to protect and enforce its rights and the rights of the Holders of Certificates under this Agreement by a suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Agreement or in aid of the execution of any power granted in this Agreement or for the enforcement of any other legal, equitable or other remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights of the Trustee and the Certificateholders.

Section 9.17.  Waiver of Bond Requirement.  The Trustee shall be relieved of, and each Certificateholder hereby waives, any requirement of any jurisdiction in which the Trust, or any part thereof, may be located that the Trustee post a bond or other surety with any court, agency or body whatsoever.

Section 9.18.  Waiver of Inventory, Accounting and Appraisal Requirement.  The Trustee shall be relieved of, and each Certificateholder hereby waives, any requirement of any jurisdiction in which the Trust, or any part thereof, may be located that the Trustee file any inventory, accounting or appraisal of the Trust with any court, agency or body at any time or in any manner whatsoever.

ARTICLE X

 

TERMINATION

Section 10.01.  Termination upon Purchase by the Depositor or Liquidation of All Mortgage Loans.  Subject to Section 10.02, the respective obligations and responsibilities of the Depositor, the Servicer and the Trustee created hereby (other than the obligation of Trustee to make certain payments to Certificateholders after the Final Distribution Date and to send certain notices as hereinafter set forth and the obligations of the Trustee pursuant to Sections 5.04(b) and 5.05(b)) shall terminate upon the last action required to be taken by the Trustee on the Final Distribution Date pursuant to this Article X following the earlier of (a) the purchase by the
Depositor of all Mortgage Loans and all REO Property remaining in the Trust Estate at a price equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan (other than any Mortgage Loan as to which REO Property has been acquired and whose fair market value is included pursuant to clause (ii) below) and (ii) the fair market value of such REO Property (as

 

 

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 determined by the Depositor as of the close of business on the third Business Day next preceding the date upon which notice of any such termination is furnished to Certificateholders pursuant to the fourth paragraph of this Article X), plus any Class Unpaid Interest Shortfall for any Class of Certificates as well as one month’s interest at the related Mortgage Rate on the Stated Principal Balance of each Mortgage Loan (including any Mortgage Loan as to which REO Property has been acquired) or (b) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan remaining in the Trust Estate or the disposition of all REO Property.

Regardless of the foregoing, in no event shall the Trust created hereby continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James, living on the date hereof.

The right of the Depositor to repurchase all of the Mortgage Loans is conditioned upon the Pool Stated Principal Balance as of the Final Distribution Date being less than 1% of the Cut-off Date Pool Principal Balance.  If such right is exercised, the Trustee shall, promptly following payment of the purchase price, release to the Depositor or its designee the Mortgage Files pertaining to the Mortgage Loans being purchased.

Notice of any termination, specifying the Final Distribution Date (which shall be a date that would otherwise be a Distribution Date) upon which the Certificateholders may surrender their Certificates to the Trustee for payment of the final distribution and for cancellation, shall be given promptly by the Depositor (if exercising its right to purchase the assets of the Trust) or by the Trustee (in any other case) by letter to Certificateholders mailed not earlier than the 15th day and not later than the 20th day of the month next preceding the month of such final distribution specifying (1) the Final Distribution Date upon which final payment of the Certificates will be made upon presentation and surrender of Certificates at the office or agency of the Trustee therein designated, (2) the amount of any such final payment and (3) that the Record Date otherwise applicable to
such Distribution Date is not applicable, payments being made only upon presentation and surrender of the Certificates at the office or agency of the Trustee therein specified.  If the Depositor is obligated to give notice to Certificateholders as aforesaid, it shall give such notice to the Trustee and the Certificate Registrar at the time such notice is given to Certificateholders.  In the event such notice is given by the Depositor, the Depositor shall deposit in the Certificate Account on or before the Final Distribution Date in immediately available funds an amount equal to the amount necessary to make the amount, if any, on deposit in the Certificate Account on the Final Distribution Date equal to the purchase price for the related assets of the Trust computed as above provided together with a statement as to the amount to be distributed on each Class of Certificates pursuant to the next succeeding paragraph.

Upon presentation and surrender of the Certificates, the Trustee shall cause to be distributed to Certificateholders of each Class, in the order set forth in Section 5.02 hereof, on the Final Distribution Date and in proportion to their respective Percentage Interests, with respect
to Certificateholders of the same Class, an amount equal to (I) as to each Class of Certificates, the Class Certificate Balance thereof plus (a) accrued interest thereon in the case of an interest bearing Certificate and (b) the Class A-PO Deferred Amount with respect to the Class A-PO Certificates, and (II) as to the Class A-R and A-LR Certificates, the amounts, if any, which

 

 

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 remain on deposit in the Upper-Tier Certificate Account and the Certificate Account, respectively (other than the amounts retained to meet claims) after application pursuant to clause (I) above.  An amount shall be distributed in respect of interest and principal to the Uncertificated Lower-Tier Interests in the same amounts as distributed to their Corresponding Upper-Tier Class or Classes.

If all of the Certificateholders do not surrender their Certificates for final payment and cancellation on or before the Final Distribution Date, the Trustee shall on such date cause all funds in the Certificate Account not distributed in final distribution to Certificateholders to continue to be held by the Trustee in an Eligible Account for the benefit of such Certificateholders and the Depositor (if it exercised its right to purchase the assets of the Trust Estate) or the Trustee (in any other case) shall give a second written notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the final distribution with respect thereto.  If within one year after the second notice all the Certificates shall not have been surrendered for cancellation, the Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and the cost thereof shall be paid out of the funds on deposit in such Eligible Account.

Section 10.02.  Additional Termination Requirements.

(a)               If the Depositor exercises its purchase option as provided in Section 10.01, the Trust shall be terminated in accordance with the following additional requirements, unless the Trustee has received an Opinion of Counsel to the effect that the failure of the Trust to comply with the requirements of this Section 10.02 will not (i) result in the imposition of taxes on “prohibited transactions” of the Trust as defined in Section 860F of the Code, or (ii) cause the Trust Estate to fail to qualify as two separate REMICs at any time that any Certificates are outstanding:

(i)                within 90 days prior to the Final Distribution Date set forth in the notice given by the Depositor under Section 10.01, the Trustee shall sell all of the assets of the Trust Estate to the Depositor for cash; and

(ii)               the notice given by the Depositor or the Trustee pursuant to Section 10.01 shall provide that such notice constitutes the adopting of a plan of complete liquidation of the Upper-Tier REMIC and the Lower-Tier REMIC as of the date of such notice (or, if earlier, the date on which such notice was mailed to Certificateholders).  The Trustee shall also specify such date in the final tax return of the Upper-Tier REMIC and Lower-Tier REMIC.

(b)               By their acceptance of the Residual Certificates, the Holders thereof hereby agree to take such other action in connection with such plan of complete liquidation as may be reasonably requested by the Depositor.

 

 

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ARTICLE XI

 

MISCELLANEOUS PROVISIONS

Section 11.01.  Amendment.  This Agreement may be amended from time to time by the Depositor, the Servicer and the Trustee without the consent of any of the Certificateholders, (i) to cure any ambiguity or mistake, (ii) to correct or supplement any provisions herein or therein which may be inconsistent with any other provisions of this Agreement, any amendment to this Agreement or the related Prospectus Supplement, (iii) to modify, eliminate or add to any of its provisions to such extent as shall be necessary to maintain the qualification of the Upper-Tier REMIC and the Lower-Tier REMIC as REMICs at all times that any Certificates are outstanding or to avoid or minimize the risk of the imposition of any tax on the REMIC pursuant to the Code that would be a claim against the Trust Estate, provided that (a) the Trustee has received an Opinion of
Counsel to the effect that such action is necessary or desirable to maintain such qualification or to avoid or minimize the risk of the imposition of any such tax and (b) such action shall not, as evidenced by such Opinion of Counsel, adversely affect in any material respect the interests of any Certificateholder, (iv) to change the timing and/or nature of deposits into the Certificate Account provided that (a) such change shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Certificateholder and (b) such change shall not adversely affect the then-current rating of the Senior Certificates, the Class B-1 Certificates, the Class B-2 Certificates, the Class B-3 Certificates, the Class B-4 Certificates or the Class B-5 Certificates as evidenced by a letter from each Rating Agency rating such Certificates to such effect, (v) to reduce the percentage of the Pool Principal Balance at which the Depositor will have the option to
purchase all the remaining Mortgage Loans in accordance with Section 10.01, provided that such reduction is considered necessary by the Depositor, as evidenced by an Officer’s Certificate delivered to the Trustee, to preserve the treatment of the transfer of the Mortgage Loans to the Depositor by the Seller or to the Trust by the Depositor as sale for accounting purposes, and (vi) to make any other provisions with respect to matters or questions arising under this Agreement which shall not be materially inconsistent with the provisions of this Agreement, provided that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Certificateholder, provided that the amendment shall not be deemed to adversely affect in any material respect the interests of the Certificateholders and no Opinion of Counsel to that effect shall be
required if the Person requesting the amendment obtains a letter from each Rating Agency stating that the amendment would not result in the downgrading or withdrawal of the respective ratings then assigned to the Certificates.

This Agreement may also be amended from time to time by the Depositor, the Servicer and the Trustee, with the consent of the Holders of Certificates of each Class of Certificates which is affected by such amendment, evidencing, as to each such Class of Certificates, Percentage Interests aggregating not less than 66-2/3%, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders of such Certificates; provided, however, that no such amendment shall (A) reduce in any manner the amount of, or delay the timing of, collections of payments on Mortgage Loans or distributions which are required to be made on any Certificate without the consent of the Holder of such Certificate or 

 

 

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(B) reduce the aforesaid percentage required to consent to any such amendment, without the consent of the Holders of all Certificates then Outstanding.

Prior to the solicitation of consent of Certificateholders in connection with any such amendment, the party seeking such amendment shall furnish the Trustee with an Opinion of Counsel stating whether such amendment would adversely affect the qualification of the Upper-Tier REMIC or the Lower-Tier REMIC as REMICs and notice of the conclusion expressed in such Opinion of Counsel shall be included with any such solicitation.  An amendment made with the consent of all Certificateholders and executed in accordance with this Section 11.01 shall be permitted or authorized by this Agreement notwithstanding that such Opinion of Counsel may conclude that such amendment would adversely affect the qualification of the Upper-Tier REMIC or the Lower-Tier REMIC as REMICs.

Promptly after the execution of any such amendment or consent the Trustee shall furnish written notification of the substance of or a copy of such amendment to each Certificateholder and to each Rating Agency.

It shall not be necessary for the consent of Certificateholders under this Section 11.01 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable requirements as the Trustee may prescribe.

Section 11.02.  Recordation of Agreement.  This Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Servicer and at its expense on direction by the Trustee, who will act at the direction of Holders of Certificates evidencing not less than 50% of all Voting Rights, but only upon direction of the Trustee accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of Certificateholders.

For the purpose of facilitating the recordation of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall constitute but one and the same instrument.

Section 11.03.  Limitation on Rights of Certificateholders.  The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the Trust, nor entitle such Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or commence any proceeding in any court for a partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

No Certificateholder shall have any right to vote (except as provided herein) or in any manner otherwise control the operation and management of the Trust, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Certificates, be construed so as to constitute the Certificateholders from time to time as partners 

 

 

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or members of an association; nor shall any Certificateholder be under any liability to any third person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

No Certificateholder shall have any right by virtue or by availing itself of any provisions of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee a written notice of default and of the continuance thereof, as provided herein, and unless also the Holders of Certificates evidencing Percentage Interests aggregating not less than 25% of each Class of Certificates affected thereby shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or proceeding; it being understood and intended, and being expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue or by availing itself or themselves of any provisions of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of the Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all Certificateholders.  For the protection and enforcement of the provisions of this Section 11.03, each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Section 11.04.  Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT APPLICATION OF THE CONFLICTS OF LAWS PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

Section 11.05.  Notices.  All demands, notices, instructions, directions, requests and communications required to be delivered hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by certified mail, return receipt requested, (provided, however, that notices to the Trustee may be delivered by facsimile and shall be deemed effective upon receipt ) to (a) in the case of the Depositor, Wachovia Mortgage Loan Trust, LLC, [address], Attention:     , (b) in the case of the Servicer, [address], Attention:      , (c) in the case of the Trustee, [address], Attention:      , (d) in the case of      , [address],
Attn     , and (e) in the case of      , [address], Attn:       , or, as to each party, at such other address as shall be designated by such party in a written notice to each other party.  Any notice required or permitted to be mailed to a Certificateholder shall be given by first class mail, postage prepaid, at the address of such Holder as shown in the Certificate Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

Section 11.06.  Severability of Provisions.  If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held 

 

 

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invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the Certificates or the rights of the Holders thereof.

Section 11.07.  Certificates Nonassessable and Fully Paid.  It is the intention of the Trustee that Certificateholders shall not be personally liable for obligations of the Trust Estate, that the beneficial ownership interests represented by the Certificates shall be nonassessable for any losses or expenses of the Trust Estate or for any reason whatsoever, and that Certificates upon execution, countersignature and delivery thereof by the Trustee pursuant to Section 6.01 are and shall be deemed fully paid.

Section 11.08.  Access to List of Certificateholders.  The Certificate Registrar will furnish or cause to be furnished to the Trustee, within 15 days after the receipt of a request by the Trustee in writing, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Certificateholders as of the most recent Record Date for payment of distributions to Certificateholders.

If three or more Certificateholders apply in writing to the Trustee, and such application states that the applicants desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Certificates and is accompanied by a copy of the communication which such applicants propose to transmit, then the Trustee shall, within five Business Days after the receipt of such application, afford such applicants access during normal business hours to the most recent list of Certificateholders held by the Trustee.  If such a list is as of a date more than 90 days prior to the date of receipt of such applicants’ request, the Trustee shall promptly request from the Certificate Registrar a current list as provided above, and shall afford such applicants access to such list promptly upon receipt.

Every Certificateholder, by receiving and holding such list, agrees with the Certificate Registrar and the Trustee that neither the Certificate Registrar nor the Trustee shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Certificateholders hereunder, regardless of the source from which such information was derived.

Section 11.09.  Recharacterization.  The parties to this Agreement intend the conveyance by the Depositor to the Trustee of all of its right, title and interest in and to the Mortgage Loans pursuant to this Agreement to constitute a purchase and sale and not a loan.  Notwithstanding the foregoing, to the extent that such conveyance is held not to constitute a sale under applicable law, it is intended that this Agreement shall constitute a security agreement under applicable law and that the Depositor shall be deemed to have granted to the Trustee a first priority security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans.

 

-95-

 

 

 

 

IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have caused this Agreement to be duly executed by their respective officers thereunto duly authorized to be hereunto affixed, all as of the day and year first above written.

	
             
 	
            WACHOVIA MORTGAGE LOAN TRUST, LLC,
 
	
             
 	
            as Depositor
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            By:                                          
                  
 
	
             
 	
            Name:
 
	
             
 	
            Title:
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            [     ],
 
	
             
 	
            as Servicer
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            By:                                          
                  
 
	
             
 	
            Name:
 
	
             
 	
            Title:
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            [     ],
 
	
             
 	
            as Trustee
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            By:                                          
                  
 
	
             
 	
            Name:
 
	
             
 	
            Title:
 

 

 

 

 

 

 

 

	
            STATE OF                         )
 
	
            ) ss:
 
	
            COUNTY OF                     )
 
	
             
 

On the    th day of      , 200 , before me, a notary public in and for the State of      , personally appeared      , known to me who, being by me duly sworn, did depose and say that s/he is a       of      , a      , one of the parties that executed the foregoing instrument; and that s/he signed his/her name thereto by order of the Board of Directors of such corporation.

	
             
 	
             
 
	
             
 	
            _____________________________________
 
	
             
 	
            Notary Public
 
	
             
 	
             
 
	
            [Notarial Seal]
 	
             
 
	
             
 	
             
 
	
            My commission expires ___________.
 	
             
 
	
             
 	
             
 

 

 

 

 

 

 

 

	
            STATE OF                         )
 
	
            ) ss:
 
	
            COUNTY OF                     )
 
	
             
 

On the   th day of      , 200_, before me, a notary public in and for the State of      , personally appeared      , known to me who, being by me duly sworn, did depose and say that s/he is a ________________ of      , a      , one of the parties that executed the foregoing instrument; and that s/he signed his/her name thereto by order of the Board of Directors of such corporation.

	
             
 	
             
 
	
             
 	
            _____________________________________
 
	
             
 	
            Notary Public
 
	
             
 	
             
 
	
            [Notarial Seal]
 	
             
 
	
             
 	
             
 
	
            My commission expires ___________.
 	
             
 
	
             
 	
             
 

 

 

 

 

 

 

 

	
            STATE OF           ________)
 
	
            ) ss:
 
	
            STATE OF           ________)
 
	
             
 

On the   th day of      , 200_, before me, a notary public in and for the State of      , personally appeared      , known to me who, being by me duly sworn, did depose and say that s/he is the       of Wachovia Mortgage Loan Trust, LLC, a Delaware statutory trust, one of the parties that executed the foregoing instrument; and that she signed her name thereto by order of the Board of Directors of such limited liability company.

	
             
 	
             
 
	
             
 	
            _____________________________________
 
	
             
 	
            Notary Public
 
	
             
 	
             
 
	
            [Notarial Seal]
 	
             
 
	
             
 	
             
 
	
            My commission expires ___________.EXHIBIT 4.2
 

 

 

INDENTURE

BETWEEN

[                          ] LOAN TRUST 200 - ,

AS ISSUER,

AND

[                                        ],

AS INDENTURE TRUSTEE

Dated as of                , 200 

Relating to

[                                      ] TRUST 200 - 

MORTGAGE BACKED NOTES, SERIES 200 - 

 

TABLE OF CONTENTS

 

 

 

	
             
 	
             
 	
            Page 2
 
	
             
 	
             
 	
             
 
	
            ARTICLE I
 	
            DEFINITIONS
 	
            3
 
	
            Section 1.01.
 	
            General Definitions
 	
            3
 
	
            ARTICLE II
 	
            THE NOTES
 	
            26
 
	
            Section 2.01.
 	
            Forms Generally
 	
            26
 
	
            Section 2.02.
 	
            Forms of Certificate of Authentication
 	
            26
 
	
            Section 2.03.
 	
            General Provisions With Respect to 
                     Principal and InterestPayment
 	
            27
 
	
            Section 2.04.
 	
            Denominations
 	
            27
 
	
            Section 2.05.
 	
            Execution, Authentcation, Delivery and Dating
 	
            27
 
	
            Section 2.06.
 	
            Registration, Registration of Transfer and Exchange
 	
            28
 
	
            Section 2.07.
 	
            Mutilated, Destroyed, Lost or Stolen Notes
 	
            29
 
	
            Section 2.08.
 	
            Payments of Principal and Interest
 	
            30
 
	
            Section 2.09.
 	
            Persons Deemed Owner
 	
            31
 
	
            Section 2.10.
 	
            Cancellation
 	
            32
 
	
            Section 2.11.
 	
            Authentication and Delivery of Notes
 	
            32
 
	
            Section 2.12.
 	
            Book-Entry Note
 	
            34
 
	
            Section 2.13.
 	
            Termination of Book Entry System
 	
            34
 
	
            ARTICLE III
 	
            COVENANTS
 	
            35
 
	
            Section 3.01.
 	
            Payment of Notes
 	
            35
 
	
            Section 3.02.
 	
            Maintenance of Office or Agency
 	
            35
 
	
            Section 3.03.
 	
            Money for Note Payments to Be Held In Trust
 	
            35
 
	
            Section 3.04.
 	
            Existence of Issuer
 	
            37
 
	
            Section 3.05.
 	
            Protection of Trust Estate
 	
            38
 
	
            Section 3.06.
 	
            Annual Opinions as to Collateral
 	
            38
 
	
            Section 3.07.
 	
            Performance of Obligations; Servicing Agreement
 	
            39
 
	
            Section 3.08.
 	
            Investment Company Act
 	
            39
 
	
            Section 3.09.
 	
            Negative Covenants
 	
            39
 
	
            Section 3.10.
 	
            Annual Statement as to Compliance
 	
            40
 
	
            Section 3.11.
 	
            Restricted Payments
 	
            41
 
	
            Section 3.12.
 	
            Treatment of Notes as Debt for Tax Purposes
 	
            41
 
	
            Section 3.13.
 	
            Notice of Events of Default
 	
            41
 
	
            Section 3.14.
 	
            Further Instruments and Acts
 	
            41
 
	
            ARTICLE IV
 	
            SATISFACTION AND DISCHARGE
 	
            41
 
	
            Section 4.01.
 	
            Satisfaction and Discharge of Indenture
 	
            41
 
	
            Section 4.02.
 	
            Application of Trust Money
 	
            43
 
	
            ARTICLE V
 	
            DEFAULTS AND REMEDIES
 	
            43
 
	
            Section 5.01.
 	
            Event of Default
 	
            43
 
	
            Section 5.02.
 	
            Acceleration of Maturity; Rescission and Annulment
 	
            44
 

	
            Section 5.03.
 	
            Collection of Indebtedness and Suits for 
                    Enforcement byIndenture Trustee
 	
            27
 
	
            Section 5.04.
 	
            Remedies
 	
            45
 
	
            Section 5.05.
 	
            Indenture rustee May File Proofs of Claim
 	
            46
 

  

 

i

 

 

 

 

	
            Section 5.06.
 	
            Indenture Trustee May Enforce Claims Without                       Possession of Notes
 	
            27
 
	
            Section 5.07.
 	
            Application of Money Collecte
 	
            47
 
	
            Section 5.08.
 	
            Limitation on Suits
 	
            48
 
	
            Section 5.09.
 	
            Unconditional Rights of Noteholders to Receive 
                     Principal and Interest
 	
            49
 
	
            Section 5.10.
 	
            Restoration of Rights and Remedies
 	
            49
 
	
            Section 5.11.
 	
            Rights and Remedies Cumulative
 	
            49
 
	
            Section 5.12.
 	
            Delay or Omission Not Waiver
 	
            49
 
	
            Section 5.13.
 	
            Control by Noteholders
 	
            50
 
	
            Section 5.14.
 	
            Waiver of Past Defaults
 	
            50
 
	
            Section 5.15.
 	
            Undertaking for Costs
 	
            50
 
	
            Section 5.16.
 	
            Waiver of Stay or Extension Laws
 	
            51
 
	
            Section 5.17.
 	
            Sale of Trust Estate
 	
            51
 
	
            Section 5.18.
 	
            Action on Notes
 	
            52
 
	
            Section 5.19.
 	
            No Recourse to Other Trust Estates or Other Assets 
                    of the Issuer
 	
            53
 
	
            Section 5.20.
 	
            Application of the Trust Indenture Act
 	
            53
 
	
            ARTICLE VI
 	
            THE INDENTURE TRUSTEE
 	
            53
 
	
            Section 6.01.
 	
            Duties of Indenture Trustee
 	
            53
 
	
            Section 6.02.
 	
            Notice of Default
 	
            54
 
	
            Section 6.03.
 	
            Rights of Indenture Trustee
 	
            55
 
	
            Section 6.04.
 	
            Not Responsible for Recitals or Issuance of Notes
 	
            55
 
	
            Section 6.05.
 	
            May Hold Notes
 	
            55
 
	
            Section 6.06.
 	
            Money Held in Trust
 	
            55
 
	
            Section 6.07.
 	
            Eligibility, Disqualification
 	
            56
 
	
            Section 6.08.
 	
            Indenture Trustee’s Capital and Surplus
 	
            56
 
	
            Section 6.09.
 	
            Resignation and Removal; Appointment of Successor
 	
            56
 
	
            Section 6.10.
 	
            Acceptance of Appointment by Successor
 	
            57
 
	
            Section 6.11.
 	
            Merger, Conversion, Consolidation or Succession                     to Business of Indenture Trustee
 	
            58
 
	
            Section 6.12.
 	
            Preferential Collectionof Claims Against Issuer
 	
            58
 
	
            Section 6.13.
 	
            Co-Indenture Trustees and Separate Indenture Trustees
 	
            58
 
	
            Section 6.14.
 	
            Authenticating Agents
 	
            60
 
	
            Section 6.15.
 	
            Review of Mortgage Files
 	
            61
 
	
            Section 6.16.
 	
            Indenture Trustee Fees and Expenses
 	
            62
 
	
            Section 6.17.
 	
            Tax Reporting
 	
            63
 
	
            ARTICLE VII
 	
            NOTEHOLDERS’ LISTS AND REPORTS
 	
            63
 
	
            Section 7.01.
 	
            Issuer to Furnish Indenture Trustee Names                     and Addresses of Noteholders
 	
            63
 

	
            Section 7.02.
 	
            Preservation of Information; Communications                     to Noteholders
 	
            63
 
	
            Section 7.03.
 	
            Reports by Indenture Trustee
 	
            64
 
	
            Section 7.04.
 	
            Reports by Issuer
 	
            64
 

  

 

ii

 

	
            ARTICLE VIII
 	
            ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
 	
            64
 
	
            Section 8.01.
 	
            Collection of Moneys
 	
            64
 
	
            Section 8.02.
 	
            Note Account; Distributions
 	
            65
 
	
            Section 8.03.
 	
            Claims Upon the Insurance Policy; Insurance Policy                     Payments Account
 	
            67
 
	
            Section 8.04.
 	
            General Provisions Regarding the Not Accounts and                     Mortgage Loans
 	
            69
 
	
            Section 8.05.
 	
            Releases of Defective Mortgage Loans
 	
             
 
	
            Section 8.06.
 	
            Reports by Indenture Trustee to Noteholders; Access                     to Certain Information
 	
            70
 
	
            Section 8.07.
 	
            Trust Estate Mortgage Files
 	
            71
 
	
            Section 8.08.
 	
            Amendment to Servicing Agreement
 	
            71
 
	
            Section 8.09.
 	
            Delivery of the Mortgage Files Pursuant to                     Servicing Agreement
 	
            71
 
	
            Section 8.10.
 	
            Servicer as Agent
 	
            72
 
	
            Section 8.11.
 	
            Termnation of Servicer
 	
            72
 
	
            Section 8.12.
 	
