Exhibit 4.1
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BANC OF AMERICA MORTGAGE SECURITIES, INC.,
as
Depositor,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Servicer,
and
WELLS FARGO BANK, N.A.,
as
Trustee
POOLING AND SERVICING AGREEMENT
Dated [_______], 20
-----------------------
Mortgage Pass-Through Certificates
Series 20 -[__]
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<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY
STATEMENT........................................................1
ARTICLE I
DEFINITIONS
Section 1.01 Defined
Terms..................................................2
Section 1.02 Interest
Calculations.........................................27
Section 1.03 Fiscal
Year...................................................28
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01
Conveyance of Mortgage
Loans..................................28
Section 2.02
Acceptance by the Trustee of the Mortgage
Loans...............31
Section 2.03
Representations and Warranties of the
Servicer................33
Section 2.04
Representations and Warranties of the Depositor as to the
Mortgage Loans...............................................35
Section 2.05
Designation of Interests in the
REMICs........................42
Section 2.06
Designation of Start-up
Day...................................42
Section 2.07 REMIC
Certificate Maturity Date...............................42
Section 2.08 Execution
and Delivery of Certificates........................42
Section 2.09
Repurchase of Converted Mortgage
Loans........................43
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer
to Service Mortgage Loans............................43
Section 3.02
Subservicing; Enforcement of the Obligations of
Servicer......44
Section 3.03 Fidelity
Bond; Errors and Omissions Insurance.................46
Section 3.04 Access to
Certain Documentation...............................46
Section 3.05
Maintenance of Primary Insurance Policy;
Claims...............46
Section 3.06 Rights of
the Depositor and the Trustee in Respect of the
Servicer.....................................................47
Section 3.07 Trustee
to Act as Servicer....................................47
Section 3.08
Collection of Mortgage Loan Payments; Servicer Custodial
Account and Certificate Account..............................48
Section 3.09
Collection of Taxes, Assessments and Similar Items;
Escrow Accounts..............................................51
(i)
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Section 3.10 Access to
Certain Documentation and Information Regarding
the Mortgage Loans...........................................52
Section 3.11 Permitted
Withdrawals from the Servicer Custodial Account
and Certificate Account......................................52
Section 3.12
Maintenance of Hazard
Insurance...............................54
Section 3.13
Enforcement of Due-On-Sale Clauses; Assumption
Agreements.....55
Section 3.14
Realization Upon Defaulted Mortgage Loans; REO
Property.......56
Section 3.15 Trustee
to Cooperate; Release of Mortgage Files...............58
Section 3.16
Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee..........................59
Section 3.17 Servicing
Compensation........................................60
Section 3.18 Annual
Statement as to Compliance.............................60
Section 3.19
Assessments of Servicing Compliance; Registered Public
Accounting Firm Attestation Reports..........................60
Section 3.20
Advances......................................................62
Section 3.21
Modifications, Waivers, Amendments and
Consents...............63
Section 3.22 Reports
to the Securities and Exchange Commission.............64
Section 3.23 Buy-Down
Account; Application of Buy-Down Funds...............69
ARTICLE IV
SERVICER'S CERTIFICATE
Section 4.01
Servicer's
Certificate........................................69
ARTICLE V
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION
Section 5.01
Distributions.................................................70
Section 5.02
Priorities of
Distributions...................................70
Section 5.03
Allocation of
Losses..........................................75
Section 5.04
Statements to
Certificateholders..............................77
Section 5.05 Tax
Returns and Reports to Certificateholders.................80
Section 5.06 Tax
Matters Person............................................81
Section 5.07 Rights of
the Tax Matters Person in Respect of the
Trustee......................................................81
Section 5.08 REMIC
Related Covenants.......................................81
ARTICLE VI
THE CERTIFICATES
Section 6.01 The
Certificates..............................................82
Section 6.02
Registration of Transfer and Exchange of
Certificates.........83
Section 6.03
Mutilated, Destroyed, Lost or Stolen
Certificates.............87
(ii)
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Section 6.04 Persons
Deemed Owners.........................................87
ARTICLE VII
THE DEPOSITOR AND THE SERVICER
Section 7.01 Respective Liabilities of the Depositor and the
Servicer......87
Section 7.02 Merger or Consolidation of the Depositor or the
Servicer......87
Section 7.03 Limitation on Liability of the Depositor, the
Servicer
and Others...................................................88
Section 7.04 Depositor
and Servicer Not to Resign..........................89
Section 7.05
Assignment or Delegation of Duties by the
Servicer............89
ARTICLE VIII
DEFAULT
Section 8.01 Events of
Default.............................................89
Section 8.02 Remedies
of Trustee...........................................91
Section 8.03
Directions by Certificateholders and Duties of Trustee
During Event of Default......................................91
Section 8.04 Action
upon Certain Failures of the Servicer and upon
Event of Default.............................................91
Section 8.05 Trustee
to Act; Appointment of Successor......................92
Section 8.06
Notification to
Certificateholders............................93
ARTICLE IX
THE TRUSTEE
Section 9.01 Duties of
Trustee.............................................93
Section 9.02 Certain
Matters Affecting the Trustee.........................94
Section 9.03 Trustee
Not Liable for Certificates or Mortgage Loans.........95
Section 9.04 Trustee
May Own Certificates..................................96
Section 9.05
Eligibility Requirements for
Trustee..........................96
Section 9.06
Resignation and Removal of
Trustee............................97
Section 9.07 Successor
Trustee.............................................97
Section 9.08 Merger or
Consolidation of Trustee............................98
Section 9.09
Appointment of Co-Trustee or Separate
Trustee.................98
Section 9.10
Authenticating
Agents.........................................99
Section 9.11 Trustee's
Fees and Expenses..................................100
Section 9.12
Appointment of
Custodian.....................................101
Section 9.13 Paying
Agents................................................101
Section 9.14
Limitation of
Liability......................................102
Section 9.15 Trustee
May Enforce Claims Without Possession of
Certificates................................................102
Section 9.16 Suits for
Enforcement........................................102
Section 9.17 Waiver of
Bond Requirement...................................102
Section 9.18 Waiver of
Inventory, Accounting and Appraisal Requirement....102
(iii)
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ARTICLE X
TERMINATION
Section 10.01 Termination upon Purchase by the Depositor or
Liquidation
of All .Mortgage Loans......................................103
Section 10.02 Additional Termination
Requirements..........................104
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01
Amendment....................................................105
Section 11.02 Recordation of
Agreement.....................................106
Section 11.03 Limitation on Rights of
Certificateholders...................107
Section 11.04 Governing
Law................................................107
Section 11.05
Notices......................................................108
Section 11.06 Severability of
Provisions...................................108
Section 11.07 Certificates Nonassessable and Fully
Paid....................108
Section 11.08 Access to List of
Certificateholders.........................108
Section 11.09
Recharacterization...........................................109
Section 11.10
Insolvency...................................................109
Section 11.11 Regulation AB Compliance; Intent of Parties;
Reasonableness..............................................109
EXHIBITS
EXHIBITS
Exhibit A-1-A-1 -
Form of Face of Class
1-A-1 Certificate
Exhibit A-1-A-R -
Form of Face of Class
1-A-R Certificate
Exhibit A-2-A-1 -
Form of Face of Class
2-A-1 Certificate
Exhibit A-2-A-2 -
Form of Face of Class
2-A-2 Certificate
Exhibit A-2-A-3 -
Form of Face of Class
2-A-3 Certificate
Exhibit A-3-A-1 -
Form of Face of Class
3-A-1 Certificate
Exhibit A-4-A-1 -
Form of Face of Class
4-A-1 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
Exhibit D-1 -
Mortgage Loan Schedule
(Loan Group 1)
Exhibit D-2 -
Mortgage Loan Schedule
(Loan Group 2)
Exhibit D-3 -
Mortgage Loan Schedule
(Loan Group 3)
Exhibit D-4 -
Mortgage Loan Schedule
(Loan Group 4)
Exhibit E
- Request for Release
of Documents
Exhibit F
- Form of
Certification of Establishment of Account