            Opinion of Counsel
 	
            72
 
	
            Section 8.13.
 	
            Appointment of Custodians
 	
            72
 
	
            Section 8.14.
 	
            Rights of the Note Insurer to Exercise Rights                     of Noteholders
 	
            73
 
	
            Section 8.15.
 	
            Trust Estate and Accounts Held fo Benefit of the                     Note Insurer
 	
            73
 
	
            Section 8.16.
 	
            [Reserved.]
 	
            74
 
	
            ARTICLE IX
 	
            SUPPLEMENTAL INDENTRES
 	
            74
 
	
            Section 9.01.
 	
            Supplemental Indentures Without Consent                     of Noteholders
 	
            74
 
	
            Section 9.02.
 	
            Supplemental Indentures With Conset of Noteholders
 	
            75
 
	
            Section 9.03.
 	
            Execution of Supplemental Indentures
 	
            76
 
	
            Section 9.04.
 	
            Effect of Supplemental Indentures
 	
            76
 
	
            Section 9.05.
 	
            Conformity With Trust Indenture Act
 	
            76
 
	
            Section 9.06.
 	
            Reference in Notes to Supplemental Indentures
 	
            76
 
	
            Section 9.07.
 	
            Amendments to Governing Documents
 	
            77
 
	
            ARTICLE X
 	
            REDEMPTION OF NOTES
 	
            77
 
	
            Section 10.01.
 	
            Redemption
 	
            77
 
	
            Section 10.02.
 	
            Form of Redemption Notice
 	
            78
 
	
            Section 10.03.
 	
            Notes Payable on Optional Redemption
 	
            79
 
	
            ARTICLE XI
 	
            MISCELLANEOUS
 	
            79
 
	
            Section 11.01.
 	
            Compliance Certificates and Opinions
 	
            79
 

	
            Section 11.02.
 	
            Form of Documents Delivered to Indenture Trustee
 	
            79
 
	
            Section 11.03.
 	
            Acts of Noteholders
 	
            80
 
	
            Section 11.04.
 	
            Notices, etc., to Indenture Trustee, the Note Insurer                      and Issuer
 	
            81
 
	
            Section 11.05.
 	
            Notices and Reports to Noteholders; Waiver of                     Notices
 	
            82
 
	
            Section 11.06.
 	
            Rules by Indenture Trustee
 	
            83
 
	
            Section 11.07.
 	
            Conflict With Trust Indenture Act
 	
            83
 
	
            Section 11.08.
 	
            Effect of Headings and Table of Contents
 	
            83
 

 

 

 

	
            iii
 

 

 

 

 

	
            Section 11.09.
 	
            Successors and Assigns
 	
            83
 
	
            Section 11.10.
 	
            Separability
 	
            83
 
	
            Section 11.11.
 	
            Benefits of Indenture
 	
            83
 
	
            Section 11.12.
 	
            Legal Holidays
 	
            83
 
	
            Section 11.13.
 	
            Governing Law
 	
            83
 
	
            Section 11.14.
 	
            Counterparts
 	
            84
 
	
            Section 11.15.
 	
            Recording of Indenture
 	
            84
 
	
            Section 11.16.
 	
            Issuer Obligation
 	
            84
 
	
            Section 11.17.
 	
            No Petition
 	
            84
 
	
            Section 11.18.
 	
            Inspection
 	
            85
 
	
            Section 11.19.
 	
            Usury
 	
            85
 
	
            Section 11.20.
 	
            Third Party Beneficiary
 	
            85
 
	
            SCHEDULES AND EXHIBITS
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
            Schedule l
 	
            Mortgage Loan Schedule
 	
             
 
	
            Exhibit A
 	
            Form of Note
 	
             
 
	
            Exhibit B
 	
            Insurance Policy
 	
             
 
	
            Exhibit C
 	
            Form of Notice of Claim
 	
             
 
	
            Exhibit D
 	
            PMI Mortgage Loans
 	
             
 

 

 

	
            iv
 

 

 

 

CROSS-REFERENCE TABLE

Cross-reference sheet showing the location in the Indenture of the provisions inserted pursuant to Sections 310 through 318(a) inclusive of the Trust Indenture Act of 1939.*

	
            Trust Indenture Act of 1939
 	
            Indenture Section
 
	
             
 	
             
 
	
            Section 310
 	
             
 
	
            (a) (1)                                                                                                                                                                                                                                                                  
 	
            6.07
 
	
            (a) (2)                                                                                                                                                                                                                                                                  
 	
            6.07, 6.08
 
	
            (a) (3)                                                                                                                                                                                                                                                                  
 	
            6.13
 
	
            (a) (4)                                                                                                                                                                                                                                                                  
 	
            Not Applicable
 
	
            (a) (5)                                                                                                                                                                                                                                                                  
 	
            6.07
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            6.07, 6.09
 
	
            (c)                                                                                                                                                                                                                                                                                        
 	
            Not Applicable
 
	
            Section 311
 	
             
 
	
            (a)                                                                                                                                                                                                                                                                                        
 	
            6.12
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            6.12
 
	
            (c)                                                                                                                                                                                                                                                                                        
 	
            Not Applicable
 
	
            Section 312
 	
             
 
	
            (a)                                                                                                                                                                                                                                                                                        
 	
            7.01(a), 7.02(a)
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            7.02(b)
 
	
            (c)                                                                                                                                                                                                                                                                                        
 	
            7.02(c)
 
	
            Section 313
 	
             
 
	
            (a)                                                                                                                                                                                                                                                                                        
 	
            7.03(a)
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            7.03(a)
 
	
            (c)                                                                                                                                                                                                                                                                                        
 	
            11.05
 
	
            (d)                                                                                                                                                                                                                                                                                       
 	
            7.03(b)
 
	
            Section 314
 	
             
 
	
            (a)(1)                                                                                                                                                                                                                                                                      
 	
            7.04
 
	
            (a)(2)                                                                                                                                                                                                                                                                      
 	
            7.04
 
	
            (a)(3)                                                                                                                                                                                                                                                                      
 	
            7.04
 
	
            (a)(4)                                                                                                                                                                                                                                                                      
 	
            7.04
 
	
            (b)(1)                                                                                                                                                                                                                                                                     
 	
            2.11(c), 11.01
 
	
            (b)(2)                                                                                                                                                                                                                                                                     
 	
            3.06
 
	
            (c)(1)                                                                                                                                                                                                                                                                      
 	
            2.11(d), 4.01, 8.02(d), 11.01
 
	
            (c)(2)                                                                                                                                                                                                                                                                      
 	
            2.11(c), 4.01, 8.02(d), 11.01
 
	
            (c)(3)                                                                                                                                                                                                                                                                      
 	
            8.02(d)
 
	
            (d)(1)                                                                                                                                                                                                                                                                     
 	
            11.01(a)
 
	
            (d)(2)                                                                                                                                                                                                                                                                     
 	
            11.01(a)
 
	
            (d)(3)                                                                                                                                                                                                                                                                     
 	
            11.01(a)
 
	
            (e)                                                                                                                                                                                                                                                                                        
 	
            11.0 1(b)
 
	
            Section 315
 	
             
 

 

 

_________________________

* This Cross-Reference Table is not part of the Indenture.

 

 

	
            v
 

 

 

 

 

	
            (a)                                                                                                                                                                                                                                                                                        
 	
            6.01(b), 6.01(c)(1)
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            6.02, 11.05
 
	
            (c)                                                                                                                                                                                                                                                                                        
 	
            6.01(a)
 
	
            (d)(1)                                                                                                                                                                                                                                                                     
 	
            6.01(b), 6.01(c)
 
	
            (d)(2)                                                                                                                                                                                                                                                                     
 	
            6.01(c)(2)
 
	
            (d)(3)                                                                                                                                                                                                                                                                     
 	
            6.01(c)(3)
 
	
            (e)                                                                                                                                                                                                                                                                                        
 	
            5.15
 
	
            Section 316
 	
             
 
	
            (a)                                                                                                                                                                                                                                                                                        
 	
            5.20
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            5.09
 
	
            (c)                                                                                                                                                                                                                                                                                        
 	
            5.20
 
	
            Section 317
 	
             
 
	
            (a)(1)                                                                                                                                                                                                                                                                      
 	
            5.03
 
	
            (a)(2)                                                                                                                                                                                                                                                                      
 	
            5.05
 
	
            (b)                                                                                                                                                                                                                                                                                       
 	
            3.01
 
	
            Section 318
 	
             
 
	
            (a)                                                                                                                                                                                                                                                                                        
 	
            11.07
 

 

 

	
            vi
 

 

 

 

THIS INDENTURE, dated as of           (as amended or supplemented from time to time as permitted hereby, this “Indenture”), is between           TRUST 200 - , a Delaware statutory trust (together with its permitted successors and assigns, the “Issuer”) and          , as indenture trustee (together with its permitted successors in the trusts hereunder, the “Indenture Trustee”).

Preliminary Statement

The Issuer has duly authorized the execution and delivery of this Indenture to provide for its Mortgage Backed Notes, Series 200 -  (the “Notes”), issuable as provided in this Indenture.  All covenants and agreements made by the Issuer herein are for the benefit and security of the Holders of the Notes and the Note Insurer.  The Issuer is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

All things necessary to make this Indenture a valid agreement of the Issuer in accordance with its terms have been done.

Granting Clause

The Issuer hereby Grants to the Indenture Trustee, for the exclusive benefit of the Holders of the Notes and the Note Insurer, all of the Issuer’s right, title and interest in and to (a) the Mortgage Loans listed in Schedule I to this Indenture (including property that secures a Mortgage Loan that becomes an REO Property), including the related Mortgage Files delivered or to be delivered to the Custodian, on behalf of the Indenture Trustee, pursuant to the Mortgage Loan Sale Agreement, all payments of principal received, collected or otherwise recovered after the Cut-off Date for each Mortgage Loan, all payments of interest accruing on each Mortgage Loan after the Cut-off Date therefor whenever received and all other proceeds received in respect of such Mortgage Loans, and any Qualified Replacement Mortgage Loan, (b) the Servicing Agreement, (c) the Mortgage Loan Sale
Agreement, (d) the Mortgage Loan Contribution Agreement, (e) the Management Agreement, (f) the Other Insurance Policies, (g) all cash, instruments or other property held or required to be deposited in the Collection Account and the Note Account, including all investments made with funds in such accounts (but not including any income on funds deposited in, or investments made with funds deposited in, the Collection Account and the Note Account, which income shall belong to and be for the account of the Servicer), and (h) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid assets, including, without limitation, all insurance proceeds and condemnation awards.  Such Grants are made, however, in trust, to secure the Notes equally and ratably without prejudice, priority or distinction between any Note and any other Note by reason of difference in time of issuance or otherwise, and for the benefit of the Note Insurer to secure
(x) the payment of all amounts due on the Notes in accordance with their terms, (y) the payment of all other sums payable under this Indenture and (z) compliance with the provisions of this Indenture, all as provided in this Indenture.  All terms used in the foregoing granting clauses that are defined in Section 1.01 are used with the meanings given in said Section.

The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions of this Indenture and agrees to perform the duties herein required to the end that the interests of the Holders of the Notes may be adequately and effectively 

 

 

 

protected.  The Indenture Trustee agrees that it will hold the Insurance Policy and the PMI Policy in trust and that it will hold any proceeds of any claim upon the Insurance Policy and PMI Policy, solely for the use and benefit of the Noteholders in accordance with the terms hereof and the Insurance Policy and the PMI Policy, respectively.

ARTICLE I

 

DEFINITIONS

	
            Section 1.01.
 	
            General Definitions.  
 

Except as otherwise specified or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the feminine genders of such terms.  Whenever reference is made herein to an Event of Default or a Default known to the Indenture Trustee or of which the Indenture Trustee has notice or knowledge, such reference shall be construed to refer only to an Event of Default or Default of which the Indenture Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d).  All other terms used herein that are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein.

“Accountant”:  A Person engaged in the practice of accounting who (except when this Indenture provides that an Accountant must be Independent) may be employed by or affiliated with the Issuer or an Affiliate of the Issuer.

“Act”:  With respect to any Noteholder, as defined in Section 11.03.

“Administrative Fee Amount”:  For the Notes and any Payment Date, the sum of the Monthly Servicing Fee and the Indenture Trustee’s Fee, each relating to such Payment Date.

“Affiliate”:  With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract, relation to individuals or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent”:  Any Note Registrar, Paying Agent, Authenticating Agent or Custodian.

“Aggregate Principal Balance”:  With respect to the Mortgage Loan Pool and any Payment Date, the aggregate of the Principal Balances of the Mortgage Loans as of the related Determination Date (or other specified date).

“Assignments”: The original instrument of assignment of a Mortgage, including any interim assignments, from the originator or any other holder of any Mortgage Loan to the Indenture Trustee (that in each case may, to the extent permitted by the laws of the state in which the related Mortgaged Property is located, be a blanket instrument of assignment covering other 

 

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Mortgages and Mortgage Notes as well and that may also be an instrument of assignment running directly from the mortgagee of record under the related Mortgage to the Indenture Trustee).

“Authenticating Agent”:  The Person, if any, appointed as Authenticating Agent by the Issuer pursuant to Section 6.14, until any successor Authenticating Agent for the Notes is named, and thereafter “Authenticating Agent” shall mean such successor.  The Authenticating Agent shall be the Indenture Trustee.  Any Authenticating Agent other than the Indenture Trustee shall sign an instrument under which it agrees to be bound by all of the terms of this Indenture applicable to the Authenticating Agent.

“Authorized Officer”:  With respect to (i) the Indenture Trustee, any Responsible Officer, (ii) the Owner Trustee, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer, any financial services officer or any other officer of the Owner Trustee customarily performing functions similar to those performed by the above officers and (iii) any other Person, the Chairman, Chief Operating Officer, President or any Vice President of such Person.

“Available Funds”:  With respect to any Payment Date, the sum of the amounts described in clauses (a) through (g) below, less (i) the Administrative Fee Amount in respect of such Payment Date, (ii) Monthly Advances and Servicing Advances previously made that are reimbursable to the Servicer (other than those included in liquidation expenses for any Liquidated Mortgage Loan and reimbursed from the related Liquidation Proceeds and from Insurance Proceeds) with respect to the related Collection Period to the extent permitted by the Servicing Agreement and (iii) the aggregate amounts (A) deposited into the Collection Account or the Note Account that may not be withdrawn therefrom pursuant to a final and nonappealable order of a United States bankruptcy court of competent
jurisdiction imposing a stay pursuant to Section 362 of the Bankruptcy Code and that would otherwise have been included in Available Funds on such Payment Date and (B) received by the Indenture Trustee that are recoverable and sought to be recovered from the Issuer as a voidable preference by a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with a final nonappealable order of a court of competent jurisdiction:

(a)               all scheduled payments of interest received with respect to the Mortgage Loans and due during the related Due Period and all other interest payments on or in respect of such Mortgage Loans received by or on behalf of the Servicer during the related Collection Period (including Payments Ahead that are allocable to interest for the related Due Period), net of amounts representing interest accrued on such Mortgage Loans in respect of any period prior to the Cut-off Dates, plus any Compensating Interest payments made by the Servicer in respect of the related Mortgage Loans and any net income from related REO Properties for such Collection Period;

(b)               all scheduled payments of principal received with respect to the Mortgage Loans and due during the related Due Period and all other principal payments (including Principal Prepayments and Prepayment Premiums) received or deemed to be received during the related Collection Period (including Payments Ahead that are allocable as principal for the related Due Period) in respect of such Mortgage Loans;

 

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(c)               the aggregate of any Trust Insurance Proceeds collected by the Servicer during the related Collection Period;

(d)               the aggregate of any Net Liquidation Proceeds collected by the Servicer during the related Collection Period;

(e)               the aggregate of the Purchase Prices received in respect of any Mortgage Loans that are required or permitted to be repurchased, released, removed or substituted by the Seller during or in respect of the related Collection Period, to the extent such amounts are received by the Indenture Trustee on or before the related Deposit Date;

(f)                the amount of any Monthly Advances made by the Servicer for such Payment Date; and

(g)               the aggregate of amounts deposited in the Note Account during such Collection Period in connection with redemption of the Notes pursuant to Article X.

“Bankruptcy Code”:  The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.

“Basic Documents”:  This Indenture, the Trust Agreement, the Servicing Agreement, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, the Management Agreement, the Insurance Agreement and the Indemnification Agreement.

“Beneficial Owner”:  With respect to a Book-Entry Note, the Person who is the beneficial owner of such Note as reflected on the books of the Clearing Agency for the Notes or on the books of a Person maintaining an account with such Clearing Agency (directly or as an indirect participant, in accordance with the rules of such Clearing Agency).

“Best Efforts”:  Efforts determined to be in good faith and reasonably diligent by the Person performing such efforts, specifically the Issuer or the Servicer, as the case may be, in its reasonable discretion.  Such efforts do not require the Issuer or the Servicer, as the case may be, to enter into any litigation, arbitration or other legal or quasi-legal proceeding, nor do they require the Issuer or the Servicer, as the case may be, to advance or expend fees or sums of money in addition to those specifically set forth in this Indenture and the Servicing Agreement.

“Book-Entry Notes”:  Any Notes registered in the name of the Clearing Agency or its nominee, ownership of which is reflected on the books of the Clearing Agency or on the books of a person maintaining an account with such Clearing Agency (directly or as an indirect participant in accordance with the rules of such Clearing Agency).

“Book-Entry Termination”:  The time at which the book-entry registration of the Book-Entry Notes shall terminate, as specified in Section 2.13.

“Business Day”:  Any day other than (i) a Saturday or Sunday or (ii) a day that is either a legal holiday or a day on which the Note Insurer is closed or on which banking institutions in the State of New York, the State of North Carolina, the state in which the Corporate Trust Office is 

 

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located or the State of Delaware are authorized or obligated by law, regulation or executive order to be closed.

“Certificate”:  As defined in the Trust Agreement.

“Certificate Distribution Account”:  As defined in the Trust Agreement.

“Certificateholders”:  As defined in the Trust Agreement.

“Clearing Agency”:  An organization registered as a “clearing agency” pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended, and the regulations of the Commission thereunder and shall initially be The Depository Trust Company of New York, the nominee for which is Cede & Co.

“Clearing Agency Participants”:  The entities for whom the Clearing Agency will maintain book-entry records of ownership and transfer of Book-Entry Notes, which may include securities brokers and dealers, banks and trust companies and clearing corporations and certain other organizations.

	
            “Closing Date”:    
 	
            , the date of initial issuance of the Notes.
 

“Code”:  The Internal Revenue Code of 1986, as amended, and as may be further amended from time to time, as successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form and proposed regulations thereunder to the extent that, by reason of their proposed effective date, such proposed regulations would apply.

“Collateral”:  The items Granted to the Indenture Trustee under the Granting Clause of this Indenture.

“Collection Account”:  The segregated trust account established by the Servicer and maintained pursuant to Section 2.02(b) of the Servicing Agreement.

“Collection Period”:  As to any Payment Date, the period beginning on the first day of the calendar month immediately preceding the month in which such Payment Date occurs (except that, in the case of the first Payment Date, the related Collection Period will commence on the Cut-off Date for each Mortgage Loan) and ending on the last day of such calendar month.

“Combined Loan-to-Value Ratio”:  As defined in the Mortgage Loan Sale Agreement.

“Commission”:  The Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or if at any time such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time under the Trust Indenture Act or similar legislation replacing the Trust Indenture Act.

“Compensating Interest”:  As defined in the Servicing Agreement.

 

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“Corporate Trust Office”:  The principal office of the Indenture Trustee at which at any particular time its corporate trust business with respect to this Indenture shall be principally administered, which office at the date of the execution of this Indenture is located at          , Attention:            Trust 200 - , Series 200 - , with a copy to the Indenture Trustee at          , Attention:            Loan Trust 200_.

“Cumulative Loss Percentage”:  As defined in the Servicing Agreement.

“Current Note Balance”:  With respect to any Note as of any date of determination, the original principal amount of such Note, reduced by all prior payments (including Insured Payments), if any, made with respect to principal of such Note.

“Custodial Agreement”:  The Custody Agreement, dated as of          , among the Servicer, the Custodian and the Indenture Trustee.

“Custodian”:  A Person who is at any time appointed by the Indenture Trustee pursuant to Section 8.13 as a document custodian for the Mortgage Files, which Person shall not be the Issuer or an Affiliate of the Issuer.  The Custodian shall initially be          .

	
            “Cut-off Date”:    
 	
            .
 

“Default”:  Any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

“Defective Mortgage Loan”:  Any Mortgage Loan that is required to be repurchased or substituted by the Seller pursuant to the Mortgage Loan Sale Agreement.

“Deficiency Amount”:  With respect to the Notes and any Payment Date, (A) the excess, if any, of (i) the Note Interest (net of any Relief Act Interest Shortfalls and Prepayment Interest Shortfalls) for such Payment Date over (ii) funds on deposit in the Note Account available to be distributed therefor on such Payment Date and (B) the Guaranteed Principal Amount.

“Definitive Notes”:  Notes other than Book-Entry Notes.

“Deleted Mortgage Loan”:  A Mortgage Loan replaced or to be replaced by a Qualified Replacement Mortgage Loan.

“Delinquency Amount”:  As of any Payment Date, the product of the Rolling Delinquency Percentage for such Payment Date and the Mortgage Loans as of the average Aggregate Principal Balance of the Mortgage Loans as of the immediately preceding three Determination Dates.

“Delinquency Percentage”:  For any Payment Date, the rolling three month average of the fraction, expressed as a percentage, (i) the numerator of which is the aggregate of the Principal Balances as of the related Determination Date of all Mortgage Loans that were 90 or more days contractually delinquent, in foreclosure, REO Property or for which the related Mortgagor was in a bankruptcy proceeding and the related Mortgage Loan was 90 or more days contractually delinquent or paying a reduced Monthly Payment as a result of a bankruptcy 

 

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workout as of end of the related Collection Period and the denominator of which is the Aggregate Principal Balance of all Mortgage Loans as of the related Determination Date.

“Deposit Date”:  The date each month on which funds on deposit in the Collection Account are remitted by the Servicer to the Indenture Trustee for deposit into the Note Account, which date shall be with respect to any Payment Date, the 18th day of the month in which such Payment Date occurs, or the next succeeding Business Day, if such 18th day is not a Business Day.

“Depositor”:  Wachovia Mortgage Loan Trust, LLC.

“Determination Date”:  As to any Payment Date, the last day of the Due Period relating to such Payment Date.

“Due Period”:  With respect to any Payment Date, the period commencing on the second day of the calendar month immediately preceding the calendar month in which such Payment Date occurs (or, with respect to the first Payment Date, commencing the day following the Cut-off Date for each Mortgage Loan) and ending on the first day of the calendar month in which such Payment Date occurs.

“Eligible Account”:  Either (A) a segregated account or accounts maintained with an institution the deposits of which are insured by the Bank Insurance Fund or the Savings Association Insurance Fund of the FDIC, the unsecured and uncollateralized debt obligations of which shall be rated “   ” or better by [Rating Agency] and “   ” or better by [Rating Agency] and in the highest short term rating category by [Rating Agencies], and that is either (i) a federal savings and loan association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing and in
good standing under the federal banking laws, (iv) a principal subsidiary of a bank holding company, or (v) which is approved in writing by the Note Insurer or (B) a trust account maintained with the trust department of a federal or state chartered depository institution or trust company, having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity, the unsecured and uncollateralized debt obligations of which shall be rated “   ” or better by [Rating Agency].  Any Eligible Accounts maintained with the Indenture Trustee shall conform to the preceding clause (B).

“Event of Default”:  As defined in Section 5.01.

“Excess Cash”:  With respect to any Payment Date, will be equal to Available Funds for such Payment Date, reduced by the sum of (i) the amount payable to the PMI Insurer as premium for such Payment Date under the PMI Policy, (ii) the Note Insurer Premium owing to the Note Insurer in respect of the Notes for such Payment Date, (iii) the Note Interest for such Payment Date, (iv) the Monthly Principal for such Payment Date and (v) the amount owing to the Note Insurer under the Insurance Agreement for reimbursement for prior draws made on the Insurance Policy in respect of the Notes and any other amounts owing to the Note Insurer under the Insurance Agreement (including any unpaid Note Insurer Premiums in respect of the Notes).

“Excess Cash Payment”.  As defined in clause fourth of Section 8.02(c).

 

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“FDIC”:  The Federal Deposit Insurance Corporation and its successors in interest.

“Final Certification”:  A certification as to the completeness of each Mortgage File prepared by the Custodian on behalf of the Indenture Trustee, and provided by the Indenture Trustee on or before the first anniversary of the Closing Date pursuant to Section 6.15(b).

“Final Maturity Date”:  The Payment Date in November  2030.

“Fiscal Agent”:  As defined in the Insurance Policy.

“Full Prepayment”:  With respect to any Mortgage Loan, when any one of the following occurs:  (i) payment is made by the Mortgagor to the Servicer of 100% of the outstanding principal balance of such Mortgage Loan, together with all accrued and unpaid interest thereon at the Mortgage Interest Rate on such Mortgage Loan, (ii) payment is made to the Indenture Trustee of the Purchase Price of such Mortgage Loan in connection with the purchase of such Mortgage Loan by the Seller or the Servicer or (iii) payment is made to the Servicer of all Insurance Proceeds and Liquidation Proceeds, and other payments, if any, that have been determined by the Servicer in accordance with the provisions of the Servicing Agreement to be finally recoverable, in the Servicer’s reasonable judgment, in respect of such Mortgage Loan.

“Grant”:  To assign, transfer, mortgage, pledge, create and grant a security interest in, deposit, set-over and confirm.  A Grant of a Mortgage Loan and related Mortgage Files, a Permitted Investment, the Servicing Agreement, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, or any other instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including, without limitation, the immediate and continuing right to claim for, collect, receive and give receipts for principal and interest payments thereunder, insurance proceeds, Purchase Prices and all other moneys payable thereunder and all proceeds thereof, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise, and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

“Guaranteed Principal Amount”:  (a) With respect to any Payment Date (other than Payment Date specified in (b)), the Overcollateralization Deficit, if any, for such Payment Date and (b) on the earlier to occur of the Payment Date in December, 2030 (after giving effect to all distributions of principal on the Notes) or the Redemption Date (after giving effect to all distribution of principal on the Notes), an amount equal to the Note Balance.

“Highest Lawful Rate”:  As defined in Section 11.19.

“Indemnification Agreement”:  As defined in the Insurance Agreement.

“Indenture”:  This instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended.  All references in this instrument to designated “Articles”, “Sections”, “Subsections” and other subdivisions are to the designated Articles, Sections, Subsections and other subdivisions of this instrument as originally 

 

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executed.  The words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Subsection or other subdivision.

“Indenture Trustee”:         , and any Person resulting from or surviving any consolidation or merger to which it may be a party until a successor Person shall have become the Indenture Trustee pursuant to the applicable provisions of this Indenture, and thereafter “Indenture Trustee” shall mean such successor Person.

“Indenture Trustee’s Fee”:  With respect to the Notes, the Indenture Trustee’s monthly fee, equal to 1/12th of          % of the Aggregate Principal Balance of the Mortgage Loans as of the first day of the applicable Due Period.

“Independent”:  When used with respect to any specified Person, means such a Person who (i) is in fact independent of the Issuer and any other obligor upon the Notes, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer or in any such other obligor or in an Affiliate of the Issuer or such other obligor, and (iii) is not connected with the Issuer or any such other obligor as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.  Whenever it is herein provided that any Independent Person’s opinion or certificate shall be furnished to the Indenture Trustee, such Person shall be appointed by an Issuer Order and such opinion or certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.

“Individual Note”:  A Note of an original principal amount of $          (provided, however, one Note may be less than that amount); a Note of an original principal amount in excess of $          shall be deemed to be a number of Individual Notes equal to the quotient obtained by dividing such original principal amount by $         .

“Initial Certification”:  A certification as to the completeness of each Mortgage File prepared by the Custodian on behalf of the Indenture Trustee and provided by the Custodian on the Closing Date pursuant to Section 6.15(a).

“Initial Redemption Date”:  The first Payment Date on which the aggregate Note Balance is less than 10% of the Original Note Balance.

“Insurance Agreement”:  The Insurance and Indemnity Agreement, dated as of          , among the Note Insurer, the Issuer, the Seller and the Depositor.

“Insurance Policy”:  The note guaranty insurance policy No.          , dated          , issued by the Note Insurer to the Indenture Trustee for the benefit of the Noteholders, pursuant to which the Note Insurer guarantees payment of Insured Payments.  A specimen of the Insurance Policy is attached hereto as Exhibit B.

“Insurance Policy Payments Account”:  The account established pursuant to Section 8.03 hereof. 

“Insured Payments”:  As to the Notes and any Payment Date, the amount required to be paid by the Note Insurer under the Insurance Policy.  

 

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“Insurance Proceeds”:  As defined in the Servicing Agreement.

“Interest Period”:  With respect to a Payment Date, the calendar month immediately preceding the month in which such Payment Date occurs.

	
            “Issuer”:    
 	
            Loan Trust 200 - , a Delaware statutory trust.
 

“Issuer Order” and “Issuer Request”:  A written order or request of the Issuer signed on behalf of the Issuer by an Authorized Officer of the Owner Trustee or, in the case of such order or request required by Section 2.11, by an Authorized Officer of the holder of the Certificate and delivered to the Indenture Trustee or the Authenticating Agent, as applicable.

“Letter Agreement”:  The Letter of Representations to The Depository Trust Company from the Indenture Trustee and the Issuer dated          .

“Liquidated Mortgage Loan”:  As defined in the Servicing Agreement.

“Liquidation Date”:  With respect to any Mortgage Loan, the date of the final receipt of all Liquidation Proceeds, Insurance Proceeds or other payments with respect to such Mortgage Loan.

“Liquidation Proceeds”:  As defined in the Servicing Agreement.

“Loan-to-Value Ratio”:  As defined in the Mortgage Loan Sale Agreement.

“Management Agreement”:  That certain agreement, dated as of          , between the Issuer and the Indenture Trustee pursuant to which the Indenture Trustee, as manager, will perform certain obligations of the Issuer hereunder.

“Maturity”:  With respect to any Note, the date on which the entire unpaid principal amount of such Note becomes due and payable as therein or herein provided, whether at the Final Maturity Date or by declaration of acceleration, call for redemption or otherwise.

“Monthly Advance”:  As defined the Servicing Agreement.

“Monthly Payment”:  With respect to any Mortgage Note, the amount of each monthly payment payable under such Mortgage Note by the Mortgagor in accordance with its terms, including, one month’s accrued interest on the related Principal Balance at the then applicable Mortgage Interest Rate, but net of any portion of such monthly payment that represents late payment charges, extension fees or collections allocable to payments to be made by Mortgagors for payment of insurance premiums or similar items.

“Monthly Principal”:  For the Notes and any Payment Date, an amount equal to (a) the aggregate of (i) all scheduled payments of principal received (or advanced or to be advanced on the related Deposit Date) with respect to the Mortgage Loans and due during the related Due Period and all other amounts collected, received or otherwise recovered in respect of principal on such Mortgage Loans (including Principal Prepayments, but not including Payments Ahead that are not allocable to principal for the related Due Period) during or in respect of the related 

 

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Collection Period, (ii) the aggregate of the amounts allocable to principal deposited in the Note Account on the related Deposit Date by the Issuer, the Depositor, the Servicer or the Note Insurer in connection with a repurchase, release, removal or substitution of any Mortgage Loans pursuant to this Indenture, and (iii) in connection with the redemption of the Notes, that portion of the Redemption Price in respect of principal, reduced by (b) the amount of any Overcollateralization Surplus and Payment Date.

“Monthly Servicing Fee”:  As defined in the Servicing Agreement.

[“Moody’s”:  Moody’s Investors Service, Inc. and its successors in interest.]

“Mortgage”:  The mortgage, deed of trust or other instrument creating a first lien on an estate in fee simple in real property securing a Mortgage Loan.

“Mortgage File”:  As defined in the Mortgage Loan Sale Agreement.

“Mortgage Interest Rate”:  With respect to each Mortgage Loan, the rate per annum set forth in the related Mortgage Note at which interest accrues on such Mortgage Loan, in each case after giving effect to any modification of a Mortgage Loan for any period in connection with a bankruptcy or similar proceeding involving the related Mortgagor or a modification, waiver or amendment of such Mortgage Loan granted or agreed to by the Servicer in accordance with the Servicing Agreement.

“Mortgage Loan”:  Each of the mortgage loans Granted to the Indenture Trustee under this Indenture as security for the Notes and that from time to time comprise part of the Trust Estate, including any property that secures a Mortgage that becomes REO Property.  The Mortgage Loans are listed on the Mortgage Loan Schedule annexed hereto as Schedule I.

“Mortgage Loan Contribution Agreement”:  That certain agreement, dated as of          , between the Depositor and the Issuer pursuant to which the Mortgage Loans will be acquired from the Depositor by the Issuer for inclusion in the Trust Estate.

“Mortgage Loan Pool”:  The pool of Mortgage Loans Granted to the Indenture Trustee under this Indenture as security for the Notes. 

“Mortgage Loan Sale Agreement”:  That certain agreement, dated as of          , between the Seller and the Depositor pursuant to which the Mortgage Loans will be acquired from the Seller by the Depositor.

“Mortgage Loan Schedule”:  As of any date, the schedule of mortgage loans included in the Trust Estate, Schedule I hereto identifies the Mortgage Loans being Granted to the Indenture Trustee on the Closing Date.  The Mortgage Loan Schedule shall be amended by the Servicer as appropriate from time to time to reflect the deletion and substitution of Mortgage Loans in accordance with the terms of the Basic Documents.  The Mortgage Loan Schedule shall identify each Mortgage Loan by the Servicer’s loan number and address (including the state) of the related Mortgaged Property and shall set forth as to each Mortgage Loan the initial Loan-to-Value Ratio or Combined Loan-to-Value Ratio, the Principal Balance as of the Cut-off Date, the Mortgage Interest Rate, the currently Monthly Payment amount and the stated maturity date of 

 

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the related Mortgage Note.  The Issuer shall cause the initial Mortgage Loan Schedule to be delivered by the Seller to the Indenture Trustee in both physical and computer-readable form.

“Mortgage Note”:  The note or other instrument evidencing the indebtedness of a Mortgagor under the related Mortgage Loan.

“Mortgaged Property”:  The underlying property securing a Mortgage Note.

“Mortgagor”:  The obligor under a Mortgage Note.

“Net Liquidation Proceeds”:  As defined in the Servicing Agreement.

“Nonrecoverable Advance”:  As defined in the Servicing Agreement.

“Note Account”:  The segregated trust account, which shall be an Eligible Account, established and maintained pursuant to Section 8.02 and entitled “         , as Indenture Trustee for           Loan Trust 200 -           Loan Backed Notes, Series 200 -  Note Account,” on behalf of the Noteholders and the Note Insurer.

“Note Balance”:  With respect to the Notes, the aggregate of the Current Note Balances of all Notes Outstanding at the time of determination.

“Noteholder” or “Holder”:  The Person in whose name a Note is registered in the Note Register, except that, solely for the purpose of taking any action under Section 5.02 or giving of any consent pursuant to this Indenture, any Note registered in the name of the Issuer, the Seller, the Servicer or the Depositor or any Persons actually known by a Responsible Officer of the Indenture Trustee to be an Affiliate of the Issuer, the Seller, the Servicer or the Depositor shall be deemed not to be Outstanding and the percentage interest evidenced thereby shall not be taken into account in determining whether Holders of the requisite percentage interests necessary to take any such action or effect any such consent have acted or consented unless the Issuer, the Seller, the
Servicer, the Depositor or any such Person is an owner of record of all of the Notes.

	
            “Note Insurer”:    
 	
            , a   
 	
            stock insurance company, and successors thereto.
 

“Note Insurer Premium Letter”:  The commitment letter dated          , from the Note Insurer to the Seller regarding the issuance of a financial guaranty insurance policy.

“Note Insurer Default”:  The existence and continuance of any of the following: 

(a)               the Note Insurer fails to make a payment required under the Insurance Policy in accordance with its terms;

(b)               the Note Insurer (A) files any petition or commences any case or proceeding under any provision or chapter of the Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes a general assignment for the benefit of its creditors, or (C) has an order for relief entered against it under the Bankruptcy Code or any other similar 

 

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federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which is final and nonappealable; or 

(c)               a court of competent jurisdiction, the New York Department of Insurance or other competent regulatory authority enters a final and nonappealable order, judgment or decree (A) appointing a custodian, trustee, agent or receiver for the Note Insurer or for all or any material portion of its property or (B) authorizing the taking of possession by a custodian, trustee, agent or receiver of the Note Insurer (or the taking of possession of all or any material portion of the property of the Note Insurer).

Notwithstanding anything to the contrary contained herein, upon the existence and continuance of a Note Insurer Default, the consent by the Note Insurer shall not be required to any action or inaction hereunder and the Note Insurer shall not have any rights with respect thereto; provided, however, that such rights shall be immediately reinstated following cure of such Note Insurer Default. 

“Note Insurer Premium”:  The premium due to the Note Insurer under the Note Insurer Premium Letter on the Closing Date and on each Payment Date thereafter, which amount as to each Payment Date shall be equal to the product of the Note Insurer Premium Rate and the related Note Balance immediately prior to such Payment Date.

“Note Insurer Premium Rate”:  The premium percentage specified in the Note Insurer Premium Letter.

“Note Interest”:  As to the Notes and any Payment Date, the amount of interest payable to Holders of such Notes on such Payment Date, which amount shall be equal to interest at 1/12th of the Note Interest Rate on the Note Balance as of the preceding Payment Date (after giving effect to the payment, if any, in reduction of principal made on such Notes on such preceding Payment Date).  All calculations of interest on the Notes will be computed on the basis of twelve thirty-day months and a year of 360 days.

“Note Interest Rate”:  With respect to each Interest Period prior to the Initial Redemption Date,          % per annum, and for each Interest Period thereafter, ______% per annum.

“Note Register”:  As defined in Section 2.06.

“Note Registrar”:  As defined in Section 2.06.

“Notes”:  The           Loan Trust 200 -  Mortgage Backed Notes, Series 200 - , issued pursuant to this Indenture.

“Notice of Claim”:  The notice required to be furnished by the Indenture Trustee to the Note Insurer in the event an Insured Payment is required to be paid under the Insurance Policy with respect to any Payment Date, in the form set forth as Exhibit C hereto.

“Officers’ Certificate”:  A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President, Chief Operating Officer or a Vice President of the Seller, 

 

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the Depositor, the Servicer or, in the case of the Issuer, an Authorized Officer of the Owner Trustee, as the case may be, and delivered to the Indenture Trustee, Note Insurer or each Rating Agency, as the case may be.

“Opinion of Counsel”:  A written opinion of counsel reasonably acceptable to the Indenture Trustee and, in the case of opinions delivered to the Note Insurer, reasonably acceptable to it.  Any expense related to obtaining an Opinion of Counsel for an action requested by a party shall be borne by the party required to obtain such opinion or seeking to effect the action that requires the delivery of such Opinion of Counsel, except in such instances where such opinion is at the request of the Indenture Trustee, in which case such expense shall be an expense of the Servicer.

“Original Note Balance”: The aggregate principal balance of the Notes at the issue date thereof, equal to $         .

“Other Insurance Policies”:  All insurance policies insuring any Mortgage Loan or Mortgaged Property, to the extent the Issuer or the Indenture Trustee has any interest therein, including the PMI Policy.

“Outstanding”:  As of the date of determination, all Notes theretofore authenticated and delivered under this Indenture except:

(i)         Definitive Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation;

(ii)         Notes or portions thereof for whose payment or redemption money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent (other than the Issuer) in trust for the Holders of such Notes; provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor, satisfactory to the Indenture Trustee, has been made;

(iii)        Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser (as defined by the Uniform Commercial Code of the applicable jurisdiction); and

(iv)        Notes alleged to have been destroyed, lost or stolen that have been paid as provided for in Section 2.07;

provided, however, that in determining whether the Holders of the requisite percentage of the Note Balance of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Issuer, any other obligor upon the Notes or any Affiliate of the Issuer, the Seller, the Servicer or the Depositor or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the 

 

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Indenture Trustee knows to be so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes or any Affiliate of the Issuer, the Seller, the Servicer or the Depositor or such other obligor; provided, further, however, that Notes that have been paid with the proceeds of the Insurance Policy shall be deemed to be Outstanding for the purposes of this Indenture, such payment to be evidenced by written notice from the Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed to the
Holder thereof to the extent of any payments thereon made by the Note Insurer.

“Overcollateralization Amount”:  As to any Payment Date, the amount, if any, by which (x) the Aggregate Principal Balance of the Mortgage Loans as of the end of the related Due Period exceeds (y) the Note Balance for such Payment Date, after taking into account Monthly Principal (disregarding any permitted reduction thereof in such Monthly Principal due to an Overcollateralization Surplus made on such Payment Date) to be applied in reduction of the Note Balance on such Payment Date.  If the Aggregate Principal Balance of the Mortgage Loans is less than the Note Balance for such Payment Date, determined as provided above, the Overcollateralization Amount and Payment Date shall be zero.

“Overcollateralization Deficiency Amount”:  With respect to any Payment Date is the amount, if any, by which the Required Overcollateralization Amount exceeds the Overcollateralization Amount.

“Overcollateralization Deficit”:  As to any Payment Date, the amount, if any, by which the Note Balance on such Payment Date (after taking into account any payments to be paid on such Payment Date in reduction of the Note Balance, including Excess Cash payments) exceeds the Aggregate Principal Balance of the Mortgage Loans as of the end of the related Due Period.  If the Aggregate Principal Balance of the Mortgage Loans as determined pursuant to the preceding sentence is greater than the related Note Balance for such Payment Date determined as provided above, the Overcollateralization Deficit for such Payment Date shall be zero.

“Overcollateralization Surplus”:  As to any Payment Date, the amount, if any, by which (x) the related Overcollateralization Amount on such Payment Date exceeds (y) the related Required Overcollateralization Amount on such Payment Date.

“Owner Trustee”:         , not in its individual capacity, but solely as owner trustee under the Trust Agreement, and any successor owner trustee thereunder.

“Owner Trustee Fee”:  The fee payable to the Owner Trustee pursuant to the Trust Agreement.

“Paying Agent”:  The Indenture Trustee or any other depository institution or trust company that is authorized by the Issuer pursuant to Section 3.03 to pay the principal of, or interest on, any Notes on behalf of the Issuer, which agent, if not the Indenture Trustee, shall 

 

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have signed an instrument agreeing to be bound by the terms of this Indenture applicable to the Paying Agent.

“Payment Ahead”:  As defined in the Servicing Agreement.

“Payment Date”:  The      day of each month or, if any such day is not a Business Day, the Business Day immediately following such     day, beginning          .

“Payment Date Statement”:  The statement prepared pursuant to Section 2.08(d) with respect to collection on or in respect of the Mortgage Loans and other assets of the Trust Estate and payments on or in respect of the Notes, based upon the information contained in the Servicer Remittance Report prepared pursuant to the Servicing Agreement and setting forth the following information with respect to each Payment Date (to the extent the Servicer has made such information (other than the information described in clause (ii), (iii), (iv), (v) and (xv) below) available to the Indenture Trustee):

(i)                the amount of such payment to Noteholders allocable to (x) Monthly Principal (separately setting forth Principal Prepayments) and (y) any principal payments made pursuant to Section 8.02(c)(vi) hereof;

	
            (ii)
 	
            the amount of such payment to Noteholders allocable to Note Interest;
 

(iii)              the Note Balance, after giving effect to the payment of Monthly Principal and any principal payment made pursuant to Section 8.02(c)(vi) hereof applied to reduce such Note Balance on such Payment Date;

(iv)              the Aggregate Principal Balance of the Mortgage Loans  as of the end of the related Due Period;

(v)               the amount of Monthly Advances made with respect to such Payment Date and the aggregate amount of unreimbursed Monthly Advances and Servicing Advances, if any;

(vi)              the number and aggregate of the Principal Balances of Mortgage Loans (including the Principal Balances of all Mortgage Loans in foreclosure) contractually delinquent (i) one month, (ii) two months and (iii) three or more months, as of the end of the related Collection Period;

(vii)             the number and aggregate of the Principal Balances of the Mortgage Loans in foreclosure or subject to other similar proceedings, and the number and aggregate of the Principal Balance of Mortgage Loans and in the aggregate, the Mortgagor of which is known by the Servicer to be in bankruptcy as of the end of the related Collection Period and the book value of any real estate acquired through foreclosure, grant of a deed in lieu of foreclosure or other similar proceedings during the related Collection Period;

(viii)            the aggregate of the Principal Balances of the Mortgage Loans repurchased by the Seller or purchased by the Servicer, separately setting forth the 

 

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aggregate of the Principal Balances of Mortgage Loans and in the aggregate delinquent for three consecutive monthly installments purchased by the Servicer at its option pursuant to the Servicing Agreement;

	
            (ix)
 	
            the amount of any Insured Payments for such Payment Date;
 

(x)               the aggregate amount of the Monthly Servicing Fee paid to or retained by the Servicer for the related Collection Period;

(xi)              the Overcollateralization Amount, the then applicable Required Overcollateralization Amount, the Overcollateralization Surplus, if any, and the Overcollateralization Deficit, if any, with respect to such Payment Date;

(xii)             the aggregate Principal Balance of the three largest outstanding Mortgage Loans as of the related Determination Date;

(xiii)            the aggregate amount of Realized Losses incurred during the related Collection Period and the cumulative amount of Realized Losses since the Cut-off Date; 

	
            (xiv)
 	
            the amount of premium due to the PMI Insurer under the PMI Policy;
 

(xv)             the Delinquency Percentage and the Rolling Loss Percentage (as defined in the Servicing Agreement) relating to such Payment Date; and

(xvi)            the number of Mortgage Loan modifications made by the Servicer during the Collection Period and the type of modification made with respect to each such Mortgage Loan.

In the case of information furnished pursuant to subclauses (i) and (ii) above, the amounts shall be expressed as a dollar amount per Individual Note.

“Percentage Interest”:  With respect to a Note, the undivided percentage interest (carried to eight places rounded down) obtained by dividing the original principal balance of such Note by the Original Note Balance and multiplying the result by 100.

“Permitted Investments”:  One or more of the following obligations, instruments and securities:

(a)               direct general obligations of, or obligations fully guaranteed by, the United States of America, the Federal Home Loan Mortgage Corporation, Federal National Mortgage Corporation, the Federal Home Loan Banks or any agency or instrumentality of the United States of America rated “         ” or higher by [Rating Agency], the obligations of which are backed by the full faith and credit of the United States of America;

(b)               (i) demand and time deposits in, certificates of deposit of, banker’s acceptances issued by, or federal funds sold by any depository institution or trust company (including the Indenture Trustee or its agent acting in their respective 

 

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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 [Rating Agency] and of [Rating Agency] and provided that each such investment has an original maturity of no more than 365 days and (ii) any other demand or time deposit or deposit which is fully insured by the FDIC;

(c)               repurchase obligations with a term not to exceed 30 days with respect to any security described in clause (a) above and entered into with a depository institution or trust company (acting as a principal) rated “         “ or higher by [Rating Agency] and rated “         “ or higher by [Rating Agency]; provided, however, that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (a) above and must (i) be valued daily at current market price plus accrued interest,
(ii) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the Indenture Trustee in exchange for such collateral and (iii) be delivered to the Indenture Trustee or, if the Indenture Trustee is supplying the collateral, an agent for the Indenture Trustee, in such a manner as to accomplish perfection of a security interest in the collateral by possession of certified securities.

(d)               securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States of America or any state thereof which has a long-term unsecured debt rating in the highest available rating category of each of the Rating Agencies at the time of such investment;

(e)               commercial paper having an original maturity of less than 365 days and issued by an institution having a short-term unsecured debt rating in the highest available rating category of each of the Rating Agencies at the time of such investment;

(f)                a guaranteed investment contract approved by each of the Rating Agencies and the Note Insurer and issued by an insurance company or other corporation having a long-term unsecured debt rating in the highest available rating category of each of the Rating Agencies at the time of such investment;

(g)               money market funds having ratings in the two highest available rating category of [Rating Agency] and one of the two highest available rating categories of [Rating Agency] at the time of such investment which invest only in other Permitted Investments (any such money market funds which provide for demand withdrawals being conclusively deemed to satisfy any maturity requirements for Permitted Investments set forth herein) including money market funds of the Indenture Trustee and any such funds that are managed by the Indenture Trustee or its affiliates or which Indenture Trustee or any affiliate acts as advisor as long as such money market funds satisfy the criteria of this subparagraph (g); and

 

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(h)               any investment approved in writing by the Note Insurer and written evidence that any such investment will not result in a downgrading or withdrawal of the rating by each Rating Agency on the Notes.

The Indenture Trustee may purchase from or sell to itself or an affiliate, as principal or agent, the Permitted Investments listed above.  All Permitted Investments in a trust account under the Indenture shall be made in the name of the Indenture Trustee for the benefit of the Noteholders and the Note Insurer.

“Person”:  Any individual, corporation, limited liability company, partnership, joint venture, association joint-stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

“PMI Insurer”:           , a monoline private insurance company organized and created under the laws of the State of          , or its successors in interest.

“PMI Mortgage Loans”:  The list of Mortgage Loans insured by the PMI Insurer attached hereto as Exhibit D.

“PMI Policy”:  The Primary Mortgage Insurance Policy (No.          ) with respect to the PMI Mortgage Loans and all endorsements thereto dated the Closing Date, issued by the PMI Insurer.

“Predecessor Notes”:  With respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the lost, destroyed or stolen Note.

“Preference Claim”:  As defined in Section 8.03(g) of this Indenture.

“Prepayment Interest Shortfall”:  With respect to any Mortgage Loan as to which a prepayment in whole or in part was received by the Servicer from the related Mortgagor during a Collection Period, an amount equal to the difference between (1) 30 days’ interest at the Mortgage Interest Rate on the Principal Balance of such Mortgage Loan (immediately prior to such prepayment) and (2) the amount of interest actually collected by the Servicer on such Mortgage Loan during the related Due Period.

“Prepayment Premium”:  With respect to any Collection Period, any prepayment premium, penalty or charge payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the related Mortgage Note.

“Principal Balance”:  As to any Mortgage Loan and any Determination Date, the actual outstanding principal amount thereof as of the close of business on the Determination Date in the preceding month (or, in the case of the first Payment Date, as of the Cut-off Date) less (i) all scheduled payments of principal received or advanced (or to be advanced on the related Deposit Date) with respect to the Mortgage Loan and due during the related Due Period and all other amounts collected, received or otherwise recovered in respect of principal on the Mortgage Loan 

 

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(including Principal Prepayments, but not including Payments Ahead that are not allocable to principal for the related Due Period) during or in respect of the related Collection Period, Net Liquidation Proceeds and Trust Insurance Proceeds allocable to principal recovered or collected in respect of such Mortgage Loan during the related Collection Period, (ii) the portion of the Purchase Price allocable to principal to be remitted by the Seller or the Servicer to the Indenture Trustee on or prior to the related Deposit Date in connection with a repurchase of such Mortgage Loan pursuant to the Mortgage Loan Sale Agreement, the Servicing Agreement or Section 8.05 hereof, to the extent such amount is actually remitted on or prior to such Deposit Date, and (iii) the amount to be remitted by the Seller to the Indenture Trustee on the related Deposit Date in connection with a substitution of a
Qualified Replacement Mortgage Loan for such Mortgage Loan pursuant to the Mortgage Loan Sale Agreement and Section 8.05 hereof, to the extent such amount is actually remitted on or prior to such Deposit Date; provided, however, that Mortgage Loans that have become Liquidated Mortgage Loans since the end of the preceding Determination Date (or, in the case of the first Determination Date, since the Cut-off Date) will be deemed to have a Principal Balance of zero on the current Determination Date.