Exhibit G-1 -
Form of Transferor
Certificate
Exhibit G-2A - Form I of Transferee
Certificate
(iv)
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Exhibit G-2B - Form II of Transferee
Certificate
Exhibit H
- Form of Transferee
Representation Letter for ERISA
Restricted Certificates
Exhibit I
- Form of Affidavit
Regarding Transfer of the Residual
Certificate
Exhibit J
- Contents of
Servicing File
Exhibit K
- Form of Special
Servicing Agreement
Exhibit L
- List of Recordation
States
Exhibit M
- Form of Initial
Certification of the Trustee
Exhibit N
- Form of Final
Certification of the Trustee
Exhibit O
- Form of
Sarbanes-Oxley Certification
Exhibit P
- Form of Trustee's
Certification
Exhibit Q
- Servicing
Criteria
Exhibit R-1 -
Additional Form 10-D
Information
Exhibit R-2 - Additional Form 10-K
Information
Exhibit R-3 -
Form 8-K
Information
(v)
<PAGE>
POOLING AND SERVICING AGREEMENT
THIS POOLING AND SERVICING AGREEMENT, dated [_______], 20 , is
hereby executed by and among BANC OF AMERICA MORTGAGE SECURITIES,
INC., as
depositor (together with its permitted successors and assigns, the
"Depositor"),
BANK OF AMERICA, NATIONAL ASSOCIATION, as servicer (together with
its permitted
successors and assigns, the "Servicer"), and WELLS FARGO BANK,
N.A., 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 "Lower-Tier
REMIC,"
respectively, and each, a "REMIC"). The Certificates (other than
the Class 1-A-R
Certificate) 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 R-L Interest shall constitute the "residual
interest" in the
Lower-Tier REMIC. The Class R-U Interest shall constitute the
"residual
interest" in the Upper-Tier REMIC. The Class 1-A-R Certificate
shall represent
ownership of the Class R-L Interest and the Class R-U Interest. The
Certificates
and the Uncertificated Lower-Tier Interests 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:
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================== =================== ============= ==============
============
Integral
Initial Class
Multiples
Certificate
Pass-Through Minimum
in
Excess
Classes
Balance
Rate
Denomination of Minimum
------------------ ------------------- ------------- --------------
------------
Class 1-A-1
$ (1)
$1,000
$1
------------------ ------------------- ------------- --------------
------------
Class 1-A-R
$ (1)
$100
N/A
------------------ ------------------- ------------- --------------
------------
Class 2-A-1
$ (2)
$1,000
$1
------------------ ------------------- ------------- --------------
------------
Class 2-A-2
$ (2)
$1,000
$1
------------------ ------------------- ------------- --------------
------------
Class 2-A-3
$ (2)
$1,000
$1
------------------ ------------------- ------------- --------------
------------
Class 3-A-1
$ (3)
$1,000
$1
------------------ ------------------- ------------- --------------
------------
Class 4-A-1
$ (4)
$1,000
$1
------------------ ------------------- ------------- --------------
------------
Class B-1
$ (5)
$25,000
$1
------------------ ------------------- ------------- --------------
------------
Class B-2
$ (5)
$25,000
$1
------------------ ------------------- ------------- --------------
------------
Class B-3
$ (5)
$25,000
$1
------------------ ------------------- ------------- --------------
------------
Class B-4
$ (5)
$25,000
$1
------------------ ------------------- ------------- --------------
------------
Class B-5
$ (5)
$25,000
$1
------------------ ------------------- ------------- --------------
------------
Class B-6
$ (5)
$25,000
$1
------------------ ------------------- ------------- --------------
------------
(1) Interest will accrue on these Certificates at a per annum rate
equal to the
Net WAC
for the Group 1 Mortgage Loans.
(2) Interest will accrue on these Certificates at a per annum rate
equal to the
Net WAC
for the Group 2 Mortgage Loans.
(3) Interest will accrue on these Certificates at a per annum rate
equal to the
Net WAC
for the Group 3 Mortgage Loans.
(4) Interest will accrue on these Certificates at a per annum rate
equal to the
Net WAC
for the Group 4 Mortgage Loans.
(5) Interest will accrue on these Certificates at a per annum rate
equal to the
weighted
average (based on the Group Subordinate Amount for each Loan
Group)
of (i)
with respect to Loan Group 1, the Net WAC for the Group 1
Mortgage
Loans,
(ii) with respect to Loan Group 2, the Net WAC for the Group 2
Mortgage
Loans, (iii) with respect to Loan Group 3, the Net WAC for the
Group 3
Mortgage Loans and (iv) with respect to Loan Group 4, the Net
WAC
for the
Group 4 Mortgage Loans.
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.
-2-
<PAGE>
Additional Form 10-D Information: As defined in Section
3.22(b).
Additional Form 10-K Information: As defined in Section
3.22(c).
Additional Servicer:
As defined in Section 3.02(e).