“Principal Prepayment”:  As to any Mortgage Loan and Collection Period, any payment by a Mortgagor or other recovery in respect of principal on a Mortgage Loan (including Net Liquidation Proceeds and Trust Insurance Proceeds) that, in the case of a payment by a Mortgagor, is received in advance of its scheduled due date and is not a Payment Ahead.

“Proceeding”:  Any suit in equity, action at law or other judicial or administrative proceeding.

“Purchase Price”:  With respect to any Defective Mortgage Loan, an amount equal to (i) the sum of (A) the Principal Balance of such Defective Mortgage Loan as of the beginning of the Due Period next preceding the Deposit Date on which such repurchase or purchase is required to occur, (B) interest computed at the applicable Mortgage Interest Rate on such Principal Balance from the date to which interest was last paid by the Mortgagor to the last day of the Due Period immediately preceding the Deposit Date on which such repurchase occurs and (C) any previously unreimbursed Monthly Advances with respect to principal and Servicing Advances made on or in respect of such Defective Mortgage Loan, less (ii) any payments of principal and interest in respect of such Defective Mortgage Loan made by or on behalf of the related
Mortgagor during such Due Period.  With respect to any Qualified Replacement Mortgage Loan, the amount remitted by the Seller to the Indenture Trustee on or prior to the Deposit Date relating to a Payment Date in connection with a substitution of such Qualified Replacement Mortgage Loan for a Mortgage Loan pursuant to the Mortgage Loan Sale Agreement or Section 8.05 hereof.

“Qualified Replacement Mortgage Loan”:  A Mortgage Loan that is substituted for a Deleted Mortgage Loan pursuant to Section 8.05 that must, at the end of the Due Period preceding the date of such substitution, (i) have an outstanding principal balance (when taken together with any other Qualified Replacement Mortgage Loan being substituted for such Deleted Mortgage Loan), not in excess of and not substantially less than the unpaid principal balance of the Deleted Mortgage Loan at the end of the Due Period preceding the date of substitution, (ii) be of the same type of Mortgage Interest Rate (i.e. fixed or adjustable) and have the Mortgage Interest Rate not less than the Mortgage Interest Rate on the Deleted Mortgage 

 

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Loan, and, with respect to Mortgage Loans which have an adjustable Mortgage Rate, have maximum rates, minimum rates, margin indices, gross margins, and caps no more than 1% greater than or less than those of the Deleted Mortgage Loan, (iii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (iv) have a Loan-to-Value Ratio or Combined Loan-to-Value Ratio equal to or lower than the Loan-to-Value Ratio or Combined Loan-to-Value Ratio of the Deleted Mortgage Loan, (v) have the same or better lien priority as the Deleted Mortgage Loan, (vi) comply as of the date of substitution with each representation and warranty set forth in Section 4(b) and Exhibit B of the Mortgage Loan Sale Agreement, (vii) have the same or better property type as the Deleted Mortgage Loan, (viii) have the same or better
occupancy status and (ix) be otherwise acceptable to the Note Insurer.  In the event that one or more mortgage loans are proposed to be substituted for one or more Deleted Mortgage Loans, the foregoing tests may be met on a weighted average basis or other aggregate basis acceptable to the Note Insurer, except that the requirements of clauses (v), (vi), (vii) and (viii) hereof must be satisfied as to each Qualified Replacement Mortgage Loan.

“Rating Agencies”:  [Rating Agency] and [Rating Agency] (each, a “Rating Agency”).  If any such agency or a successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical credit rating agency, or other comparable Person, designated by the Servicer, notice of which designation shall be given to the Indenture Trustee.

“Realized Loss”:  As defined in the Servicing Agreement.

“Record Date”:  With respect to any Payment Date, the date on which the Persons entitled to receive any payment of principal of or interest on any Notes (or notice of a payment in full of principal) due and payable on such Payment Date are determined; such date shall be the last Business Day preceding such Payment Date or, with respect to Definitive Notes, the last Business Day of the month preceding the month of such Payment Date.  With respect to a vote of Noteholders required or allowed hereunder, the Record Date shall be the later of (i) 30 days prior to the first solicitation of consents or (ii) the date of the most recent list of Noteholders furnished to the Indenture Trustee pursuant to Section 7.01(a) prior to such solicitation.

“Redemption Date”:  With respect to the Notes, the Payment Date, if any, on which the Notes are redeemed pursuant to Article X hereof which date may occur on or after the Initial Redemption Date.

“Redemption Price”:  With respect to any Note to be redeemed in whole or in part, an amount equal to 100% of the Current Note Balance of the Note to be so redeemed, together with accrued and unpaid interest on such amount at the Note Interest Rate.

“Relief Act”:  The Soldiers’ and Sailors’ Civil Relief Act of 1940, as amended.

“Relief Act Interest Shortfall”:  With respect to any Payment Date, for any Mortgage Loan 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 such Mortgage Loan during such Due Period is less than (ii) 30 

 

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days’ at the Mortgage Interest Rate on the Principal Balance of such Mortgage Loan before giving effect to the application of the Relief Act.

“Remittable Funds”:  As defined in the Servicing Agreement.

“REO Property”:  As defined in the Servicing Agreement.

	
            “Representative”:    
 	
            .
 

“Required Overcollateralization Amount”:  Means with respect to the Notes:

(a)               for any Payment Date on which the Step Down Trigger is not occurring, the greater of:  (i)         % of the Aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date and (ii) either (A) if the Step Up Rolling Delinquency Test is met on such Payment Date but neither the Step Up Rolling Loss Test nor the Step Up Cumulative Loss Test is met on such Payment Date,    % of the Delinquency Amount for such Payment Date or (B) if either the Step Up Rolling Loss Test or the Step Up Cumulative Loss Test is met on such Payment Date,    % of the Delinquency Amount for such Payment Date.

(b)               for any Payment Date on which the Step Down Trigger is occurring the greatest of (i) the lesser of (A)    % of the Aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date and (B) the Stepped Down Required Overcollateralized Percentage of the Aggregate Principal Balance of the Mortgage Loans as of the Determination Date relating to such Payment Date, (ii) either (A) if the Step Up Rolling Delinquency Test is met as such Payment Date but neither the Step Up Rolling Loss Test nor the Step Up Cumulative Loss Test is met on such Payment Date,    % of the Delinquency Amount for such Payment Date or (B) if either the Step Up Rolling Loss Test or the Step Up Cumulative Loss Test is met on such
Payment Date,    % of the Delinquency Amount for such Payment Date, (iii)   % of the Aggregate Principal Balance of the Mortgage Loans as of the Cut-Off Date and (iv) three times the Principal Balance of the largest Mortgage Loan then outstanding.

(c)               provided, however, for any Payment Date on which the Step Up Claims Denial Test is met, the Required Overcollateralization Amount determined pursuant to clause (a) or (b) above, as applicable, shall be increased by an amount equal to the product of    % and the Aggregate Principal Balance of the Mortgage Loans as of the Cut-Off Date.

The Note Insurer may, in its sole discretion, at the request of the holders of 50% or more of the ownership interests of the Issuer, modify clause (a), (b) or (c) above.

“Required Payment Amount”:  With respect to the Notes and any Payment Date, the Note Interest (net of any Relief Act Interest Shortfalls and Prepayment Interest Shortfalls) for such Payment Date plus the amount of any Overcollateralization Deficit for such Payment Date.

“Responsible Officer”:  With respect to the Indenture Trustee, the chairman or vice-chairman of the board of directors, the chairman or vice-chairman of the executive committee of 

 

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the board of directors, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, the cashier, any trust officer or assistant trust officer, the controller, any assistant controller or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

“Rolling Delinquency Percentage”:  As defined in the Servicing Agreement.

“Rolling Loss Percentage”:  As defined in the Servicing Agreement.

“Sale”:  The meaning specified in Section 5.17.

	
            “Seller”:    
 	
            .
 

“Servicer”:  With respect to any Mortgage Loan,          , a           corporation, as Servicer under the Servicing Agreement, and its permitted successors and assigns thereunder, including any successor servicers appointed pursuant to Section 6.02 of the Servicing Agreement.

“Servicer Remittance Report”:  As defined in the Servicing Agreement.

“Servicing Advance”:  As defined in the Servicing Agreement.

“Servicing Agreement”:  The Servicing Agreement, dated as of          , among the Issuer, the Servicer and the Indenture Trustee, as indenture trustee, providing, among other things, for the servicing of the Mortgage Loans, as such agreement may be amended or supplemented from time to time as permitted hereby and thereby.  Such term shall also include any servicing agreement entered into with a successor servicer. 

	
            “Servicing Fee Rate”:    
 	
            % per annum.
 

[“S&P”:  Standard & Poor’s Rating Services, a Division of The McGraw-Hill Companies, Inc., and its successors in interest.]

“Step Down Cumulative Loss Test”:  The Step Down Cumulative Loss Test will be met with respect to a Payment Date as follows: (i) for the     through the     Payment Dates, if the Cumulative Loss Percentage for such Payment Date is    % or less; (ii) for the     through the     Payment Dates, if the Cumulative Loss Percentage for such Payment Date is    % or less; (iii) for the     through the     Payment Dates, if the Cumulative Loss Percentage for such Payment Date is    % or less; and (iv) for any Payment Date after the      Payment Date, if the Cumulative Loss Percentage for such Payment Date is     % or less.

“Step Down Rolling Delinquency Test”:  The Step Down Rolling Delinquency Test will be met with respect to a Payment Date if the Rolling Delinquency Percentage for such Payment Date is     % or less.

 

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“Step Down Rolling Loss Test”:  The Step Down Rolling Loss Test will be met with respect to a Payment Date if the Rolling Loss Percentage is less than     %.

“Step Down Trigger”:  For any Payment Date after the      Payment Date, the Step Down Trigger will have occurred if each of the Step Down Cumulative Loss Test, the Step Down Rolling Delinquency Test and the Step Down Rolling Loss Test is met. In no event will the Step Down Trigger be deemed to have occurred for the      Payment Date or any preceding Payment Date.

“Stepped Down Required Overcollateralized Percentage”:  For any Payment Date for which the Step Down Trigger has occurred, a percentage equal to the greater of (x)     % and (y) (i) the percentage equivalent of a fraction, the numerator of which is the Overcolleralization Amount as of the immediately preceding Payment Date and the denominator of which is the Aggregate Principal Balance of the Mortgage Loans and REO Properties as of such Payment Date, minus (ii) the percentage equivalent of a fraction, the numerator of which is the product of (A) the percentage calculated under clause (i) above minus     % multiplied by (B) the number of consecutive Payment Dates through and including the Payment Date for which the Stepped Down Required Overcollateralized Percentage is
being calculated, up to a maximum of six, for which the Step Down Trigger has occurred, and the denominator of which is six.

“Step Up Claims Denial Test”:  The Step Up Claims Denial Test will be met if either of the following events occurs (i) the PMI Insurer is downgraded below “  ” by [Rating Agency] or [Rating Agency], or (ii) the cumulative claims denials for any 12-months preceding a Payment Date exceed     % of the Aggregate Principal Balance of the Mortgage Loans covered by the PMI Policy at the beginning of such 12-month period.

“Step Up Cumulative Loss Test”:  The Step Up Cumulative Loss Test will be met with respect to a Payment Date as follows: (i) for the     through the      Payment Dates, if the Cumulative Loss Percentage for such Payment Date is more than     %; (ii) for the      through the      Payment Dates, if the Cumulative Loss Percentage for such Payment Date is more than     %; (iii) for the      through the      Payment Dates, if the Cumulative Loss Percentage for such Payment Date is more than     %; (iv) for the      through the      Payment Dates, if the Cumulative Loss Percentage for such Payment Date is
more than     %; and (v) for the      Payment Date and any Payment Date thereafter, if the Cumulative Loss Percentage for such Payment Date is more than     %.

“Step Up Rolling Delinquency Test”:  The Step Up Rolling Delinquency Test will be met with respect to a Payment Date if the Rolling Delinquency Percentage for such Payment Date is more than     %.

“Step Up Rolling Loss Test”:  The Step Up Rolling Loss Test will be met with respect to a Payment Date, if the Rolling Loss Percentage is equal to or more than     %.

“Transition Expenses”:  As defined in the Servicing Agreement.

“Trust Agreement”:  That certain Deposit Trust Agreement, dated as of               200 , among the Depositor, the Owner Trustee,                             and the Servicer.

 

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“Trust Estate”:  All money, instruments and other property subject or intended to be subject to the lien of this Indenture for the benefit of the Noteholders and the Note Insurer as of any particular time (including, without limitation, all property and interests Granted to the Indenture Trustee, including all proceeds thereof).

“Trust Indenture Act” or “TIA”:  The Trust Indenture Act of 1939, as it may be amended from time to time.

“Trust Insurance Proceeds”:  As defined in the Servicing Agreement.

“Trust Paying Agent”:  The entity appointed to act as paying agent pursuant to the Trust Agreement with respect to amounts on deposit from time to time in the Certificate Distribution Account and distributions thereof to Certificateholders.  The initial Trust Paying Agent is                                   .

“U.S. Bankruptcy Code” shall mean the United States Bankruptcy Code, 11 U.S.C. Sections 101, et seq., as amended or supplemented from time to time.

“Vice President”:  Any vice president, whether or not designated by a number or a word or words added before or after the title “vice president”.

ARTICLE II

 

THE NOTES

	
            Section 2.01.
 	
            Forms Generally.
 

The Notes shall be in substantially the form set forth on Exhibit A attached hereto.  Each Note may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange on which the Notes may be listed, or as may, consistently herewith, be determined by the Issuer, as evidenced by its execution thereof.  Any portion of the text of any Note may be set forth on the reverse thereof with an appropriate reference on the face of the Note.

The Definitive Notes may be produced in any manner determined by the Issuer, as evidenced by its execution thereof.

	
            Section 2.02.
 	
            Forms of Certificate of Authentication.
 

The form of the Authenticating Agent’s certificate of authentication is as follows:

This is one of the Notes referred to in the within-mentioned Indenture.

[Authentication Agent], as Authenticating Agent

	
            By:__________________________________
 

Authorized Signatory

 

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            Section 2.03.
 	
            General Provisions With Respect to Principal and Interest Payment.
 

The Notes shall be designated generally as the “Mortgage Backed Notes, Series 200 - ” of the Issuer.

The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to $                , except for the Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture.  The Notes shall consist of one class designated as Class         , having a Note Interest Rate and Final Maturity Date as follows:

	
            Designation
 	
            Original Note Balance
 	
            Note Interest Rate
 	
            Final Maturity Date
 
	
             
 	
             
 	
            %
 	
             
 
	
             
 	
             
 	
             
 	
             
 

The Notes shall be issued in the form specified in Section 2.01.

Subject to the provisions of Section 3.01, Section 5.07, Section 5.09 and Section 8.02(d), the principal of the Notes shall be payable in installments ending no later than the Final Maturity Date unless the unpaid principal of such Notes become due and payable at an earlier date by declaration of acceleration or call for redemption or otherwise.

All payments made with respect to any Note shall be applied first to the interest then due and payable on such Note and then to the principal thereof.  All computations of interest accrued on any Note shall be made on the basis of a year of 360 days and twelve 30-day months.

Interest on the Notes shall accrue at the Note Interest Rate during each Interest Period on the Current Note Balance of each Outstanding Note at the end of such Interest Period.  Interest accrued during an Interest Period shall be payable on the next following Payment Date.

All payments of principal of and interest on any Note shall be made in the manner specified in Section 2.

Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes, if the Notes have become or been declared due and payable following an Event of Default and such acceleration of maturity and its consequences have not been rescinded and annulled, then payments of principal of and interest on the Notes shall be made in accordance with Section 5.07.

	
            Section 2.04.
 	
            Denominations.
 

The Notes shall be issuable only as registered Notes in the minimum denomination of $        and integral multiples of $        in excess thereof, with the exception of one Note which may be issued in a lesser amount.

 

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            Section 2.05.
 	
            Execution, Authentication, Delivery and Dating.
 

The Notes shall be executed on behalf of the Issuer by an Authorized Officer of the Owner Trustee.  The signature of such Authorized Officer of the Owner Trustee on the Notes may be manual or by facsimile.

Notes bearing the manual or facsimile signature of an individual who was at any time an Authorized Officer of the Owner Trustee shall bind the Issuer, notwithstanding that such individual has ceased to be an Authorized Officer of the Owner Trustee prior to the authentication and delivery of such Notes or was not an Authorized Officer of the Owner Trustee at the date of such Notes.

At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed on behalf of the Issuer to the Authenticating Agent for authentication; and the Authenticating Agent shall authenticate and deliver such Notes as in this Indenture provided and not otherwise.

Each Note authenticated on the Closing Date shall be dated the Closing Date.  All other Notes that are authenticated after the Closing Date for any other purpose hereunder shall be dated the date of their authentication.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Authenticating Agent by the manual signature of one of its authorized officers or employees, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

	
            Section 2.06.
 	
            Registration, Registration of Transfer and Exchange.
 

The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes.  The Indenture Trustee is hereby initially appointed “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  The Indenture Trustee shall remain the Note Registrar throughout the term hereof.  Upon any resignation of the Indenture Trustee, the Issuer shall promptly appoint a successor, with the approval of the Note Insurer, or, in the absence of such appointment, the Issuer shall assume the duties of Note Registrar.

Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.02, the Owner Trustee on behalf of the Issuer, shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount.

At the option of the Holder, Notes may be exchanged for other Notes of any authorized denominations, and of a like aggregate initial principal amount, upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for exchange, 

 

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the Owner Trustee shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the Noteholder making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Note Registrar duly executed by the Holder thereof or its attorney duly authorized in writing.

No service charge shall be made for any registration of transfer or exchange of Notes, but the Issuer and the Note Registrar may require payment of a sum sufficient to cover any tax or other governmental charge as may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.07 not involving any transfer or any exchange made by the Note Insurer.

The Note Registrar shall not register the transfer of a Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is not, and is not acquiring the Note on behalf of or with the assets of, an employee benefit plan or other retirement plan or arrangement  that is subject to Title I of the Employee Retirement Income Security Act or 1974, as amended, or Section 4975 of the Code or (ii)  the acquisition and holding of the Note by the transferee qualifies for exemptive relief under a Department of Labor Prohibited Transaction Class Exemption.  Each Beneficial Owner of a Book-Entry Note shall be deemed to make one of the foregoing representations.

	
            Section 2.07.
 	
            Mutilated, Destroyed, Lost or Stolen Notes.
 

If (1) any mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered to the Note Registrar such security or indemnity as may be required by the Note Registrar to save each of the Issuer, the Note Insurer and the Note Registrar harmless, then, in the absence of notice to the Issuer or the Note Registrar that such Note has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Issuer shall execute and upon its request the Note Registrar shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a new Note or Notes of the same tenor and aggregate initial principal amount bearing a number not contemporaneously outstanding.  If, after the delivery of such new Note, a bona fide purchaser of the
original Note in lieu of which such new Note was issued presents for payment such original Note, the Issuer and the Note Registrar shall be entitled to recover such new Note from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses incurred by the Issuer or the Note Registrar in connection therewith.  If any such mutilated, destroyed, lost or stolen Note shall have become or shall be about to become due and payable, or shall have become subject to redemption in full, instead of issuing a new Note, the Issuer may pay such Note without surrender thereof, except that any mutilated Note shall be surrendered.

 

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Upon the issuance of any new Note under this Section, the Issuer or the Note 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 reasonable expenses (including the fees and expenses of the Indenture Trustee or the Note Registrar) connected therewith.

Every new Note issued pursuant to this Section in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

	
            Section 2.08.
 	
            Payments of Principal and Interest.
 

(a)               Payments on Notes issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee to the Clearing Agency or its nominee.  Any installment of interest or principal payable on any Definitive Notes that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Record Date for such Payment Date by either (i) check mailed to such Person’s address as it appears in the Note Register on such Record Date, or (ii) by wire transfer of immediately available funds to the account of a Noteholder, if such Noteholder (A) is the registered holder of Definitive Notes having an initial
principal amount of at least $1,000,000 and (B) has provided the Indenture Trustee with wiring instructions in writing by five Business Days prior to the related Record Date or has provided the Indenture Trustee with such instructions for any previous Payment Date, except for the final installment of principal payable with respect to such Note (or the Redemption Price for any Note called for redemption, if such redemption will result in payment of the then entire unpaid principal amount of such Note), which shall be payable as provided in subsection (b) below of this Section 2.08.  A fee may be charged by the Indenture Trustee to a Noteholder of Definitive Notes for any payment made by wire transfer.  Any installment of interest or principal not punctually paid or duly provided for shall be payable as soon as funds are available to the Indenture Trustee for payment thereof, or if Section 5.07 applies, pursuant to Section 5.07.

(b)               All reductions in the principal amount of a Note (or one or more Predecessor Notes) effected by payments of installments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such Note.  The final installment of principal of each Note (including the Redemption Price of any Note called for optional redemption, if such optional redemption will result in payment of the entire unpaid principal amount of such Note) shall be payable only upon presentation and surrender thereof on or after the Payment Date therefor at the Indenture Trustee’s presenting office located within the
United States of America pursuant to Section 3.02.

 

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Whenever the Indenture Trustee expects that the entire remaining unpaid principal amount of any Note will become due and payable on the next Payment Date other than pursuant to a redemption pursuant to Article X, it shall, no later than two days prior to such Payment Date, telecopy or hand deliver to each Person in whose name a Note to be so retired is registered at the close of business on such otherwise applicable Record Date a notice to the effect that:

(i)                the Indenture Trustee expects that funds sufficient to pay such final installment will be available in the Note Account on such Payment Date; and

(ii)               if such funds are available, (A) such final installment will be payable on such Payment Date, but only upon presentation and surrender of such Note at the office or agency of the Note Registrar maintained for such purpose pursuant to Section 3.02 (the address of which shall be set forth in such notice) and (B) no interest shall accrue on such Note after such Payment Date.

A copy of such form of notice shall be sent to the Note Insurer by the Indenture Trustee.

Notices in connection with redemptions of Notes shall be mailed to Noteholders in accordance with Section 10.02.

(c)               Subject to the foregoing provisions of this Section, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to unpaid principal and interest that were carried by such other Note.  Any checks mailed pursuant to subsection (a) of this Section 2.08 and returned undelivered shall be held in accordance with Section 3.03.

(d)               Each Payment Date Statement, prepared by the Indenture Trustee based on the Servicer Remittance Report delivered to the Indenture Trustee pursuant to the Servicing Agreement, shall be made available via the Indenture Trustee’s internet website and its fax-on-demand service to the Note Insurer, the Rating Agencies, the Owner Trustee, the Underwriters (as defined in the Insurance Agreement) and each Noteholder as the statement required pursuant to Section 8.06. Noteholders that are unable to use the above distribution options are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk at                    and
indicating such. Neither the Indenture Trustee nor the Paying Agent shall have any responsibility to recalculate, verify or recompute information contained in any such tape, electronic data file or disk or any such Servicer Remittance Report except to the extent necessary to satisfy all obligations under this Section 2.08(d) and under Article III of the Servicing Agreement.

Within 90 days after the end of each calendar year, the Indenture Trustee will be required to furnish to each person who at any time during the calendar year was a Noteholder, if requested in writing by such person, a statement containing the information set forth in subclauses (i) and (ii) in the definition of “Payment Date Statement,” aggregated for such calendar year or the applicable portion thereof during which such person was a Noteholder.  Such obligation will be deemed to have been satisfied to the extent that substantially comparable information is provided pursuant to any requirements of the Code as are from time to time in force.

 

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            Section 2.09.
 	
            Persons Deemed Owner.
 

Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee, any Paying Agent and any other agent of the Issuer, the Note Insurer or the Indenture Trustee may treat the Person in whose name any Note is registered as the owner of such Note (a) on the applicable Record Date for the purpose of receiving payments of the principal of and interest on such Note and (b) on any other date for all other purposes whatsoever, and neither the Issuer, the Indenture Trustee, any Paying Agent nor any other agent of the Issuer, the Note Insurer or the Indenture Trustee shall be affected by notice to the contrary.

	
            Section 2.10.
 	
            Cancellation.
 

All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Note Registrar, be delivered to the Note Registrar and shall be promptly canceled by it.  The Issuer may at any time deliver to the Note Registrar for cancellation any Note previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Note Registrar.  No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture.  All canceled Notes held by the Note Registrar shall be held by the Note Registrar in accordance with its standard retention policy, unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it.

	
            Section 2.11.
 	
            Authentication and Delivery of Notes.
 

The Notes shall be executed by an Authorized Officer of the Owner Trustee on behalf of the Issuer and delivered to the Authenticating Agent for authentication, and thereupon the same shall be authenticated and delivered by the Authenticating Agent, upon Issuer Request and upon receipt by the Authenticating Agent of all of the following:

(a)               An Issuer Order authorizing the execution, authentication and delivery of the Notes and specifying the Final Maturity Date, the principal amount and the Note Interest Rate (or the manner in which such Note Interest Rate is to be determined) of such Notes to be authenticated and delivered.

	
            (b)
 	
            An Issuer Order authorizing the execution and delivery of this Indenture.
 

(c)               One or more Opinions of Counsel addressed to the Authenticating Agent and the Note Insurer or upon which the Authenticating Agent and the Note Insurer is expressly permitted to rely, complying with the requirements of Section 11.01, reasonably satisfactory in form and substance to the Authenticating Agent and the Note Insurer.

In rendering the opinions set forth above, such counsel may rely upon officer’s certificates of the Issuer, the Owner Trustee, the Servicer and the Indenture Trustee, without independent confirmation or verification with respect to factual matters relevant to such opinions.  In rendering the opinions set forth above, such counsel need express no opinion as to (A) the existence of, or the priority of the security interest created by the Indenture against, any liens or other interests that arise by operation of law and that do not require any filing or similar 

 

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action in order to take priority over a perfected security interest or (B) the priority of the security interest created by this Indenture with respect to any claim or lien in favor of the United States or any agency or instrumentality thereof (including federal tax liens and liens arising under Title IV of the Employee Retirement Income Security Act of 1974).

The acceptability to the Note Insurer of the Opinion of Counsel delivered to the Indenture Trustee and the Note Insurer at the Closing Date shall be conclusively evidenced by the delivery on the Closing Date of the Insurance Policy.

(d)               Pursuant to the authorization of the Depositor, an Officers’ Certificate of the Issuer complying with the requirements of Section 11.01 and stating that:

(i)                the Issuer is not in Default under this Indenture and the issuance of the Notes will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, the Issuer’s Certificate of Trust or any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which the Issuer is a party or by which it may be bound or to which it may be subject, and that all conditions precedent provided in this Indenture relating to the authentication and delivery of the Notes have been complied with;

(ii)               the Issuer is the owner of each Mortgage Loan, free and clear of any lien, security interest or charge, has not assigned any interest or participation in any such Mortgage Loan (or, if any such interest or participation has been assigned, it has been released) and has the right to Grant each such Mortgage Loan to the Indenture Trustee;

(iii)              the information set forth in the Mortgage Loan Schedule attached as Schedule I to this Indenture is correct;

(iv)              the Issuer has Granted to the Indenture Trustee all of its right, title and interest in each Mortgage Loan;

(v)               as of the Closing Date, no lien in favor of the United States described in Section 6321 of the Code, or lien in favor of the Pension Benefit Guaranty Corporation described in Section 4068(a) of the Employee Retirement Income Security Act of 1974, as amended, has been filed as described in subsections 6323(f) and 6323(g) of the Code upon any property belonging to the Issuer; and

(vi)              attached thereto is a true and correct copy of letters signed by each Rating Agency confirming that the Notes have been rated in the highest rating category of such Rating Agency.

	
            (e)
 	
            An executed counterpart of the Servicing Agreement.
 	
             

	
            (f)
 	
            An executed counterpart of the Mortgage Loan Sale Agreement.
 	
             

	
            (g)
 	
            An executed counterpart of the Mortgage Loan Contribution Agreement.
 
				

 

 

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            (h)
 	
            An executed counterpart of the Trust Agreement.
 
	
            Section 2.12.
 	
            Book-Entry Note.
 	
             

				

The Notes will be issued initially as one or more certificates in the name of the Cede & Co., as nominee for the Clearing Agency maintaining book-entry records with respect to ownership and transfer of such Notes, and held by the Clearing Agency or, pursuant to the Clearing Agency’s instructions on behalf of the Clearing Agency, deposited with the Indenture Trustee, and registration of the Notes may not be transferred by the Note Registrar except upon Book-Entry Termination.  In such case, the Note Registrar shall deal with the Clearing Agency as representatives of the Beneficial Owners of such Notes for purposes of exercising the rights of Noteholders hereunder.  Each payment of principal of and interest on a Book-Entry Note shall be paid to the Clearing Agency, which shall credit the amount of such payments to the accounts of its Clearing Agency Participants in accordance with
its normal procedures.  Each Clearing Agency Participant shall be responsible for disbursing such payments to the Beneficial Owners of the Book-Entry Notes 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 Beneficial Owners of the Book-Entry Notes that it represents.  All such credits and disbursements are to be made by the Clearing Agency and the Clearing Agency Participants in accordance with the provisions of the Notes.  None of the Indenture Trustee, the Note Registrar, if any, the Issuer, or any Paying Agent or the Note Insurer shall have any responsibility therefor except as otherwise provided by applicable law.  Requests and directions from, and votes of, such representatives shall not be deemed to be inconsistent if they are made with respect to different Beneficial Owners.

	
            Section 2.13.
 	
            Termination of Book Entry System.
 

(a)               The book-entry system through the Clearing Agency with respect to the Book-Entry Notes may be terminated upon the happening of any of the following:

(i)                The Clearing Agency advises the Indenture Trustee that the Clearing Agency is no longer willing or able to discharge properly its responsibilities as nominee and depositary with respect to the Notes and the Indenture Trustee is unable to locate a qualified successor clearing agency satisfactory to the Issuer;

(ii)               The Issuer, in its sole discretion, elects to terminate the book-entry system by notice to the Clearing Agency and the Indenture Trustee; or

(iii)              After the occurrence of an Event of Default (at which time the Indenture Trustee shall use all reasonable efforts to promptly notify each Beneficial Owner through the Clearing Agency of such Event of Default), the Beneficial Owners of no less than 51% of the Note Balance of the Book-Entry Notes advise the Indenture Trustee in writing, through the related Clearing Agency Participants and the Clearing Agency, that the continuation of a book-entry system through the Clearing Agency to the exclusion of any Definitive Notes being issued to any person other than the Clearing Agency or its nominee is no longer in the best interests of the Beneficial Owners.

 

 

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(b)        Upon the occurrence of any event described in subsection (a) above, the Indenture Trustee shall use all reasonable efforts to notify all Beneficial Owners, through the Clearing Agency, of the occurrence of such event and of the availability of Definitive Notes to Beneficial Owners requesting the same, in an aggregate Current Note Balance representing the interest of each, making such adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous calls for redemption.  Definitive Notes shall be issued only upon surrender to the Indenture Trustee of the global Note by the Clearing Agency, accompanied by registration instructions for the Definitive Notes.  Neither the Issuer nor the Indenture 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 issuance of the Definitive Notes, all references herein to obligations imposed upon or to be performed by the Clearing Agency shall cease to be applicable and the provisions relating to Definitive Notes shall be applicable.

ARTICLE III

 

COVENANTS

	
            Section 3.01.
 	
            Payment of Notes.
 

The Issuer will pay or cause to be duly and punctually paid the principal of, and interest on, the Notes in accordance with the terms of the Notes and this Indenture.  The Notes shall be non-recourse obligations of the Issuer and shall be limited in right of payment to amounts available from the Trust Estate as provided in this Indenture and the Issuer shall not otherwise be liable for payments on the Notes.  No person shall be personally liable for any amounts payable under the Notes.  If any other provision of this Indenture conflicts or is deemed to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control.

	
            Section 3.02.
 	
            Maintenance of Office or Agency.
 

The Issuer will cause the Note Registrar to maintain its corporate trust office at a location where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.

The Issuer may also from time to time at its own expense designate one or more other offices or agencies within the United States of America where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, any designation of an office or agency for payment of Notes shall be subject to Section 3.03.  The Issuer will give prompt written notice to the Indenture Trustee and the Note Insurer of any such designation or rescission and of any change in the location of any such other office or agency.

	
            Section 3.03.
 	
            Money for Note Payments to Be Held In Trust.
 

All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Note Account pursuant to Section 8.02(c) or Section 5.07 shall be made on behalf of the Issuer by the Paying Agent, and no amounts so withdrawn from the Note Account for payments of Notes shall be paid over to the Issuer under any circumstances except as provided in this Section 3.03 or in Section 5.07 or Section 8.02.

 

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With respect to Definitive Notes, if the Issuer shall have a Paying Agent that is not also the Note Registrar, such Note Registrar shall furnish, no later than the fifth calendar day after each Record Date, a list, in such form as such Paying Agent may reasonably require, of the names and addresses of the Holders of Notes and of the number of Individual Notes held by each such Holder.

Whenever the Issuer shall have a Paying Agent other than the Indenture Trustee, it will, on or before the Business Day next preceding each Payment Date direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such purpose in the Note Account), such sum to be held in trust for the benefit of the Persons entitled thereto.  Any moneys deposited with a Paying Agent in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall, upon Issuer Order, be paid over by such Paying Agent to the Indenture Trustee for application in accordance with Article VIII.

Subject to the prior consent of the Note Insurer, any Paying Agent other than the Indenture Trustee may be appointed by Issuer Order and at the expense of the Issuer.  The Issuer shall not appoint any Paying Agent (other than the Indenture Trustee) that is not, at the time of such appointment, a depository institution or trust company whose obligations would be Permitted Investments pursuant to clause (c) of the definition of the term Permitted Investments.  The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

(1)               allocate all sums received for payment to the Holders of Notes on each Payment Date among such Holders in the proportion specified in the applicable Payment Date Statement, in each case to the extent permitted by applicable law;

(2)               hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(3)               if such Paying Agent is not the Indenture Trustee, immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of the Notes if at any time the Paying Agent ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment;

(4)               if such Paying Agent is not the Indenture Trustee, give the Indenture Trustee notice of any Default by the Issuer (or any other obligor upon the Notes) in the making of any payment required to be made with respect to any Notes for which it is acting as Paying Agent;

(5)               if such Paying Agent is not the Indenture Trustee, at any time during the continuance of any such Default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; and

 

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(6)               comply with all requirements of the Code, and all regulations thereunder, with respect to withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; provided, however, that with respect to withholding and reporting requirements applicable to original issue discount (if any) on any of the Notes, the Issuer has provided the calculations pertaining thereto to the Indenture Trustee and the Paying Agent.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or any other purpose, by Issuer Order direct any Paying Agent, if other than the Indenture Trustee, to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two and one-half years after such amount has become due and payable to the Holder of such Note (or if earlier, three months before the date on which such amount would escheat to a governmental entity under applicable law) shall be discharged from such trust and paid to the Issuer; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease.  The Indenture Trustee may adopt and employ, at the expense of the Issuer, any reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or any Agent, at the last address of record for each such Holder).

	
            Section 3.04.
 	
            Existence of Issuer.
 

(a)               Subject to Sections 3.04(b) and (c) and Section 6.2(a)(ii) of the Deposit Trust Agreement, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware or under the laws of any other state or the United States of America, and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Servicing Agreement, the Insurance Agreement and the Mortgage Loan Contribution Agreement.

(b)               Subject to Section 3.09(vii), the prior written consent of the Note Insurer, and written notice to the Rating Agencies, any entity into which the Issuer may be merged or with which it may be consolidated, or any entity resulting from any merger or consolidation to which the Issuer shall be a party, shall be the successor Issuer under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto, anything in any agreement relating to such merger or consolidation, by which any such Issuer may seek to retain certain powers, rights and privileges therefore obtaining for any period 

 

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of time following such merger or consolidation to the contrary notwithstanding (other than Section 3.09(vii)).

(c)               Upon any consolidation or merger of or other succession to the Issuer in accordance with this Section 3.04, the Person formed by or surviving such consolidation or merger (if other than the Issuer) may exercise every right and power of, and shall have all of the obligations of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

	
            Section 3.05.
 	
            Protection of Trust Estate.
 

(a)               The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action as may be necessary or advisable to:

	
            (i)
 	
            Grant more effectively all or any portion of the Trust Estate;
 

(ii)               maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof;

(iii)              perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iv)              enforce any of the Mortgage Loans, the Servicing Agreement, the Mortgage Loan Sale Agreement or the Mortgage Loan Contribution Agreement; or

(v)               preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, and of the Noteholders, in the Mortgage Loans and the other property held as part of the Trust Estate against the claims of all Persons and parties.

(b)               The Indenture Trustee shall not remove any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held, or to which it is intended to be removed, as described in the Opinion of Counsel delivered at the Closing Date pursuant to Section 2.1l(c), or cause or permit ownership or the pledge of any portion of the Trust Estate that consists of book-entry securities to be recorded on the books of a Person located in a different jurisdiction from the jurisdiction in which such ownership or pledge was recorded at such time unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this
Indenture with respect to such property will continue to be maintained after giving effect to such action or actions.

	
            Section 3.06.
 	
            Annual Opinions as to Collateral.
 

On or before December 31st in each calendar year, beginning in 200 , the Issuer shall furnish to the Indenture Trustee and the Note Insurer an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other 

 

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requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until December 31st of the following calendar year.

	
            Section 3.07.
 	
            Performance of Obligations; Servicing Agreement.
 

(a)               The Issuer shall punctually perform and observe all of its obligations under this Indenture and the Servicing Agreement.

(b)               The Issuer shall not take any action and will use its Best Efforts not to permit any action to be taken by others that would release any Person from any of such Person’s covenants or obligations under any of the Mortgage Files or under any instrument included in the Trust Estate, or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any of the documents or instruments contained in the Mortgage Files, except as expressly permitted in this Indenture, the Servicing Agreement or such document included in the Mortgage File or other instrument or unless such action will not adversely affect the interests of the Holders of the Notes.

(c)               If the Issuer shall have knowledge of the occurrence of a default under the Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee, the Note Insurer and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default.

(d)               Upon any termination of the Servicer’s rights and powers pursuant to the Servicing Agreement, the Indenture Trustee shall promptly notify the Rating Agencies.  As soon as any successor Servicer is appointed, the Indenture Trustee shall notify the Rating Agencies, specifying in such notice the name and address of such successor Servicer.

	
            Section 3.08.
 	
            Investment Company Act.
 

The Issuer shall at all times conduct its operations so as not to be subject to, or shall comply with, the requirements of the Investment Company Act of 1940, as amended (or any successor statute), and the rules and regulations thereunder.

	
            Section 3.09.
 	
            Negative Covenants.
 

The Issuer shall not:

(i)                sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate except as expressly permitted by this Indenture or the Servicing Agreement;

 

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(ii)               claim any credit on, or make any deduction from, the principal of, or interest on, any of the Notes by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate;

(iii)              engage in any business or activity other than as permitted by the Trust Agreement or other than in connection with, or relating to, the issuance of the Notes pursuant to this Indenture or amend the Trust Agreement, as in effect on the Closing Date, other than in accordance with Section 11.01;

(iv)              incur, issue, assume or otherwise become liable for a indebtedness other than the Notes;

(v)               incur, assume, guaranty or agree to indemnify any Person with respect to any indebtedness of any Person, except for such indebtedness as may be incurred by the Issuer in connection with the issuance of the Notes pursuant to this Indenture;

	
            (vi)
 	
            dissolve or liquidate in whole or in part (until the Notes are paid in full);
 

(vii)             (1) permit the validity or effectiveness of this Indenture or any Grant to be impaired, or permit the lien of this Indenture to be impaired, amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this Indenture, except as may be expressly permitted hereby, (2) permit any lien, charge, security interest, mortgage or other encumbrance (other than the lien of this Indenture or any Permitted Encumbrance) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof, or (3) permit the lien of this Indenture not to constitute a valid perfected first priority security interest in the Trust Estate; or

(viii)            take any other action that should reasonably be expected to, or fail to take any action if such failure should reasonably be expected to, cause the Issuer to be taxable as (a) an association pursuant to Section 7701 of the Code or (b) a taxable mortgage pool pursuant to Section 7701(i) of the Code.

	
            Section 3.10.
 	
            Annual Statement as to Compliance.
 

On or before December 31, 200 , and each December 31 thereafter and upon receipt of instruction pursuant to the terms of the Management Agreement, the Issuer shall deliver to the Indenture Trustee, the Note Insurer, the Rating Agencies and the Underwriters a written statement prepared by the manager pursuant to the terms of the Management Agreement, signed by an Authorized Officer of the Owner Trustee, stating that:

(1)               a review of the fulfillment by the Issuer during such year of its obligations under this Indenture has been made under such Authorized Officer’s supervision; and

(2)               to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a Default in the fulfillment of any such covenant or 

 

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condition, specifying each such Default known to such Authorized Officer and the nature and status thereof.

	
            Section 3.11.
 	
            Restricted Payments.
 

The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under this Indenture, the Servicing Agreement or the Trust Agreement and the Issuer will not, directly or indirectly, make or cause to be made payments to or distributions from either Note Account except in accordance with this Indenture.

	
            Section 3.12.
 	
            Treatment of Notes as Debt for Tax Purposes.
 

The Issuer shall treat the Notes as indebtedness for all federal and state tax purposes.

	
            Section 3.13.
 	
            Notice of Events of Default.
 

The Issuer shall give the Indenture Trustee, the Note Insurer, the Rating Agencies and the Underwriters prompt written notice of each Event of Default hereunder, each default on the part of the Servicer of its obligations under the Servicing Agreement and each default on the part of the Seller of its obligations under the Mortgage Loan Sale Agreement.

	
            Section 3.14.
 	
            Further Instruments and Acts.
 

Upon request of the Indenture Trustee or the Note Insurer, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

ARTICLE IV

 

SATISFACTION AND DISCHARGE

	
            Section 4.01.
 	
            Satisfaction and Discharge of Indenture.
 

Whenever the following conditions shall have been satisfied:

	
            (1)          either
 	
            
 

(A)              all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.07, and (ii) Notes for whose payment money has 

 

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theretofore been deposited in trust and thereafter repaid to the Issuer, as provided in Section 3.03) have been delivered to the Note Registrar for cancellation; or

(B)              all Notes not theretofore delivered to the Note Registrar for cancellation

(i)               have become due and payable, or

(ii)               will become due and payable at the Final Maturity Date within one year, or

(iii)              are to be called for redemption within one year under irrevocable arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer or the Servicer,

and the Issuer or the Servicer, in the case of clauses (B)(i), (B)(ii) or (B)(iii) above, has irrevocably deposited or caused to be deposited with the Indenture Trustee, in trust for such purpose, an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation, for principal and interest to the Final Maturity Date or to the applicable Redemption Date, as the case may be, and in the case of Notes that were not paid at the Final Maturity Date of their entire unpaid principal amount, for all overdue principal and all interest payable on such Notes to the next succeeding Payment Date therefor;

(2)               the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer (including, without limitation, amounts due the Note Insurer hereunder); and

(3)               the Issuer has delivered to the Indenture Trustee and the Note Insurer an Officers’ Certificate and an Opinion of Counsel satisfactory in form and substance to the Indenture Trustee and the Note Insurer each stating that all conditions precedent herein providing for the satisfaction and discharge of this Indenture have been complied with;

then, upon Issuer Request, this Indenture and the lien, rights and interests created hereby and thereby shall cease to be of further effect, and the Indenture Trustee and each co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of the Issuer (or of the Servicer in the case of a redemption by the Servicer), execute and deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge of this Indenture and shall pay, or assign or transfer and deliver, to the Issuer or upon Issuer Order all cash, securities and other property held by it as part of the Trust Estate remaining after satisfaction of the conditions set forth in clauses (1) and (2) above.

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Indenture Trustee and the Paying Agent to the Issuer and the Holders of Notes under Section 3.03, the obligations of the Indenture Trustee to the Holders of Notes under Section 4.02 

 

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and the provisions of Section 2.07 with respect to lost, stolen, destroyed or mutilated Notes, registration of transfers of Notes and rights to receive payments of principal of and interest on the Notes shall survive.

	
            Section 4.02.
 	
            Application of Trust Money.
 

All money deposited with the Indenture Trustee pursuant to Sections 3.03 and 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Indenture Trustee.

ARTICLE V

 

DEFAULTS AND REMEDIES

	
            Section 5.01.
 	
            Event of Default.
 

“Event of Default”, wherever used herein, means, with respect to Notes issued hereunder, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1)               if the Issuer shall default in the payment on any Payment Date of any Required Payment Amount or fail to pay the Notes in full on or before the Final Maturity Date (and in the case of any such default, such default or failure shall continue for a period of 5 days unremedied);

(2)               if the Issuer shall breach or default in the due observance of any one or more of the covenants set forth in clauses (i) through (viii) of Section 3.09;

(3)               if the Issuer shall breach, or default in the due observance or performance of, any other of its covenants in this Indenture, and such Default shall continue for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer and the Note Insurer by the Indenture Trustee at the direction of the Note Insurer, or to the Issuer and the Indenture Trustee by the Holders of Notes representing at least 25% of the Note Balance of the Outstanding Notes, with the prior written consent of the Note Insurer, a written notice specifying such Default and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

(4)               if any representation or warranty of the Issuer made in this Indenture or any certificate or other writing, delivered by the Issuer pursuant hereto or in connection herewith shall prove to be incorrect in any material respect as of the time when the same shall have been made and, within 30 days after there shall have been given, by registered or certified mail, written notice thereof to the Issuer and the Note Insurer by the Indenture Trustee at the direction of the Note Insurer, or to the Issuer and the Indenture Trustee by the Holders of Notes representing at least 25% of the Note Balance of the Outstanding 

 

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Notes, with the prior written consent of the Note Insurer, the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured; provided, however, that in the event that there exists a remedy with respect to any such breach that consists of a purchase obligation, repurchase obligation or right to substitute under the Basic Documents, then such purchase obligation, repurchase obligation or right to substitute shall be the sole remedy with respect to such breach and shall not constitute an Event of Default hereunder;

(5)               the entry of a decree or order for relief by a court having jurisdiction in respect of the Issuer in an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; 

(6)               the commencement by the Issuer of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or any other present or future federal or state bankruptcy, insolvency or similar law, or the consent by the Issuer to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or of any substantial part of its property or the making by the Issuer of an assignment for the benefit of creditors or the failure by the Issuer generally to pay its debts as such debts become due or the taking of corporate action by the Issuer in furtherance of any of the foregoing; or

	
            (7)
 	
            the occurrence of an “event of default” under the Insurance Agreement.
 

The payment by the Note Insurer of any Insured Payment in an amount sufficient to cover the related Required Payment Amount pursuant to the Insurance Policy in respect of any Payment Date shall, at the option of the Note Insurer, constitute an Event of Default with respect to the Notes.

	
            Section 5.02.
 	
            Acceleration of Maturity; Rescission and Annulment.
 

If an Event of Default occurs and is continuing, then and in every such case, but in each case only with the consent of the Note Insurer in the absence of a Note Insurer Default, the Indenture Trustee  may, and on request of the Holders of Notes representing not less than 50% of the Note Balance of the Outstanding Notes, shall, declare all the Notes to be immediately due and payable by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such declaration such Notes, in an amount equal to the Note Balance of such Notes, together with accrued and unpaid interest thereon to the date of such acceleration, shall become immediately due and payable, all subject to the prior written consent of the Note Insurer in the absence of a Note Insurer Default.

At any time after such a declaration of acceleration of maturity of the Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article provided the Note Insurer or the Holders of Notes 

 

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representing more than 50% of the Note Balance of the Outstanding Notes, with the prior written consent of the Note Insurer, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

(1)               the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

(A)              all payments of principal of, and interest on, all Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and

(B)              all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel; and

(2)               all Events of Default, other than the nonpayment of the principal of Notes that have become due solely by such acceleration, have been cured or waived as provided in Section 5.14.

No such rescission shall affect any subsequent Default or impair any right consequent thereon.

Section 5.03.      Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

Subject to the provisions of Section 3.01 and the following sentence, if an Event of Default occurs and is continuing, the Indenture Trustee shall (at the direction of the Note Insurer) and may, with the prior written consent of the Note Insurer, proceed to protect and enforce its rights and the rights of the Noteholders and the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or enforce any other proper remedy.  Any proceedings brought by the Indenture Trustee on behalf of the Noteholders and the Note Insurer or any Noteholder against the Issuer shall be limited to the preservation, enforcement and foreclosure of the liens, assignments, rights and security interests under the
Indenture and no attachment, execution or other unit or process shall be sought, issued or levied upon any assets, properties or funds of the Issuer, other than the Trust Estate relative to the Notes in respect of which such Event of Default has occurred.  If there is a foreclosure of any such liens, assignments, rights and security interests under this Indenture, by private power of sale or otherwise, no judgment for any deficiency upon the indebtedness represented by the Notes may be sought or obtained by the Indenture Trustee or any Noteholder against the Issuer.  The Indenture Trustee shall be entitled to recover the costs and expenses expended by it pursuant to this Article V including reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel.

	
            Section 5.04.
 	
            Remedies.
 

If an Event of Default shall have occurred and be continuing and the Notes have been declared due and payable and such declaration and its consequences have not been rescinded and 

 

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annulled, the Indenture Trustee, at the direction of the Note Insurer (subject to Section 5.17, to the extent applicable) shall, for the benefit of the Noteholders and the Note Insurer, do one or more of the following:

(a)               institute Proceedings for the collection of all amounts then payable on the Notes, or under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer moneys adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03;

(b)               in accordance with Section 5.17, sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private Sales called and conducted in any manner permitted by law;

(c)               institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

(d)               exercise any remedies of a secured party under the Uniform Commercial Code and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the Holders of the Notes and the Note Insurer hereunder; and

(e)               refrain from selling the Trust Estate and apply all Remittable Funds pursuant to Section 5.07.

	
            Section 5.05.
 	
            Indenture Trustee May File Proofs of Claim.
 

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, composition or other judicial Proceeding relative to the Issuer or any other obligor upon any of the Notes or the property of the Issuer or of such other obligor or their creditors, the Indenture Trustee (irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand on the Issuer for the payment of any overdue principal or interest) shall, with the prior written consent of the Note Insurer, be entitled and empowered, by intervention in such Proceeding or otherwise to:

(i)                file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Notes and file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel) and of the Noteholders and the Note Insurer allowed in such Proceeding, and

(ii)               collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar official) in any such Proceeding is hereby authorized by each Noteholder and the Note Insurer to make such payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of such payments directly to the Noteholders and the Note Insurer, to pay to the Indenture Trustee any 

 

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amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel.

Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder or the Note Insurer any plan of reorganization, arrangement, adjustment or composition affecting any of the Notes or the rights of any Holder thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder or the Note Insurer in any such Proceeding.

	
            Section 5.06.
 	
            Indenture Trustee May Enforce Claims Without Possession of Notes.
 

All rights of action and claims under this Indenture or any of the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Indenture Trustee, at the direction of the Note Insurer, shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the Holders of the Notes and the Note Insurer in respect of which such judgment has been recovered after payment of amounts required to be paid pursuant to clause (i) Section 5.07.

	
            Section 5.07.
 	
            Application of Money Collected.
 