Adjusted Pool Amount: With respect to any Distribution Date and
Loan
Group, the Cut-off Date Pool Principal Balance of the Mortgage
Loans in such
Loan Group minus the sum of (i) all amounts in respect of principal
received in
respect of the Mortgage Loans in such Loan Group (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 (ii) the principal portion of all Realized Losses (other
than Debt
Service Reductions) incurred on such Mortgage Loans from the
Cut-off Date
through the end of the month preceding such Distribution Date.
Advance: A Periodic
Advance or a Servicing Advance.
Aggregate Subordinate
Percentage:
As to any Distribution
Date,
the aggregate
Class Certificate Balance of the Subordinate Certificates
divided by the aggregate Pool Stated Principal Balance for all Loan
Groups.
Agreement: This
Pooling and Servicing
Agreement together with
all amendments hereof and supplements hereto.
Amount Held for
Future Distribution: As to any Distribution Date and
Loan Group, 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 on
the Mortgage
Loans in such Loan Group in the month of such Distribution Date and
(ii)
payments which represent receipt of Monthly Payments on the
Mortgage Loans in
such Loan Group in respect of a Due Date or Due Dates subsequent to
the related
Due Date.
Ancillary Income: All prepayment premiums (if any), assumption
fees,
late payment charges and all other ancillary income and fees with
respect to the
Mortgage Loans.
Appraised Value: With respect to any Mortgaged Property, either
(i)
the lesser of (a) the appraised value determined in an appraisal
obtained by the
originator at origination of such Mortgage Loan and (b) the sales
price for such
property, except that, in the case of Mortgage Loans the proceeds
of which were
used to refinance an existing mortgage loan, the Appraised Value of
the related
Mortgaged Property is the appraised value thereof determined in an
appraisal
obtained at the time of refinancing, or (ii) the appraised value
determined in
an appraisal made at the request of a Mortgagor subsequent to
origination in
order to eliminate the Mortgagor's obligation to keep a Primary
Insurance Policy
in force.
Assignment of Mortgage: An individual assignment of the
Mortgage,
notice of transfer or equivalent instrument in recordable form,
sufficient under
the laws of the jurisdiction
-3-
<PAGE>
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.
Bank of America: Bank of America, National Association, a
national banking association, or its successor in interest.
Book-Entry
Certificate: Any Class
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 of Minnesota, each state in which the servicing
offices of
the Servicer are located or each state in which the Corporate Trust
Office is
located are required or authorized by law or executive order to be
closed.
Buy-Down Account: The separate Eligible Account or Accounts
created
and maintained by the Servicer pursuant to Section 3.23.
Buy-Down Agreement: An agreement governing the application of
Buy-Down Funds with respect to a Buy-Down Mortgage Loan.
Buy-Down Funds: Money advanced by a builder, seller or other
interested party to reduce a Mortgagor's monthly payment during the
initial
years of a Buy-Down Mortgage Loan.
Buy-Down Mortgage Loan: Any Mortgage Loan in respect of which,
pursuant to a Buy-Down Agreement, the monthly interest payments
made by the
related Mortgagor will be less than the scheduled monthly interest
payments on
such Mortgage Loan, with the resulting difference in interest
payments being
provided from Buy-Down Funds.
Calculated Principal Distribution: As defined in Section 5.03(d).
Certificate: Any of the Banc of America Mortgage Securities,
Inc.
Mortgage Pass-Through Certificates, Series 20 -[__] that are issued
pursuant to
this Agreement.
Certificate Account: The 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 "Wells Fargo Bank,
N.A., in
trust for registered holders of Banc of America Mortgage
Securities, Inc.
Mortgage Pass-Through Certificates, Series 20 -[__]." The
Certificate Account
shall be deemed to consist of five sub-accounts; one for each Group
and a fifth
sub-account referred to herein as the Upper-Tier Certificate
Sub-Account. Funds
in the Certificate Account shall be held in trust for the Holders
of the
Certificates of such Group 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
-4-
<PAGE>
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, Wells Fargo Bank, N.A.;
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.
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.
Certification: As
defined in Section 3.22(c).
Class: As to the Certificates, the Class 1-A-1, Class 1-A-R,
Class
2-A-1, Class 2-A-2, Class 2-A-3, Class 3-A-1, Class 4-A-1, 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 2-A-2 Loss Amount: With respect to any Distribution Date
after
the Senior Credit Support Depletion Date, the amount, if any, by
which the Class
Certificate Balance of the Class 2-A-2 Certificates would be
reduced as a result
of the allocation of any reduction pursuant to Section 5.03(b) to
such Class,
without regard to the operation of Section 5.03(e).