If the Notes have been declared due and payable following an Event of Default and such declaration and its consequences have not been rescinded and annulled, any money collected by the Indenture Trustee pursuant to this Article or otherwise and any other monies that may then be held or thereafter received by the Indenture Trustee as security shall be applied in the following order, at the date or dates fixed by the Indenture Trustee and, in case of the payment of the entire amount due on account of principal of, and interest on, the Notes, upon presentation and surrender thereof:

(i)                to the Servicer and Indenture Trustee, the unpaid Monthly Servicing Fee and Indenture Trustee’s Fee due under this Indenture;

(ii)               to the Servicer any Monthly Advances and Servicing Advances previously made that are reimbursable to the Servicer (other than those included in liquidation expenses for any Liquidated Mortgage Loan and reimbursed from the related Liquidation Proceeds and from Insurance Proceeds) under the Servicing Agreement;

(iii)              to the PMI Insurer, the amount owing to the PMI Insurer for the premium payable in respect of the PMI Mortgage Loans;

(iv)              to the Note Insurer, the Note Insurer Premium due under the Insurance Agreement;

	
            (v)
 	
            to the Noteholders, the Note Interest due under this Indenture;
 

(vi)              to the Noteholders, the amount of Monthly Principal for the Notes with respect to such date, in reduction of the Note Balance until the Note Balance is reduced to zero;

 

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(vii)             to the Note Insurer, the amount owing to the Note Insurer under the Insurance Agreement for reimbursement for prior draws made on the Insurance Policy in respect of the Notes and any other amounts owing to the Note Insurer under the Insurance Agreement (including any unpaid Note Insurer Premium in respect of the Notes);

(viii)            to the Noteholders, the Overcollateralization Deficiency Amount, if any, due under this Indenture; 

(ix)              to the Indenture Trustee pursuant to the terms of the Servicing Agreement, Transition Expenses in excess of $50,000, if any, and other costs and expenses, if not paid by the Servicer pursuant to the Servicing Agreement or the Custodial Agreement; and

(x)               to the payment of the Note Balance of the Outstanding Notes, up to the amount of their Current Note Balances, without preference or priority of any kind;

	
            Section 5.08.
 	
            Limitation on Suits.
 

No Holder of a Note shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(1)               such Holder has previously given written notice to the Indenture Trustee and the Note Insurer of a continuing Event of Default;

(2)               the Holders of Notes representing not less than 25% of the Note Balance of the Outstanding Notes shall have made written request to the Indenture Trustee to institute Proceedings in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(3)               such Holder or Holders have offered to the Indenture Trustee indemnity in full against the costs, expenses and liabilities to be incurred in compliance with such request;

(4)               the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such Proceeding;

(5)               no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes; and

(6)               the consent of the Note Insurer shall have been obtained; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Notes.

 

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In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than 50% of the Note Balances of the Outstanding Notes, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken notwithstanding any other provision herein to the contrary.

Section 5.09.      Unconditional Rights of Noteholders to Receive Principal and Interest.

Subject to the provisions in this Indenture (including Sections 3.01 and 5.03) limiting the right to recover amounts due on a Note to recovery from amounts in the Trust Estate, the Holder of any Note shall have the right, to the extent permitted by applicable law, which right is absolute and unconditional, to receive payment of each installment of interest on such Note on the respective Payment Date for such installments of interest, to receive payment of each installment of principal of such Note when due (or, in the case of any Note called for redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

	
            Section 5.10.
 	
            Restoration of Rights and Remedies.
 

If the Indenture Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Indenture Trustee, the Note Insurer or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee, the Note Insurer and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall continue as though no such Proceeding had been instituted.

	
            Section 5.11.
 	
            Rights and Remedies Cumulative.
 

No right or remedy herein conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

	
            Section 5.12.
 	
            Delay or Omission Not Waiver.
 

No delay or omission of the Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders with the prior consent of the Note Insurer, as the case may be.

 

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            Section 5.13.
 	
            Control by Noteholders.
 

The Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes on the applicable Record Date shall, with the consent of the Note Insurer, have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or power conferred on the Indenture Trustee; provided that:

(1)               such direction shall not be in conflict with any rule of law or with this Indenture;

(2)               any direction to the Indenture Trustee to undertake a Sale of the Trust Estate shall be by the Holders of Notes representing the percentage of the Note Balance of the Outstanding Notes specified in Section 5.17(b)(1), unless Section 5.17(b)(2) is applicable; and

(3)               the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction; provided, however, that, subject to Section 6.01, the Indenture Trustee need not take any action that it determines might involve it in liability or be unjustly prejudicial to the Noteholders not consenting.

	
            Section 5.14.
 	
            Waiver of Past Defaults.
 

The Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes on the applicable Record Date may on behalf of the Holders of all the Notes, and with the consent of the Note Insurer, waive any past Default hereunder and its consequences, except a Default:

	
            (1)
 	
            in the payment of principal or any installment of interest on any Note; or
 

(2)               in respect of a covenant or provision hereof that under Section 9.02 cannot be modified or amended without the consent of the Holder of each Outstanding Note affected.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

	
            Section 5.15.
 	
            Undertaking for Costs.
 

All parties to this Indenture agree, and each Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit 

 

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instituted by the Indenture Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate Notes representing more than 10% of the Note Balance of the Outstanding Notes, or to any suit instituted by any Noteholder for the enforcement of the payment of any Required Payment Amount on any Note on or after the related Payment Date or for the enforcement of the payment of principal of any Note on or after the Final Maturity Date (or, in the case of any Note called for redemption, on or after the applicable Redemption Date).

	
            Section 5.16.
 	
            Waiver of Stay or Extension Laws.
 

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension of law wherever enacted, now or at any time hereafter in force, that may affect the covenants in, or the performance of, this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

	
            Section 5.17.
 	
            Sale of Trust Estate.
 

(a)               The power to effect any sale (a “Sale”) of any portion of the Trust Estate pursuant to Section 5.04 shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the Notes and under this Indenture with respect thereto shall have been paid.  The Indenture Trustee may from time to time postpone any public Sale by public announcement made at the time and place of such Sale.

(b)               To the extent permitted by law, the Indenture Trustee shall not (unless directed by the Note Insurer) in any private Sale sell or otherwise dispose of the Trust Estate, or any portion thereof, unless:

(1)               the Holders of Notes representing not less than 50% of the Note Balance of the Notes then Outstanding consent to or direct the Indenture Trustee to make such Sale; or

(2)               the proceeds of such Sale would be not less than the entire amount that would be payable to the Holders of the Notes, in full payment thereof in accordance with Section 5.07, on the Payment Date next succeeding the date of such Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof for purposes of this Section 5.17(b).  In the absence of a Note Insurer Default, no sale hereunder shall be effective without the consent of the Note Insurer.

(c)               Unless the Holders of all Outstanding Notes have otherwise consented or directed the Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the amount described in paragraph (2) of subsection (b) of this Section 5.17 has not been established by the Indenture Trustee and no Person bids an amount 

 

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equal to or greater than such amount, the Indenture Trustee, acting in its capacity as Indenture Trustee on behalf of the Noteholders, shall prevent such sale and bid an amount (which shall include the Indenture Trustee’s right, in its capacity as Indenture Trustee, to credit bid) at least $1.00 more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders.

	
            (d)
 	
            In connection with a Sale of all or any portion of the Trust Estate:
 

(1)               any Holder or Holders of Notes may bid for and purchase the property offered for Sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Outstanding Notes or claims for interest thereon in lieu of cash up to the amount that shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after being appropriately stamped to show such partial payment;

(2)               the Indenture Trustee may bid for and acquire the property offered for Sale in connection with any public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting the gross Sale price against the sum of (A) the amount that would be payable to the Holders of the Notes as a result of such Sale in accordance with Section 5.07 on the Payment Date next succeeding the date of such Sale and (B) the expenses of the Sale and of any Proceedings in connection therewith which are reimbursable to it, without being required to produce the Notes in order to complete any such Sale or in order for the net Sale price to be credited against such Notes, and any property so acquired by the Indenture
Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture;

(3)               the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale thereof,

(4)               the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect such Sale; and

(5)               no purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

	
            Section 5.18.
 	
            Action on Notes.
 

The Indenture Trustee’s right to seek and recover judgment under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee, the Note Insurer or the Holders of Notes shall be impaired by the recovery of any 

 

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judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate.

	
            Section 5.19.
 	
            No Recourse to Other Trust Estates or Other Assets of the Issuer.
 

The Trust Estate Granted to the Indenture Trustee as security for the Notes serves as security only for the Notes.  Holders of the Notes shall have no recourse against the trust estate granted as security for any other series of Notes issued by the Issuer, and no judgment against the Issuer for any amount due with respect to the Notes may be enforced against either the trust estate securing any other series or any other assets of the Issuer, nor may any prejudgment lien or other attachment be sought against any such other trust estate or any other assets of the Issuer.

	
            Section 5.20.
 	
            Application of the Trust Indenture Act.
 

Pursuant to Section 316(a) of the TIA, all provisions automatically provided for in Section 316(a) are hereby expressly excluded.

ARTICLE VI

 

THE INDENTURE TRUSTEE

	
            Section 6.01.
 	
            Duties of Indenture Trustee.
 

(a)               If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

	
            (b)
 	
            Except during the continuance of an Event of Default:
 

(1)               The Indenture Trustee need perform only those duties that are specifically set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

(2)               In the absence of bad faith on its part, the Indenture Trustee may request and conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture.  The Indenture Trustee shall, however, examine such certificates and opinions to determine whether they conform on their face to the requirements of this Indenture.

(c)               The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(1)               This paragraph does not limit the effect of subsection (b) of this Section 6.01;

 

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(2)               The Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

(3)               The Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.13 or 5.17 or exercising any trust or power conferred upon the Indenture Trustee under this Indenture.

(d)               Except with respect to duties of the Indenture Trustee prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes under this Indenture, the Indenture Trustee shall not be deemed to have notice or knowledge of any Event of Default described in Section 5.01(2), 5.01(5) or 5.01(6) or any Default described in Section 5.01(3) or 5.01(4) or of any event described in Section 3.05 unless a Responsible Officer assigned to and working in the Indenture Trustee’s corporate trust department has actual knowledge thereof or unless written notice of any event that is in fact such an Event of Default or Default is received by the Indenture Trustee at the Corporate Trust Office, and such notice references the Notes
generally, the Issuer, the Trust Estate or this Indenture.

(e)               No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it under the Servicing Agreement or otherwise.

(f)                Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to the provisions of this Section.

(g)               Notwithstanding any extinguishment of all right, title and interest of the Issuer in and to the Trust Estate following an Event of Default and a consequent declaration of acceleration of the Maturity of the Notes, whether such extinguishment occurs through a Sale of the Trust Estate to another Person, the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the rights, powers and duties of the Indenture Trustee with respect to the Trust Estate (or the proceeds thereof) and the Noteholders and the Note Insurer and the rights of Noteholders and the Note Insurer shall continue to be governed by the terms of this Indenture.

(h)               The Indenture Trustee or any Custodian appointed pursuant to Section 8.13 shall at all times retain possession of the Mortgage Files in the State of                or the State of                   , except for those Mortgage Files or portions thereof released to the Servicer or the Note Insurer pursuant to this Indenture or the Servicing Agreement.

	
            Section 6.02.
 	
            Notice of Default.
 

Immediately after the occurrence of any Default known to the Indenture Trustee, the Indenture Trustee shall transmit by mail to the Note Insurer and the Underwriters notice of each such Default and, within 90 days after the occurrence of any Default known to the Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders of Notes notice of each such Default, unless such Default shall have been cured or waived; provided, however, that in no 

 

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event shall the Indenture Trustee provide notice, or fail to provide notice of a Default known to the Indenture Trustee in a manner contrary to the requirements of the Trust Indenture Act.  Concurrently with the mailing of any such notice to the Holders of the Notes, the Indenture Trustee shall transmit by mail a copy of such notice to the Rating Agencies.

	
            Section 6.03.
 	
            Rights of Indenture Trustee.
 

(a)        Except as otherwise provided in Section 6.01, the Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Indenture Trustee need not investigate any fact or matter stated in any such document.

(b)        Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on any such Officer’s Certificate or Opinion of Counsel.

(c)        With the consent of the Note Insurer, which consent shall not be unreasonably withheld, the Indenture Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d)        The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers.

	
            Section 6.04.
 	
            Not Responsible for Recitals or Issuance of Notes.
 

The recitals contained herein and in the Notes, except the certificates of authentication on the Notes, shall be taken as the statements of the Issuer, and the Indenture Trustee and the Authenticating Agent assume no responsibility for their correctness.  The Indenture Trustee makes no representations with respect to the Trust Estate or as to the validity or sufficiency of this Indenture or of the Notes.  The Indenture Trustee shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof or any money paid to the Issuer or upon Issuer Order pursuant to the provisions hereof.

	
            Section 6.05.
 	
            May Hold Notes.
 

The Indenture Trustee, any Agent, or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 6.07 and 6.13, may otherwise deal with the Issuer or any Affiliate of the Issuer with the same rights it would have if it were not Indenture Trustee, Agent or such other agent.

	
            Section 6.06.
 	
            Money Held in Trust.
 

Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds except to the extent required by this Indenture or by law.  The Indenture Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Issuer and except to the extent of income or other gain on investments that are 

 

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obligations of the Indenture Trustee, in its commercial capacity, and income or other gain actually received by the Indenture Trustee on investments, which are obligations of others.

	
            Section 6.07.
 	
            Eligibility, Disqualification.
 

Irrespective of whether this Indenture is qualified under the TIA, this Indenture shall always have a Indenture Trustee who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5).  The Indenture Trustee shall always have a combined capital and surplus as stated in Section 6.08.  The Indenture Trustee shall be subject to TIA Section 310(b).

	
            Section 6.08.
 	
            Indenture Trustee’s Capital and Surplus.
 

The Indenture Trustee shall at all times have a combined capital and surplus of at least $50,000,000 or shall be a member of a bank holding company system, the aggregate combined capital and surplus of which is at least $100,000,000 and shall at all times be rated “   ” or better by [Rating Agency] and “   ” or better by [Rating Agency]; provided, however, that the Indenture Trustee’s separate capital and surplus shall at all times be at least the amount required by TIA Section 310(a)(2).  If the Indenture Trustee publishes annual reports of condition of the type described in TIA Section 310(a)(1), its combined capital and surplus for purposes of this Section 6.08 shall be as set forth in the latest such report.  If at any
time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

	
            Section 6.09.
 	
            Resignation and Removal; Appointment of Successor.
 

(a)               No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Indenture Trustee under Section 6.10.

(b)               The Indenture Trustee may resign at any time by giving written notice thereof to the Issuer, the Note Insurer and each Rating Agency, in which event the Issuer will, with the consent of the Note Insurer (and if the Issuer fails to do so within 30 days, the Note Issuer may) appoint a successor Indenture Trustee.  If an instrument of acceptance by a successor Indenture Trustee shall not have been delivered to the Indenture Trustee within 30 days after the giving of such notice of resignation, the resigning Indenture Trustee may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

(c)               The Indenture Trustee may be removed at any time by the Note Insurer or, with the consent of the Note Insurer, by Act of the Holders representing at least 51% of the Note Balance of the Outstanding Notes, by written notice delivered to the Indenture Trustee and to the Issuer.

	
            (d)          If at any time:
 	
            
 

(1)               the Indenture Trustee shall have a conflicting interest prohibited by Section 6.07 and shall fail to resign or eliminate such conflicting interest in accordance with Section 6.07 after written request therefor by the Issuer or by any Noteholder; or

 

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(2)               the Indenture Trustee shall cease to be eligible under Section 6.08 or shall become incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, (i) the Issuer by an Issuer Order, with the consent of the Note Insurer, may remove the Indenture Trustee, and the Issuer shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a successor Indenture Trustee acceptable to the Note Insurer and to vest in such successor Indenture Trustee any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Indenture; provided, however, if the Issuer and the Note Insurer do not join in such appointment within fifteen (15) days after the receipt by it of a request to do so, or in case an Event of Default has occurred and is continuing, the Indenture Trustee may petition a court of competent
jurisdiction to make such appointment, or (ii) subject to Section 5.15, and, in the case of a conflicting interest as described in clause (1) above, unless the Indenture Trustee’s duty to resign has been stayed as provided in TIA Section 310(b), the Note Insurer or any Noteholder who has been a bona fide Holder of a Note for at least six months may, on behalf of himself and all others similarly situated, with the consent of the Note Insurer, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

(e)               If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Indenture Trustee for any cause, the Issuer (and if the Issuer fails to do so within 30 days, the Note Issuer may), by an Issuer Order shall promptly appoint a successor Indenture Trustee acceptable to the Note Insurer.  If within one year after such resignation, removal or incapability or the occurrence of such vacancy a successor Indenture Trustee shall be appointed by the Note Insurer or, with the consent of the Note Insurer, by Act of the Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes delivered to the Issuer and the retiring Indenture Trustee, the successor Indenture Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the successor Indenture Trustee and supersede the successor Indenture Trustee appointed by the Issuer.  If no successor Indenture Trustee shall have been so appointed by the Issuer, the Note Insurer or Noteholders and shall have accepted appointment in the manner hereinafter provided, any Noteholder who has been a bona fide Holder of a Note for at least six months may, on behalf of himself and all others similarly situated, with the consent of the Note Insurer, petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

(f)                The Issuer shall give notice of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee to the Holders of Notes and the Note Insurer.  Each notice shall include the name of the successor Indenture Trustee and the address of its Corporate Trust Office.

	
            Section 6.10.
 	
            Acceptance of Appointment by Successor.
 

Every successor Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer, the Note Insurer and the retiring Indenture Trustee an instrument accepting 

 

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such appointment, and thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Indenture Trustee.  Notwithstanding the foregoing, on request of the Issuer or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, and shall duly assign, transfer and deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder.  Upon request of any such successor Indenture Trustee, the Issuer shall execute and deliver any and all instruments for more fully and certainly
vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts.

No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such successor Indenture Trustee shall be qualified and eligible under this Article.

Section 6.11.       Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee.

Any corporation into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Indenture Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto.  In case any Notes have been authenticated, but not delivered, by the Indenture Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if
such successor Indenture Trustee had authenticated such Notes.

	
            Section 6.12.
 	
            Preferential Collection of Claims Against Issuer.
 

The Indenture Trustee (and any co-trustee or separate trustee) shall be subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 31l(b), and an Indenture Trustee (and any co-trustee or separate trustee) who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

	
            Section 6.13.
 	
            Co-Indenture Trustees and Separate Indenture Trustees.
 

At any time or times, for the purpose of meeting the legal requirements of the TIA or of any jurisdiction in which any of the Trust Estate may at the time be located, the Indenture Trustee shall have power to appoint, and, upon the written request of the Indenture Trustee, of the Note Insurer or of the Holders of Notes representing more than 50% of the Note Balance of the Outstanding Notes with respect to which a co-trustee or separate trustee is being appointed with the consent of the Note Insurer, the Issuer shall for such purpose jointly with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint, one or more Persons approved by the Indenture Trustee either to act as 

 

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co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section.  If the Issuer does not join in such appointment within 15 days after the receipt by it of a request to do so, or in case an Event of Default has occurred and is continuing, the Indenture Trustee alone shall have power to make such appointment.  All fees and expenses of any co-trustee or separate trustee shall be payable by the Issuer.

Should any written instrument from the Issuer be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer.

Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

(1)               The Notes shall be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Indenture Trustee hereunder, shall be exercised, solely by the Indenture Trustee.

(2)               The rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Indenture Trustee or by the Indenture Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee.

(3)               The Indenture Trustee at any time, by an instrument in writing, executed by it, with the concurrence of the Issuer evidenced by an Issuer Order, may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section, and, in case an Event of Default has occurred and is continuing, the Indenture Trustee shall have power to accept the resignation of, or remove, any such co-trustee or separate trustee without the concurrence of the Issuer upon the written request of the Indenture Trustee, the Issuer shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to effectuate such resignation or removal.  A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner provided in this Section.

(4)               No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Indenture Trustee, or any other such trustee hereunder.

 

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(5)               Any Act of Noteholders delivered to the Indenture Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

	
            Section 6.14.
 	
            Authenticating Agents.
 

The Issuer shall appoint an Authenticating Agent with power to act on its behalf and subject to its direction in the authentication and delivery of the Notes designated for such authentication by the Issuer and containing provisions therein for such authentication (or with respect to which the Issuer has made other arrangements, satisfactory to the Indenture Trustee and such Authenticating Agent, for notation on the Notes of the authority of an Authenticating Agent appointed after the initial authentication and delivery of such Notes) in connection with transfers and exchanges under Section 2.06, as fully to all intents and purposes as though the Authenticating Agent had been expressly authorized by that Section to authenticate and deliver Notes.  For all purposes of this Indenture (other than in connection with the authentication and delivery of Notes pursuant to Sections 2.05
and 2.11 in connection with their initial issuance), the authentication and delivery of Notes by the Authenticating Agent pursuant to this Section shall be deemed to be the authentication and delivery of Notes “by the Indenture Trustee.” Such Authenticating Agent shall at all times be a Person that both meets the requirements of Section 6.07 for the Indenture Trustee hereunder and has an office for presentation of Notes in the United States of America.  The Indenture Trustee shall initially be the Authenticating Agent and shall be the Note Registrar as provided in Section 2.06.  The office from which the Indenture Trustee shall perform its duties as Note Registrar and Authenticating Agent shall be the Corporate Trust Office.  Any Authenticating Agent appointed pursuant to the terms of this Section 6.14 or pursuant to the terms of any supplemental indenture shall deliver to the Indenture Trustee as a condition precedent to the effectiveness of such
appointment an instrument accepting the trusts, duties and responsibilities of Authenticating Agent and of Note Registrar or co-Note Registrar and indemnifying the Indenture Trustee for and holding the Indenture Trustee harmless against, any loss, liability or expense (including reasonable attorneys’ fees) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance, administration of the trust or exercise of authority by such Authenticating Agent, Note Registrar or co-Note Registrar.

Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Issuer.  The Issuer may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section, the Issuer shall promptly appoint a successor Authenticating Agent, shall give written notice of such appointment to the Indenture Trustee, and shall mail notice of such appointment to all Holders of Notes.

 

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The Indenture Trustee agrees, subject to Section 6.01(e), to pay to any Authenticating Agent from time to time reasonable compensation for its services and the Indenture Trustee shall be entitled to be reimbursed for such payments pursuant to Section 6.04 of the Servicing Agreement.  The provisions of Sections 2.09, 6.04 and 6.05 shall be applicable to any Authenticating Agent.

	
            Section 6.15.
 	
            Review of Mortgage Files.
 

(a)               Initial Certification.  The Indenture Trustee shall, for the benefit of the Noteholders and the Note Insurer, cause the Custodian to review each Mortgage File prior to the Closing Date to ascertain that all documents required to be included in the Mortgage File are included therein, and shall cause the Custodian to deliver to the Seller, the Representative, the Depositor, the Note Insurer, the Indenture Trustee and the Servicer on the Closing Date an Initial Certification in the form attached as Exhibit E-1 to the Custodial Agreement with respect to each Mortgage Loan to the effect that, except as specifically noted on a schedule of exceptions thereto, (A) all documents required to be contained in the Mortgage File are
in its possession, (B) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan, and (C) based on its examination and only as to the foregoing documents, the information set forth on the related Mortgage Loan Schedule accurately reflects information set forth in the Mortgage File.

It is understood that before making the Initial Certification, the Indenture Trustee shall cause the Custodian to examine the related Mortgage Loan Documents to confirm that:

(1)               each Mortgage Note and Mortgage bears an original signature or signatures purporting to be that of the Person or Persons named as the maker and mortgagor/trustor or, if photocopies are permitted, that such copies bear a reproduction of such signature or signatures;

(2)               except for the endorsement in blank, neither the Mortgage nor any Assignment, on the face or the reverse side(s) thereof, contains evidence of any unsatisfied claims, liens, security interests, encumbrances or restrictions on transfer;

(3)               the principal amount of the indebtedness secured by the related Mortgage is identical to the original principal amount of the related Mortgage Note;

(4)               the Assignment of the related Mortgage from the Seller to the Indenture Trustee is in the form required pursuant to clause (e) of the definition of “Mortgage Loan Documents” in the Mortgage Loan Sale Agreement, and bears an original signature of the Seller and any other necessary party (or signatures purporting to be that of the Seller and any such other party) or, if photocopies are permitted, that such copies bear a reproduction of such signature or signatures;

(5)               if intervening Assignments are included in the Mortgage File, each such intervening Assignment bears an original signature of the related mortgagee and/or the assignee (and any other necessary party) (or signatures purporting to be that of each such party) or, if photocopies are permitted, that such copies bear a reproduction of such signature or signatures;

 

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(6)               if either a title insurance policy, a preliminary title report or a written commitment to issue a title insurance policy is delivered, the address of the real property set forth in such policy, report or written commitment is identical to the real property address contained in the related Mortgage; and

(7)               if any of a title insurance policy, certificate of title insurance or a written commitment to issue a title insurance policy is delivered, such policy, certificate or written commitment is for an amount not less than the original principal amount of the related Mortgage Note and such title insurance policy insures that the related Mortgage creates a first or second lien, senior in priority to all other deeds of trust, mortgages, deeds to secure debt, financing statements and security agreements and to any mechanics’ liens, judgment liens or writs of attachment other than the related senior lien, if applicable, (or if the title insurance policy or certificate of title insurance has not been issued, the written commitment for such
insurance obligates the insurer to issue such policy for an amount not less than the original principal amount of the related Mortgage Note).

(b)               Final Certification.  On or before one year following the Closing Date, the Indenture Trustee shall cause the Custodian to deliver to the Seller, the Representative, the Depositor, the Note Insurer, the Indenture Trustee and the Servicer a Final Certification in the form attached as Exhibit E-2 to the Custodial Agreement evidencing the completeness of the Mortgage File for each Mortgage Loan, except as specifically noted on a schedule of exceptions thereto.

(c)               In giving each of the Initial Certification and the Final Certification, neither the Indenture Trustee nor the Custodian shall be under any duty or obligation (1) to inspect, review or examine any such documents, instruments, securities or other papers to determine that they or the signatures thereto 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 or (2) to determine whether any Mortgage File should include a flood insurance policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement.

(d)               Recordation Report.  In the event that the Mortgage Loans are required to be recorded in accordance with the provisions of the Mortgage Loan Sale Agreement, no later than the fifth Business Day of each third month, commencing in                 200 , the Indenture Trustee shall cause the Custodian to deliver to the Servicer and the Note Insurer a recordation report dated as of the first day of such month, identifying those Mortgage Loans for which it has not yet received (1) an original recorded Mortgage or a copy thereof certified to be true and correct by the public recording office in possession of such Mortgage or (2) an original recorded Assignment of
the Mortgage to the Indenture Trustee and any required intervening Assignments or a copy thereof certified to be a true and correct copy by the public recording office in possession of such Assignment.

	
            Section 6.16.
 	
            Indenture Trustee Fees and Expenses.
 

 

 

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The Indenture Trustee shall be entitled to receive the Indenture Trustee Fee on each Payment Date as provided herein.  The Indenture Trustee also shall be entitled, pursuant to the provisions of Section 6.04 of the Servicing Agreement, to (i) payment of or reimbursement for expenses, disbursements and advances incurred or made by the Indenture Trustee in accordance with any of the provisions of this Agreement (including, but not limited to, the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) as provided in the Servicing Agreement, and (ii) indemnification against losses, liability and expenses, including reasonable attorney’s fees, incurred, arising out of or in connection with this Agreement and the Notes as provided in the Servicing Agreement.

	
            Section 6.17.
 	
            Tax Reporting.
 

The Indenture Trustee shall provide on an annual basis, or as otherwise required by the Owner Trustee, all information relating to payments on the Notes as is reasonably required by the Owner Trustee pursuant to its obligations under Section 2(b)(i) of the Management Agreement and Section 2.11(k) of the Deposit Trust Agreement.

ARTICLE VII

 

NOTEHOLDERS’ LISTS AND REPORTS

Section 7.01.       Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.

(a)               The Issuer shall furnish or cause to be furnished to the Indenture Trustee (i) semiannually, not less than 45 days nor more than 60 days after the Payment Date occurring closest to six months after the Closing Date and each Payment Date occurring at six-month intervals thereafter, all information in the possession or control of the Issuer, in such form as the Indenture Trustee may reasonably require, as to names and addresses of the Holders of Notes, and (ii) at such other times, as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.

(b)               In addition to furnishing to the Indenture Trustee the Noteholder lists, if any, required under subsection (a), the Issuer shall also furnish all Noteholder lists, if any, required under Section 3.03 at the times required by Section 3.03.

	
            Section 7.02.
 	
            Preservation of Information; Communications to Noteholders.
 

(a)               The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list, if any, furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of the Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.

 

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(b)               Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

(c)               The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c).

	
            Section 7.03.
 	
            Reports by Indenture Trustee.
 

(a)               Within 60 days after December 31 of each year (the “reporting date”), commencing with the year after the issuance of the Notes, (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail to all Holders a brief report dated as of such reporting date that complies with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set forth in the Payment Date Statement pursuant to Section 2.08(d), also mail to Holders of Notes and the Note Insurer with respect to which it has made advances, any reports with respect to such advances that are required by TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of Notes and the Note Insurer any reports required by TIA
Section 313(b)(1).  For purposes of the information required to be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the principal amount of indenture securities outstanding on the date as of which such information is provided shall be the Note Balance of the then Outstanding Notes covered by the report.

(b)               A copy of each report required under this Section 7.03 shall, at the time of such transmission to Holders of Notes and the Note Insurer be filed by the Indenture Trustee with the Commission and with each securities exchange upon which the Notes are listed.  The Issuer will notify the Indenture Trustee when the Notes are listed on any securities exchange.

	
            Section 7.04.
 	
            Reports by Issuer.
 

The Issuer (a) shall deliver to the Indenture Trustee within 15 days after the Issuer is required to file the same with the Commission copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) that the Issuer is required to file with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and (b) shall also comply with the other provisions of TIA Section 314(a).

ARTICLE VIII

 

ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES

	
            Section 8.01.
 	
            Collection of Moneys.
 

Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall hold all such money and property received by it as part of the Trust Estate and shall apply it as provided in this Indenture.

 

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If the Indenture Trustee shall not have received the Remittable Funds by close of business on any related Deposit Date, the Indenture Trustee shall, unless the Issuer or the Servicer shall have made provisions satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of an amount equal to such Remittable Funds, deliver a notice, with a copy to the Note Insurer, to the Issuer and the Servicer of their failure to remit such Remittable Funds and that such failure, if not remedied by the close of business on the Business Day after the date upon which such notice is delivered to the Servicer, shall constitute an event of default under the Servicing Agreement.  If the Indenture Trustee shall subsequently receive any such Remittable Funds by 2:00 p.m. Eastern Time on such Business Day, such Event of Default shall not be deemed to have occurred.  Notwithstanding any other
provision hereof, the Indenture Trustee shall deliver to the Issuer or the Servicer, or their respective designee or assignee, any Remittable Funds received with respect to a Mortgage Loan after the related Deposit Date to the extent that the Issuer or the Servicer, respectively, previously made payment or provision for payment with respect to such Remittable Funds in accordance with this Section 8.01, and any such Remittable Funds shall not be deemed part of the Trust Estate.

Except as otherwise expressly provided in this Indenture and the Servicing Agreement, if, following delivery by the Indenture Trustee of the notice described above, the Servicer shall fail to remit the Remittable Funds on any Deposit Date, the Indenture Trustee shall deliver a second notice to the Servicer, the Issuer and the Note Insurer by 2:00 p.m. Eastern Time on the third Business Day prior to the related Payment Date indicating that an event of default occurred and is continuing under the Servicing Agreement.  Thereupon, the Indenture Trustee shall take such actions as are required of the Indenture Trustee under Article VI of the Servicing Agreement.  In addition, if a default occurs in any other performance required under the Servicing Agreement, the Indenture Trustee may, and upon the request of the Note Insurer or, with the consent of the Note Insurer, the Holders of Notes
representing more than 50% of the Note Balance of the Outstanding Notes shall, take such action as may be appropriate to enforce such payment or performance including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and to proceed thereafter as provided in Article V.

	
            Section 8.02.
 	
            Note Account; Distributions.
 

(a)               The Issuer hereby directs the Indenture Trustee to establish, at the Corporate Trust Office, one or more separate trust accounts that shall collectively be the “Note Account” on or before the Closing Date.  The Indenture Trustee shall promptly deposit in the Note Account (i) all Remittable Funds received by it from the Servicer pursuant to the Servicing Agreement, (ii) any other funds from any deposits to be made by the Servicer pursuant to the Servicing Agreement, (iii) any amount required to be deposited in the Note Account pursuant to Section 8.01, (iv) all amounts received pursuant to Section 8.03, and (v)  all other amounts received for deposit in the Note Account, including the payment of any Purchase Price
for a Mortgage Loan received by the Indenture Trustee.  All amounts that are deposited from time to time in a Note Account are subject to withdrawal by the Indenture Trustee for the purposes set forth in subsections (c) and (d) of this Section 8.02.  All funds withdrawn from the Note Account pursuant to subsection (c) of this Section 8.02 for the purpose of making payments to the Holders of Notes shall be applied in accordance with Section 3.03.

 

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(b)               So long as no Default or Event of Default shall have occurred and be continuing, amounts held in the Note Accounts shall be invested in Permitted Investments, which Permitted Investments shall mature no later than the Business Day preceding the immediately following Payment Date.

All income or other gains, if any, from investment of moneys deposited in the Note Accounts shall be for the benefit of the Servicer and on each Payment Date, any such amounts may be released from the Note Accounts and paid to the Servicer as part of its compensation for acting as Servicer.  Any loss resulting from such investment of moneys deposited in a Note Account shall be reimbursed immediately as incurred to the Note Account by the Servicer.  Subject to Section 6.01 and the preceding sentence, neither the Indenture Trustee nor the Servicer shall in any way be held liable by reason of any insufficiency in the Note Accounts.

(c)               On each Payment Date, the Indenture Trustee shall withdraw amounts on deposit in the Note Account and pay on a pari passu basis the Indenture Trustee Fee, Transition Expenses, if any not paid by the Servicer pursuant to the Servicing Agreement (not to exceed $50,000 in the aggregate), any gains or income from investments on the Note Account to the Servicer and, provided notice is given to the Indenture Trustee no later than the 4th Business Day prior to the Payment Date and to the extent such amounts have not been withdrawn pursuant to Sections 2.02 and 4.01 of the Servicing Agreement, amounts required to pay the Servicer any unpaid Servicing Fees then due and to reimburse the Servicer for Monthly Advances and Servicing Advances previously made by, and not
previously reimbursed to or retained by, the Servicer, which are so reimbursable to the Servicer pursuant to the Servicing Agreement (as reported in writing by the Servicer to the Indenture Trustee).  After payment of such amounts, unless the Notes have been declared due and payable pursuant to Section 5.02 and moneys collected by the Indenture Trustee are being applied in accordance with Section 5.07, Available Funds on deposit in the Note Account on any Payment Date or Redemption Date shall be withdrawn from such Note Account, in the amounts required, for application on such Payment Date as follows:

(i)                first, to the PMI Insurer, the amount owing for such Payment Date to the PMI Insurer for the premium payable in respect of the PMI Mortgage Loans;

(ii)               second, to the Note Insurer, the Note Insurer Premium for such Payment Date in respect of the Notes;

(iii)              third, to the Noteholders, the Note Interest with respect to such Payment Date;

(iv)              fourth, to the Noteholders, the amount of Monthly Principal for the Notes with respect to such Payment Date, in reduction of the Note Balance until the Note Balance is reduced to zero;

(v)               fifth, to the Note Insurer, the amount owing to the Note Insurer under the Insurance Agreement for reimbursement for prior draws made on the Insurance Policy in respect of the Notes and any other amounts owing to the Note Insurer under the Insurance Agreement (including any unpaid Note Insurer Premium in respect of the Notes);

 

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(vi)              sixth, to the Noteholders, the Overcollateralization Deficiency Amount, if any, on such Payment Date (after giving effect to application of Monthly Principal for such Payment Date), in reduction of the Note Balance until the Note Balance is reduced to zero; and

(vii)             seventh, to the Indenture Trustee pursuant to the terms of the Servicing Agreement, Transition Expenses in excess of $50,000, if any, and other costs and expenses, if not paid by the Servicer pursuant to the Servicing Agreement or the Custody Agreement.

(d)               On or after each Payment Date, so long as the Indenture Trustee shall have prepared a Payment Date Statement in respect of such Payment Date and (1) shall have made, or, in accordance with Section 3.03, set aside from amounts in the Note Account an amount sufficient to make, the payments required to be made as set forth in Section 8.02(c) as indicated in such Payment Date Statement, and (2) shall have set aside any amounts that have been deposited in the Note Account prior to such time that represent amounts that are to be used to make payments on the Notes on the next succeeding Payment Date, the cash balance, if any, then remaining in such Note Account shall be withdrawn from such Note Account by the Indenture Trustee and, so long as no Default
or Event of Default shall have occurred and be continuing, shall be released from the lien of this Indenture and paid by the Indenture Trustee to the Issuer.

(e)               Any payments made by the Indenture Trustee to the Issuer pursuant to this Section 8.02 shall be remitted to the Certificate Distribution Account established and maintained pursuant to the Trust Agreement.

(f)                In the event the Indenture Trustee is required to establish a Collection Account pursuant to the Servicing Agreement, the Indenture Trustee shall establish and maintain such account in the manner required under the Servicing Agreement.  The Indenture Trustee shall reinvest amounts in the Collection Account at the direction of the Servicer in Permitted Investments.  All income or other gains, if any, from investment of moneys deposited in the Collection Account shall be for the benefit of the Servicer, and the Indenture Trustee shall release any such amounts from the Collection Account to the Servicer on each Deposit Date.

Section 8.03.       Claims Upon the Insurance Policy; Insurance Policy Payments Account.

(a)               If, by the close of business on the third Business Day prior to a Payment Date, the Indenture Trustee determines that a Deficiency Amount for any Payment Date is greater than zero or that a claim may be made under the Insurance Policy in respect to any amount paid to Noteholders which is recoverable in bankruptcy as a preference, then the Indenture Trustee shall give notice to the Note Insurer by telephone or telecopy of the amount of such Deficiency Amount or preference.  Such notice of such Deficiency Amount shall be confirmed in writing in the form set forth as Exhibit A to the Endorsement of the Insurance Policy, to the Note Insurer and the Fiscal Agent (as defined in the Insurance Policy), if any, at or before 12:00 noon New York time on the third
Business Day prior to such Payment Date.  Following Receipt (as defined in the Insurance Policy) by the Note Insurer of such notice in such form, the Note Insurer will pay any amount payable under the Insurance Policy on the later to occur of (i) 12:00 noon New 

 

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York time on the third Business Day following such receipt and (ii) 12:00 noon New York time on the Payment Date to which such deficiency relates, as provided in the Endorsement to the Insurance Policy.

(b)               The Indenture Trustee shall establish a separate special purpose trust account for the benefit of Holders of the Notes and the Note Insurer referred to herein as the “Insurance Policy Payments Account” over which the Indenture Trustee shall have exclusive control and sole right of withdrawal.  The Indenture Trustee shall deposit any amount paid under the Insurance Policy in the Insurance Policy Payments Account and distribute such amount only for purposes of payment to Holders of Notes of the Insured Payment for which a claim was made, and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Indenture Trustee or the Trust Estate.  Amounts paid under the Insurance Policy shall be transferred to the Note
Account in accordance with the next succeeding paragraph and disbursed by the Indenture Trustee to Holders of Notes in accordance with Section 8.02(c).  It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay the Insured Payment with other funds available to make such payment.  However, the amount of any payment of principal of or interest on the Notes to be paid from funds transferred from the Insurance Policy Payments Account shall be noted as provided in paragraph (c) below in the Note Register and in the statement to be furnished to Holders of the Notes pursuant to Section 7.02.  Funds held in the Insurance Policy Payments Account shall not be invested.  Proceeds of the Insurance Policy shall not be considered payment by the Issuer with respect to such Notes, and the Note Insurer shall become the owner of such unpaid amounts due from the Issuer in respect of such Insured Payments as the
deemed assignee and subrogee of such Noteholders and shall be entitled to received the reimbursement in respect thereof.  The Indenture  Trustee hereby agrees on behalf of each Noteholder for the benefit of the Note Insurer that it recognizes that to the extent the Note Insurer makes Insured Payments for the benefit of the Noteholders, the Note Insurer will be entitled to receive the related reimbursement in accordance with the priority of distributions referenced in Section 8.02(c) hereof.

(c)               Each Noteholder, by its purchase of Notes, and the Indenture Trustee hereby agree that, unless a Note Insurer Default exists and is continuing, the Note Insurer shall have the right to direct all matters relating to the Notes in any proceeding in a bankruptcy of the Issuer, including, without limitation, any proceeding relating to a Preference Claim and the posting of any surety or Note pending any such appeal. 

(d)               Unless a Note Insurer Default exists and is continuing, the Indenture Trustee shall cooperate in all respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer's rights or interests hereunder without limiting the rights or affecting the interests of the Noteholders as otherwise set forth herein. 

(e)               The Indenture Trustee shall surrender the Insurance Policy to the Note Insurer for cancellation upon the expiration of the term of the Insurance Policy as provided in the Insurance Agreement. 

On any Payment Date with respect to which a claim has been made under the Insurance Policy, the amount of any funds received by the Indenture Trustee as a result of any claim under the Insurance Policy, to the extent required to make the Insured Payment on such Payment Date, 

 

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shall be withdrawn from the Insurance Policy Payments Account and deposited in the Distribution Account and applied by the Indenture Trustee, together with the other funds to be withdrawn from the Note Account pursuant to Section 8.02(c) directly to the payment in full of the Insured Payment due on the Notes.  Funds received by the Indenture Trustee as a result of any claim under the Insurance Policy shall be deposited by the Indenture Trustee in the Insurance Policy Payments Account and used solely for payment to the Holders of the Notes and may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Indenture Trustee, or the Trust Estate.  Any funds remaining in the Insurance Policy Payments Account on the first Business Day following a Payment Date shall be remitted to the Note Insurer, pursuant to the instructions of the Note Insurer, by the end of such Business Day.

(f)                The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid in respect of any Note from moneys received under the Insurance Policy.  The Note Insurer shall have the right to inspect such records at reasonable times during normal business hours upon one Business Day’s prior notice to the Indenture Trustee.

(g)               The Indenture Trustee shall promptly notify the Note Insurer and Fiscal Agent of any proceeding or the institution of any action, of which a Responsible Officer of the Indenture Trustee has actual knowledge seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership or similar law (a “Preference Claim”) of any Insured Payment made with respect to the Notes.  Each Holder of the Notes, by its purchase of such Certificates, the Servicer, and the Indenture Trustee hereby agree that the Note Insurer (so long as no Note Insurer Default has occurred and is continuing) may at any time during the continuation of any proceeding relating to a Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order relating to such Preference Claim and (ii) the posting of any surety, supersedeas or performance bond pending any such appeal.  In addition and without limitation of the foregoing, the Note Insurer shall be subrogated to the rights of the Servicer, the Indenture Trustee, and each Holder of the Notes in the conduct of any such Preference Claim, including, without limitation, all rights of any party to an adversary proceeding action with respect to any court order issued in connection with any such Preference Claim.

Section 8.04.       General Provisions Regarding the Note Accounts and Mortgage Loans.

(a)               Each Note Account shall relate solely to the Notes and to the Mortgage Loans, Permitted Investments and other property securing the Notes.  Funds and other property in the Note Account shall not be commingled with any other moneys or property of the Issuer or any Affiliate thereof except as otherwise expressly provided for herein.  Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other property received or held by it as part of the Note Account in collective accounts maintained by it in the normal course of its business and containing funds or property held by it for other Persons (which may include the Issuer or an Affiliate), provided that such accounts are under the sole control of the Indenture Trustee and the Indenture Trustee
maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to a Note Account.

 

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(b)               If any amounts are needed for payment from the Note Account and sufficient uninvested funds are not available therein to make such payment, the Indenture Trustee shall cause to be sold or otherwise converted to cash a sufficient amount of the investments in such Note Account.

(c)               The Indenture Trustee shall, at all times while any Notes are Outstanding, maintain in its possession, or in the possession of an agent whose actions with respect to such items are under the sole control of the Indenture Trustee, all certificates or other instruments, if any, evidencing any investment of funds in the Note Account.  The Indenture Trustee shall relinquish possession of such items, or direct its agent to do so, only for purposes of collecting the final payment receivable on such investment or certificate or, in connection with the sale of any investment held in the Note Account, against delivery of the amount receivable in connection with any sale.

(d)               The Indenture Trustee shall not invest any part of the Trust Estate in Permitted Investments that constitute uncertificated securities (as defined in Section 8-102 of the Uniform Commercial Code, as enacted in the relevant jurisdiction) or in any other book-entry securities unless it has received an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee setting forth, with respect to each type of security for which authority to invest is being sought, the procedures that must be followed to maintain the lien and security interest created by this Indenture with respect to the Trust Estate.

	
            Section 8.05.
 	
            Releases of Defective Mortgage Loans.
 

Upon notice or discovery that any of the representations or warranties of the Seller set forth in Section 4(b) and Exhibit B of the Mortgage Loan Sale Agreement was materially incorrect or otherwise misleading with respect to any Mortgage Loan as of the time made, the Indenture Trustee shall direct the Seller to either (i) within 60 days after the Seller receives actual knowledge of such incorrectness, eliminate or otherwise cure the circumstance or condition in respect of which such representation or warranty was incorrect as of the time made, (ii) withdraw such Defective Mortgage Loan from the lien of this Indenture following the expiration of such 60-day period by depositing to the Note Account an amount equal to the Purchase Price for such Mortgage Loan or (iii) substitute a Qualified Replacement Mortgage Loan for such Defective Mortgage Loan and deposit any
Purchase Price required to be paid in connection with such substitution pursuant to Section 7 of the Mortgage Loan Sale Agreement, all as provided in Section 7 of the Mortgage Loan Sale Agreement.  Upon any purchase of or substitution for a Defective Mortgage Loan by the Seller in accordance with Section 7 of the Mortgage Sale Agreement, the Indenture Trustee shall deliver the Mortgage File relating to such Defective Mortgage Loan to the Seller, and the Issuer and the Indenture Trustee shall execute such instruments of transfer as are necessary to convey title to such Defective Mortgage Loan to the Seller from the lien of this Indenture.

Section 8.06.       Reports by Indenture Trustee to Noteholders; Access to Certain Information.

On each Payment Date, the Indenture Trustee shall make available the written report required by Section 2.08(d) to Noteholders of record as of the related Record Date (including the 

 

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Clearing Agency, if any). via the Indenture Trustee’s internet website and its fax-on-demand service. The Indenture Trustee’s internet website shall be initially located at “                   ”.  Assistance in using the website or the fax-on-demand service can be obtained by calling the Indenture Trustee’s customer service desk at                         .  Noteholders that are unable to use the above distribution options are entitled to have a paper copy mailed to them via first class mail by calling the customer service desk and indicating such.

The Indenture Trustee shall make available at its Corporate Trust Office, during normal business hours, for review by any Noteholder or any person identified to the Indenture Trustee as a prospective Noteholder, originals or copies of the following items:  (a) the Indenture and any amendments thereto, (b) all Payment Date Statements delivered to the Issuer since the Closing Date, (c) any Officers’ Certificates delivered to the Indenture Trustee since the Closing Date as described in the Indenture and (d) any Accountants’ reports delivered to the Indenture Trustee since the Closing Date as required under the Servicing Agreement.  Copies of any and all of the foregoing items will be available from the Indenture Trustee upon request; however, the Indenture Trustee will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing such
copies and shall not be required to provide such copies without reasonable assurances that such sum will be paid.

	
            Section 8.07.
 	
            Trust Estate Mortgage Files.
 

(a)               The Indenture Trustee shall release Mortgage Files or portions thereof to the Servicer on the terms specified in the Servicing Agreement.

(b)               The Indenture Trustee shall, at such time as there are no Notes outstanding, release all of the Trust Estate to the Issuer (other than any cash held for the payment of the Notes pursuant to Section 3.03 or 4.02).

	
            Section 8.08.
 	
            Amendment to Servicing Agreement.
 

The Indenture Trustee may, without the consent of any Holder, enter into or consent to any amendment or supplement to the Servicing Agreement for the purpose of increasing the obligations or duties of any party other than the Indenture Trustee or the Holders of the Notes.  The Indenture Trustee may, in its discretion, decline to enter into or consent to any such supplement or amendment:  (i) unless the Indenture Trustee receives an Opinion of Counsel that the position of the Holders would not be materially adversely affected or written confirmation from the Rating Agencies that the then-current implied ratings on the Notes (without taking into account the Insurance Policy) would not be adversely affected by such supplement or amendment or (ii) if its own rights, duties or immunities would be adversely affected.

	
            Section 8.09.
 	
            Delivery of the Mortgage Files Pursuant to Servicing Agreement.
 

As is appropriate for the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall cause the Custodian to deliver to the Servicer of such Mortgage the Mortgage Files for such Mortgage Loan upon receipt by the Indenture Trustee and the Custodian on or prior to the date such release is to be made of:

 

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(a)               such Officers’ Certificates, if any, as are required by the Servicing Agreement; and

(b)               a “Request for Release” in the form prescribed by the Servicing Agreement, executed by the Servicer, providing that the Servicer will hold or retain the Mortgage Files in trust for the benefit of the Indenture Trustee, the Note Insurer and the Holders of Notes.

	
            Section 8.10.
 	
            Servicer as Agent.
 

In order to facilitate the servicing of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of the Mortgage Loans has been appointed by the Issuer to retain, in accordance with the provisions of the Servicing Agreement and this Indenture, all Remittable Funds on such Mortgage Loans prior to their deposit into the Note Account on or prior to the related Deposit Date.

	
            Section 8.11.
 	
            Termination of Servicer.
 

In the event of an event of default specified in Section 6.01 of the Servicing Agreement, the Indenture Trustee may, with the consent of the Note Insurer, and shall, upon the direction of the Note Insurer (or as otherwise provided in the Servicing Agreement), terminate the Servicer as provided in Section 6.01 and Section 6.02 of the Servicing Agreement.  If the Indenture Trustee terminates the Servicer, the Indenture Trustee shall, pursuant to Sections 6.01 and 6.02 of the Servicing Agreement, assume the duties of the Servicer or appoint a successor servicer acceptable to the Issuer, the Note Insurer and the Rating Agencies and meeting the requirements set forth in the Servicing Agreement.

	
            Section 8.12.
 	
            Opinion of Counsel.
 

The Indenture Trustee shall be entitled to receive at least five Business Days’ notice of any action to be taken pursuant to Sections 8.07(a) (other than in connection with releases of Mortgage Loans that were the subject of a Full Prepayment of the type described in clause (i) of the definition of the term “Full Prepayment”) and 8.08, accompanied by copies of any instruments involved, and the Indenture Trustee shall be entitled to receive an Opinion of Counsel, in form and substance reasonably satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such action.

	
            Section 8.13.
 	
            Appointment of Custodians.
 

The Indenture Trustee may, at the written direction of the Issuer and at no additional cost to the Issuer or to the Indenture Trustee, with the consent of the Note Insurer, appoint one or more Custodians to hold all or a portion of the Mortgage Files as agent for the Indenture Trustee.  Each Custodian shall (i) be a financial institution supervised and regulated by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Office of Thrift Supervision, or the Federal Deposit Insurance Corporation; (ii) have combined capital and 

 

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surplus of at least $10,000,000; (iii) be equipped with secure, fireproof storage facilities, and have adequate controls on access to assure the safety and security of the Mortgage Files; (iv) utilize in its custodial function employees who are knowledgeable in the handling of mortgage documents and of the functions of a mortgage document custodian; and (v) satisfy any other reasonable requirements that the Issuer may from time to time deem necessary to protect the interests of Noteholders and the Note Insurer in the Mortgage Files.  Each Custodian shall be subject to the same obligations and standard of care as would be imposed on the Indenture Trustee hereunder assuming the Indenture Trustee retained the Mortgage Files directly.  The appointment of one or more Custodians shall not relieve the Indenture Trustee from any of its obligations hereunder.  If the Servicer is appointed as a
Custodian in accordance with this Section 8.14, it shall fulfill its servicing and custodial duties and obligations through separate departments and, if it maintains a trust department, shall fulfill its custodial duties and obligations through such trust department.

	
            Section 8.14.
 	
            Rights of the Note Insurer to Exercise Rights of Noteholders.
 

By accepting its Notes, each Noteholder agrees that unless a Note Insurer Default exists, the Note Insurer shall have the right to exercise all rights of the Noteholders under this Agreement without any further consent of the Noteholders, including, without limitation:

(i)                the right to require the Servicer to effect foreclosures upon Mortgage Loans upon failure of the Servicer to do so;

(ii)               the right to require the Seller to repurchase or substitute for Defective Mortgage Loans pursuant to Section 8.05;

(iii)              the right to direct the actions of the Indenture Trustee during the continuance of an Event of Default; and

	
            (iv)
 	
            the right to vote on proposed amendments to this Indenture.
 

In addition, each Noteholder agrees that, unless a Note Insurer Default exists, the rights specifically set forth above may be exercised by the Noteholders only with the prior written consent of the Note Insurer.

Except as otherwise provided in Section 8.03 and notwithstanding any provision in this Indenture to the contrary, so long as a Note Insurer Default has occurred and is continuing, the Note Insurer shall have no rights to exercise any voting rights of the Noteholders hereunder, nor shall the Indenture Trustee be required to obtain the consent of, or act at the direction of, the Note Insurer.

	
            Section 8.15.
 	
            Trust Estate and Accounts Held for Benefit of the Note Insurer.
 

The Indenture Trustee shall hold the Trust Estate and the Mortgage Files for the benefit of the Noteholders and the Note Insurer and all references in this Agreement and in the Notes to the benefit of Holders of the Notes shall be deemed to include the Note Insurer (provided there does not exist a Note Insurer Default).

 

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All notices, statements, reports, certificates or opinions required by this Agreement to be sent to any other party hereto or to the Noteholders shall also be sent to the Note Insurer.

	
            Section 8.16.
 	
            [Reserved.]
 

ARTICLE IX

 

SUPPLEMENTAL INDENTURES

	
            Section 9.01.
 	
            Supplemental Indentures Without Consent of Noteholders.
 

With the consent of the Note Insurer and without the consent of the Holders of any Notes, the Issuer and the Indenture Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes:

(1)               to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(2)               to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of the issuance, authentication and delivery of any Notes, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed;

(3)               to evidence the succession of another Person to the Issuer to the extent permitted herein, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;

(4)               to add to the covenants of the Issuer, for the benefit of the Holders of all Notes and the Note Insurer or to surrender any right or power herein conferred upon the Issuer;

(5)               to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, provided that such action shall not adversely affect in any material respect the interests of the Holders of the Notes or the Holders of the Certificates; and provided, further, that the amendment shall not be deemed to adversely affect in any material respect the interests of the Holders of the Notes and the Note
Insurer if the Person requesting the amendment obtains letters from the Rating Agencies that the amendment would not result in the downgrading or withdrawal of the implied ratings then assigned to the Notes (without taking into account the Insurance Policy); or

(6)               to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or 

 

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under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA.

	
            Section 9.02.
 	
            Supplemental Indentures With Consent of Noteholders.
 

With the consent of the Note Insurer and with the consent of Holders of Notes representing not less than a majority of the Note Balance of all Outstanding Notes by Act of said Holders delivered to the Issuer and the Indenture Trustee, the Issuer and the Indenture Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

(1)        change any Payment Date or the Final Maturity Date of the Notes or reduce the principal amount thereof, the Note Interest Rate thereon or the Redemption Price with respect thereto, change the earliest date on which any Note may be redeemed at the option of the Issuer, change any place of payment where, or the coin or currency in which, any Note or any interest thereon is payable, or impair the right to institute suit for the enforcement of the payment of any installment of interest due on any Note on or after the Final Maturity Date thereof or for the enforcement of the payment of the entire remaining unpaid principal amount of any Note on or after the Final Maturity Date (or, in the case of redemption, on or after the applicable Redemption Date);

(2)        reduce the percentage of the Note Balance of the Outstanding Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with provisions of this Indenture or Defaults hereunder and their consequences provided for in this Indenture;

(3)        modify any of the provisions of this Section, Section 5.13 or Section 5.17(b), except to increase any percentage specified therein or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

(4)        modify or alter the provisions of the proviso to the definition of the term “Outstanding”

(5)        permit the creation of any lien other than the lien of this Indenture with respect to any part of the Trust Estate (except for Permitted Encumbrances) or terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security afforded by the lien of this Indenture;

(6)        modify any of the provisions of this Indenture in such manner as to affect the calculation of the Required Payment Amount for any Payment Date (including the calculation of any of the individual components of such Required Payment Amount) or to affect rights of the Holders of the Notes to the benefits of any provisions for the mandatory redemption of Notes contained herein; or

 

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(7)               incur any indebtedness, other than the Notes, that would cause the Issuer or the Trust Estate to be treated as a “taxable mortgage pool” within the meaning of Code Section 7701(i).

The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable for any such determination made in good faith.

It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

	
            Section 9.03.
 	
            Execution of Supplemental Indentures.
 

In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise.  The Issuer shall cause executed copies of any Supplemental Indentures to be delivered to the Rating Agencies and the Note Insurer.

	
            Section 9.04.
 	
            Effect of Supplemental Indentures.
 

Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes to which such supplemental indenture relates that have theretofore been or thereafter are authenticated and delivered hereunder shall be bound thereby.

	
            Section 9.05.
 	
            Conformity With Trust Indenture Act.
 

Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.

	
            Section 9.06.
 	
            Reference in Notes to Supplemental Indentures.
 

 

 

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Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

	
            Section 9.07.
 	
            Amendments to Governing Documents.
 

The Indenture Trustee shall, subject to Sections 9.01 and 9.02 hereof, upon Issuer Request, consent to any proposed amendment to the Issuer’s governing documents, or an amendment to or waiver of any provision of any other document relating to the Issuer’s governing documents, such consent to be given without the necessity of obtaining the consent of the Holders of any Notes upon receipt by the Indenture Trustee of:

(i)                an Officers’ Certificate, to which such proposed amendment or waiver shall be attached, stating that such attached copy is a true copy of the proposed amendment or waiver and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied; and

(ii)               written confirmation from the Rating Agencies that the implementation of the proposed amendment or waiver will not adversely affect their implied ratings of the Notes (without taking into account the Insurance Policy).

Notwithstanding the foregoing, the Indenture Trustee may decline to consent to a proposed waiver or amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise.

Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the Indenture Trustee to any amendment or waiver or any provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the proposed amendment or waiver.

ARTICLE X

 

REDEMPTION OF NOTES

	
            Section 10.01.
 	
            Redemption.
 

(a)               All the Notes may be redeemed in whole, but not in part, on or after the Initial Redemption Date at the Redemption Price at the option of the holders of a majority of the ownership interest of the Issuer (the “Residual Majority”), or at the option of the Servicer if the Residual Majority shall not have exercised its option to direct the Servicer to redeem the Notes on such Redemption Date or, if such option is not exercised by the Servicer, at the option of the Note Insurer; provided, however, that funds in an amount equal to the Redemption Price, plus any amounts owed to the Note Insurer under the Insurance Agreement, any unreimbursed 

 

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Nonrecoverable Advances and any unreimbursed amounts due and owing to the Indenture Trustee hereunder, must have been deposited with the Indenture Trustee prior to the Indenture Trustee’s giving notice of such redemption pursuant to Section 10.02 or the Issuer shall have complied with the requirements for satisfaction and discharge of the Notes specified in Section 4.01.  Notice of the election to redeem the Notes shall be furnished to the Indenture Trustee not later than thirty (30) days prior to the Payment Date selected for such redemption, whereupon all such Notes shall be due and payable on such Payment Date upon the furnishing of a notice pursuant to Section 10.02 to each Holder of such Notes and the Note Insurer.  Any expenses associated with the compliance of the provisions hereof in connection with a redemption of the Notes shall be paid by the Note Insurer or the Servicer,
depending upon which party redeems the Notes. In no event shall the Note Insurer redeem the Notes unless the proceeds received from the Note Insurer would be not less than the greater of (x) the entire amount that would be payable to the Holders of the Notes, in full payment thereof on the Payment Date next succeeding the date of such Sale and (y) the fair market value of the Mortgage Loans as of the related Payment Date.  Upon the redemption of the Notes, Mortgage Loans in the Trust Estate shall be released and delivered to the Issuer.

(b)               Upon receipt of the notice from the Servicer or the Note Insurer of its election to redeem the Notes pursuant to Section 10.01(a), the Indenture Trustee shall prepare and deliver to the Issuer, the Servicer and the Note Insurer, no later than the related Redemption Date, a Payment Date Statement stating therein that it has determined that the conditions to redemption at the option of the Servicer or Note Insurer have been satisfied and setting forth the amount, if any, to be withdrawn from each Note Account and paid to the Servicer as reimbursement for Nonrecoverable Advances and such other information as may be required to accomplish such redemption.

	
            Section 10.02.
 	
            Form of Redemption Notice.
 

Notice of redemption shall be given by the Indenture Trustee in the name of and at the expense of the Issuer by first class mail, postage prepaid, mailed not less than ten days prior to the Redemption Date to each Holder of Notes to be redeemed, such Holders being determined as of the Record Date for such Payment Date, and to the Note Insurer.

All notices of redemption shall state:

	
            (1)
 	
            the Redemption Date;
 	
             

	
            (2)
 	
            the Redemption Price at which the Notes of such Series will be redeemed,
 

(3)               the fact of payment in full on such Notes, the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02), and that no interest shall accrue on such Note for any period after the date fixed for redemption.

Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for redemption shall not impair or affect the validity of the redemption of any other Note.

 

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            Section 10.03.
 	
            Notes Payable on Optional Redemption.
 

Notice of redemption having been given as provided in Section 10.02, the Notes to be redeemed shall, on the applicable Redemption Date, become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on such Redemption Price for any period after such Redemption Date; provided, however, that if such Redemption Price is not paid on the Redemption Date, the Note Balance shall, until paid, bear interest from the Redemption Date at the Note Interest Rate.

ARTICLE XI

 

MISCELLANEOUS

	
            Section 11.01.
 	
            Compliance Certificates and Opinions.
 

(a)               Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee and the Note Insurer an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel (with a copy to the Note Insurer), if requested by the Indenture Trustee, stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.

(b)               Every certificate, opinion or letter with respect to compliance with a condition or covenant provided for in this Indenture, including one furnished pursuant to specific requirements of this Indenture relating to a particular application or request (other than certificates provided pursuant to TIA Section 314(a)(4)) shall include and shall be deemed to include (regardless of whether specifically stated therein) the following:

(1)               a statement that each individual signing such certificate, opinion or letter has read such covenant or condition and the definitions herein relating thereto;

(2)               a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate, opinion or letter are based;

(3)               a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(4)               a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

 

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            Section 11.02.
 	
            Form of Documents Delivered to Indenture Trustee.
 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other counsel’s opinion and shall include a statement to the effect that such counsel believes that such counsel and the Indenture Trust may reasonably rely upon the opinion of such other counsel.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Wherever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 6.01(b)(2).

Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Indenture Trustee at the request or direction of the Issuer, then, notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s right to make such request or direction, the Indenture Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.01(d).

	
            Section 11.03.
 	
            Acts of Noteholders.
 

(a)               Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered 

 

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to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders 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 Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

(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 any 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 an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority.

	
            (c)
 	
            The ownership of Notes shall be proved by the Note Register.
 

(d)               Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note 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 Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Notes.

	
            Section 11.04.
 	
            Notices, etc., to Indenture Trustee, the Note Insurer and Issuer.
 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

(1)               the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with and received by the Indenture Trustee at its Corporate Trust Office and at [address]; or

(2)               the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder (except as provided in Section 5.01(3) and (4)) if in writing and mailed, first-class postage prepaid, to the Issuer addressed to it at                             Loan Trust 200 - ), in care of                , [address], Attention:  Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer; or

(3)               the Note Insurer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to                                 addressed to it at [address], Attention:  Structured Finance Group (                          Loan Trust 200 - , Mortgage Backed Notes, Series 200 - ), or at any other address previously furnished in writing to the Indenture Trustee by the
Note Insurer;  or

 

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(4)               the Depositor by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to Wachovia Mortgage Loan Trust, LLC, [address], Attention:                            , or at any other address previously furnished in writing to the Indenture Trustee by the Depositor; or

(5)               the Seller or the Servicer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to      , [address], Attention:  General Counsel or at any other address previously furnished in writing to the Indenture Trustee by the Seller or the Servicer; or

(6)               the Underwriters by any party or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to (a) [address], Attn:        and (b) [address], Attn:           .

Notices required to be given to the Rating Agencies by the Issuer or the Indenture Trustee shall be in writing, personally delivered or mailed first-class postage pre-paid, to (i) in the case of [Rating Agency], at the following address: [address], Attention:                , (ii) in the case of [Rating Agency], at the following address: [address], Attention:                or as to each of the foregoing, at such other address as shall be designed by written notice to the other parties.

	
            Section 11.05.
 	
            Notices and Reports to Noteholders; Waiver of Notices.
 

Where this Indenture provides for notice to Noteholders of any event or the mailing of any report to Noteholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if mailed, first-class postage prepaid, to each Noteholder affected by such event or to whom such report is required to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice or the mailing of such report.  In any case where a notice or report to Noteholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in any notice or report so mailed, to any particular Noteholder shall affect the sufficiency of such notice or report with respect to other Noteholders, and any notice or report that is
mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

	
            Section 11.06.
 	
            Rules by Indenture Trustee.
 

 

 

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The Indenture Trustee may make reasonable rules for any meeting of Noteholders.

	
            Section 11.07.
 	
            Conflict With Trust Indenture Act.
 

If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control.

	
            Section 11.08.
 	
            Effect of Headings and Table of Contents.
 

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

	
            Section 11.09.
 	
            Successors and Assigns.
 

All covenants and agreements in this Indenture by the Issuer shall bind its successors and assigns, whether so expressed or not.

	
            Section 11.10.
 	
            Separability.
 

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

	
            Section 11.11.
 	
            Benefits of Indenture.
 

Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any separate trustee or Co-trustee appointed under Section 6.14, the Note Insurer and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

	
            Section 11.12.
 	
            Legal Holidays.
 

In any case where the date of any Payment Date, Redemption Date or any other date on which principal of or interest on any Note is proposed to be paid shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Payment Date, Redemption Date or other date for the payment of principal of or interest on any Note and no interest shall accrue for the period from and after any such nominal date, provided such payment is made in full on such next succeeding Business Day.

	
            Section 11.13.
 	
            Governing Law.
 

IN VIEW OF THE FACT THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A 

 

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STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

	
            Section 11.14.
 	
            Counterparts.
 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

	
            Section 11.15.
 	
            Recording of Indenture.
 

This Indenture is subject to recording in any appropriate public recording offices, such recording to be effected by the Issuer and at its expense in compliance with any Opinion of Counsel delivered pursuant to Section 2.11(c) or 3.06.

	
            Section 11.16.
 	
            Issuer Obligation.
 

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement.

	
            Section 11.17.
 	
            No Petition.
 

The Indenture Trustee, by entering into this Indenture, and each Noteholder and Beneficial Owner, by accepting a Note, hereby covenant and agree that they will not at any time institute against            or the Issuer, or join in any institution against            or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents.  In addition, the Indenture Trustee will on behalf of the holders of the Notes, (a) file a written objection to any motion or other proceeding seeking the substantive consolidation of the Seller with,
           or the Issuer, (b) file an appropriate memorandum of points and authorities or other brief in support of such objection, or (c) endeavor to establish at the hearing on such objection 

 

-84-

 

 

 

that the substantive consolidation of such entity would be materially prejudicial to the Noteholders.

This Section 11.17 will survive for one year and one day following the termination of this Indenture.

	
            Section 11.18.
 	
            Inspection.
 

The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee and the Note Insurer, during the Issuer’s normal business hours, to examine all of books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent Accountants selected by the Indenture Trustee or the Note Insurer, as the case may be, and to discuss its affairs, finances and accounts with its officers, employees and Independent Accountants (and by this provision the Issuer hereby authorizes its Accountants to discuss with such representatives such affairs, finances and accounts), all at such reasonable times and as often as may be reasonably requested.  Any expense incident to the exercise by the Indenture Trustee of any right under this Section 11.18 shall be borne by the Issuer.

	
            Section 11.19.
 	
            Usury.
 

The amount of interest payable or paid on any Note under the terms of this Indenture shall be limited to an amount that shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the United States or the State of New York (whichever shall permit the higher rate), that could lawfully be contracted for, charged or received (the “Highest Lawful Rate”).  In the event any payment of interest on any Note exceeds the Highest Lawful Rate, the Issuer stipulates that such excess amount will be deemed to have been paid as a result of an error on the part of both the Indenture Trustee, acting on behalf of the Holder of such Note, and the Issuer, and the Holder receiving such excess payment shall promptly, upon discovery of such error or upon notice thereof from the Issuer or the Indenture Trustee, refund the amount of such excess or, at the option of the
Indenture Trustee, apply the excess to the payment of principal of such Note, if any, remaining unpaid.  In addition, all sums paid or agreed to be paid to the Indenture Trustee for the benefit of Holders of Notes for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Notes.

	
            Section 11.20.
 	
            Third Party Beneficiary.
 

The Note Insurer is intended as a third party beneficiary of this Indenture shall be binding upon and inure to the benefit of the Note Insurer; provided that, notwithstanding the foregoing, for so long as a Note Insurer Default is continuing with respect to its obligations under the Insurance Policy, the Noteholders shall succeed to the Note Insurer’s rights hereunder.  Without limiting the generality of the foregoing, all covenants and agreements in this Indenture that expressly confer rights upon the Note Insurer shall be for the benefit of and run directly to the Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such covenants to the same extent as if it were a party to this Indenture.

 

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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee and the have caused this Indenture to be duly executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

 

		[                  ] LOAN TRUST 200 -
		
		
By:  [OWNER TRUSTEE],
        not in its individual capacity,
        but solely as Owner Trustee
		
		

By:  _______________________________
		        Authorized Signatory
		

[INDENTURE TRUSTEE],
		
    as Indenture Trustee
		

By:  _______________________________
		        Name:
        Title:

 

 

 

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SCHEDULE I  MORTGAGE LOAN SCHEDULE

 

 

 

EXHIBIT A FORM OF NOTE

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE INSURANCE POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

	
            Date of Indenture: As of   
 	
            Original Note Balance: $___________
 
	
            First Payment Date:   
 	
                               CUSIP No.:   ___________
 
	
            Denomination:  $____________
 	
                                  Note No.:   __
 
				

 

[                               ] LOAN TRUST 200 - 

	
            NOTES, SERIES 200 - , CLASS  
 

Loan Trust 200 - , a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of  $___________ payable on each Payment Date in an amount equal to the result obtained by multiplying (i) a fraction the numerator of which is $___________ and the denominator of which is $_____________ (this Note’s “Percentage Interest”) by (ii) the aggregate amount, if any, payable from the Note Account in respect of principal on the Notes pursuant to the Indenture dated as of                   , between the Issuer and
                             , a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of (i) the Payment Date occurring in December 2030 (the “Final Maturity Date”), (ii) the Redemption Date, if any, pursuant to Article X of the Indenture or (iii) the date on which an Event of Default shall have occurred and be continuing, if the Notes have been declared to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  Capitalized terms used but not defined herein are defined in Article I of the Indenture.

 

 

 

 

Pursuant to the terms of the Indenture, payments will be made on the 25th day of each month or, if such day is not a Business Day, on the Business Day immediately following such 25th day (each a “Payment Date”), commencing on the first Payment Date specified above, to the Person in whose name this Note is registered at the close of business on the applicable Record Date, in an amount equal to the product of (a) the Percentage Interest evidenced by this Note and (b) the sum of the amounts to be paid on Notes with respect to such Payment Date, all as more specifically set forth in the Indenture.

Notwithstanding the foregoing, in the case of Definitive Notes, upon written request at least five days prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Balance of at least $1,000,000), any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder reasonably satisfactory to the Indenture Trustee.

Payments of principal and interest on the Notes will be made on each Payment Date to Noteholders of record as of the related Record Date.  On each Payment Date, Noteholders will be entitled to receive interest payments in an aggregate amount equal to the related Note Interest for such Payment Date, together with principal payments in an aggregate amount equal to the Monthly Principal plus, until the Overcollateralization Amount is equal to the Required Overcollateralization Amount, Excess Cash, if any, for such Payment Date.  The “Note Balance” of a Note as of any date of determination is equal to the initial principal balance thereof as of the Closing Date, reduced by the aggregate of all amounts previously paid with respect to such Note on account of principal.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Mortgage Backed Notes, Series 200 - , Class    , issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. To the extent that any provision of this Note contradicts or is inconsistent with the provisions of the Indenture, the provisions of the Indenture shall control and supersede such contradictory or inconsistent provision herein.  The Notes are subject to all terms of the Indenture.

The Notes are and will be equally and ratably secured by the Mortgage Loans and the other collateral related thereto pledged as security therefor as provided in the Indenture.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Final Maturity Date and the Redemption Date, if any, pursuant to Article X of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred 

 

 

	
            A-2
 

 

 

and be continuing if the Indenture Trustee, at the direction or upon the prior written consent of Financial Security Assurance Inc. (the “Note Insurer”) in the absence of a Note Insurer Default, or the Holders of the Notes representing not less than 50% of the Note Balance of the Outstanding Notes (with the prior written consent of the Note Insurer in the absence of a Note Insurer Default), shall have declared the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Notes shall be made pro rata to the Noteholders entitled thereto.

The Note Insurer in consideration of the payment of the premium and subject to the terms of the Note Guaranty Insurance Policy (the “Insurance Policy”) thereby has unconditionally and irrevocably guaranteed the payment of the Insured Payments.

Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note Insurer shall be deemed to be the holder of the Notes for certain purposes specified in the Indenture and will be entitled to exercise all rights of the Noteholders thereunder, including the rights of Noteholders relating to the occurrence of, and the remedies with respect to, an Event of Default, without the consent of such Noteholders, and (ii) the Indenture Trustee may take actions which would otherwise be at its option or within its discretion, including actions relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the direction of the Note Insurer.  In addition, on each Payment Date, after the Noteholders have been paid all amounts to which they are entitled, the Note Insurer will be entitled to be reimbursed for any unreimbursed draws under the Insurance
Policy, paid Note Insurer Premium (each with interest thereon at the “Late Payment Rate” specified in the Insurance Agreement) and any other amounts owed under the Insurance Policy.

The Issuer shall not be liable upon the indebtedness evidenced by the Notes except to the extent of amounts available from the Trust Estate which constitutes security for the payment of the Notes.  The assets included in the Trust Estate and payments under the Insurance Policy will be sole source of payments on the Notes, and each Holder hereof, by its acceptance of this Note, agrees that (i) such Note will be limited in right of payment to amounts available from the Trust Estate and the Insurance Policy as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Seller, the Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuer pledged to secure the Notes pursuant to the Indenture.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Notwithstanding the
foregoing, in the case of Definitive Notes, upon written request at least five days prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Balance of at least $1,000,000), any 

 

 

	
            A-3
 

 

 

payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States designated by such Holder reasonably satisfactory to the Indenture Trustee.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed
or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee’s principal Corporate Trust Office or at the office of the Indenture Trustee’s agent appointed for such purposes.

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Issuer, on any Payment Date on and after the date on which the Note Balance is less than 10% of the Original Note Balance.

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.

The Note Registrar shall not register the transfer of this Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is not, and is not acquiring the Note on behalf of or with the assets of, an employee benefit plan or other retirement plan or arrangement  that is subject to Title I of the Employee Retirement Income Security Act or 1974, as amended, or Section 4975 of the Code or (ii)  the acquisition and holding of this Note by the transferee qualifies for exemptive relief under a Department of Labor Prohibited Transaction Class Exemption.  Each Beneficial Owner, by acceptance of a beneficial interest herein, shall be deemed to make one of the foregoing representations.

Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing 

 

 

	
            A-4
 

 

 

delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Beneficial Owner will not at any time institute against the             or the Issuer, or join in any institution against the              or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, the Servicing Agreement, the Management Agreement, the Insurance Agreement and the Indemnification Agreement
(the “Basic Documents”).

The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuer secured by the Trust Estate.  Each Noteholder, by acceptance of a Note (and each Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for federal, state and local income, single business and franchise tax purposes as indebtedness of the Issuer.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Note Insurer and the Holders of Notes representing a majority of the Note Balance of all Outstanding Notes.  The Indenture also contains provisions permitting the (i) Note Insurer or (ii) if a Note Insurer Default exists, the Holders of Notes representing specified percentages of the Note Balance of Outstanding Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Note Insurer or by the Holder of this Note (or any one or more Predecessor
Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the amendment thereof, in certain limited 

 

 

	
            A-5
 

 

 

circumstances, or the waiver of certain terms and conditions set forth in the Indenture, without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

Initially, the Notes will be represented by one Note registered in the name of CEDE & Co. as nominees of the Clearing Agency.  The Notes will be delivered as provided in the Indenture and subject to certain limitations therein set forth.  The Notes are exchangeable for a like aggregate initial Note Balance of Notes of different authorized denominations, as requested by the Holder surrendering the same.

THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

Unless the certificate of authentication hereon has been executed by the Authenticating Agent whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

	
            A-6
 

 

 

 

IN WITNESS WHEREOF, the Issuer has caused this Instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

DATE:  __________ __, ____

	
            [                        ] LOAN TRUST 200 -
	
              
 

By:          [OWNER TRUSTEE], not in its individual capacity but solely as Owner Trustee under the Trust Agreement

	
            By:  __________________________________  
 

Authorized Signatory

 

	
            A-7
 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class A Notes designated above and referred to in the within-mentioned Indenture.

Date: __________ __, ____

	
            [AUTHENTICATING AGENT],
 
	
            Authenticating Agent
 
	
            By:  ______________________________________                            
 
	
            Authorized Signatory
 

 

 

	
            A-8
 

 

 

 

ASSIGNMENT

Social Security or taxpayer I.D. or other identifying number of assignee:

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

____________________________________________________________________________________

(name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints                           , attorney,  to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises.

	
            Dated: ____________________*/
 
	
            Signature Guaranteed:
 
	
            __________________________*/
 

 

*/ NOTICE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

 

EXHIBIT B INSURANCE POLICY

 

 

 

 

EXHIBIT C FORM OF NOTICE OF CLAIM

 

 

 

 

EXHIBIT D PMI MORTGAGE LOANS

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