Class 2-A-3 Loss Allocation Amount: With respect to any
Distribution
Date after the Senior Credit Support Depletion Date, the lesser of
(a) the Class
Certificate Balance of the Class 2-A-3 Certificates with respect to
such
Distribution Date prior to any reduction for the Class 2-A-3 Loss
Allocation
Amount and (b) the Class 2-A-2 Loss Amount with respect to such
Distribution
Date.
-5-
<PAGE>
Class Certificate Balance: With respect to any Class and any date
of
determination, and subject to Section 5.03(g), the Initial Class
Certificate
Balance of such Class minus the sum of (i) all distributions of
principal made
with respect thereto, (ii) all reductions in Class Certificate
Balance
previously allocated thereto pursuant to Section 5.03(b) and (iii)
in the case
of the Class 2-A-3 Certificates, any reduction allocated thereto
pursuant to
Section 5.03(e) plus the sum of (i) all increases in Class
Certificate Balance
previously allocated thereto pursuant to Section 5.03(b) and (ii)
in the case of
the Class 2-A-3 Certificates, any increases allocated thereto
pursuant to
Section 5.03(e).
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."
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:
[_______], 20 .
Code: The Internal
Revenue Code of 1986, as amended.
Compensating Interest: With respect to each Distribution Date,
the
least of (a) the aggregate Servicing Fee for such Distribution Date
(before
giving effect to any reduction pursuant to Section 3.17), (b) the
Prepayment
Interest Shortfall for such Distribution Date and (c) one-twelfth
of [___]% of
the Pool Stated Principal Balances of the Loan Groups. To the
extent that the
aggregate Prepayment Interest Shortfall for a Distribution Date
exceeds
Compensating Interest, the Compensating Interest for such
Distribution Date
shall be allocated among the Loan Groups in proportion to the
respective
Prepayment Interest Shortfalls relating to such Loan Groups.
Conversion Date: The date on which a Mortgage Loan becomes a
Converted Mortgage Loan.
Converted Mortgage Loan: Any Mortgage Loan as to which the
related
Mortgagor has exercised its option pursuant to the related Mortgage
Note to
convert the adjustable rate of interest on such Mortgage Loan to a
fixed rate of
interest.
Co-op Shares: Shares issued by private non-profit housing
corporations.
Corporate Trust Office: The principal corporate trust office of
the
Trustee at which at any particular time its corporate trust
business with
respect to this Agreement is conducted, which office at the date of
the
execution of this instrument is located at 9062 Old Annapolis Road,
Columbia,
Maryland 21045-1951, Attention: Corporate Trust Services - BOAMS 20
-[__], and
for certificate transfer purposes is located at Sixth Street and
Marquette
Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services -
-6-
<PAGE>
BOAMS 20 -[__], or at such other address as the Trustee may
designate from time
to time by notice to the Certificateholders, the Depositor and the
Servicer.
Custodian: Initially, the Trustee, and thereafter the Custodian,
if
any, hereafter appointed by the Trustee pursuant to Section 9.12.
The Custodian
may (but need not) be the Trustee or any Person directly or
indirectly
controlling or controlled by or under common control of either of
them. Neither
the Servicer nor the Depositor, nor any Person directly or
indirectly
controlling or controlled by or under common control with any such
Person may be
appointed Custodian.
Customary Servicing Procedures: With respect to the Servicer,
procedures (including collection procedures) that the Servicer
customarily
employs and exercises in servicing and administering mortgage loans
for its own
account and which are in accordance with accepted mortgage
servicing practices
of prudent lending institutions servicing mortgage loans of the
same type as the
Mortgage Loans in the jurisdictions in which the related Mortgaged
Properties
are located.
Cut-off Date: [_____] 1, 20 .
Cut-off Date Pool Principal Balance: For each Loan Group the
aggregate of the Cut-off Date Principal Balances of the Mortgage
Loans in such
Loan Group which is $[___________] for Loan Group 1,
$[____________] for Loan
Group 2, $[___________] for Loan Group 3 and $[___________] for
Loan Group 4.
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 Section 2.02 or
2.04.
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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.
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: Banc of America Mortgage Securities, Inc., a
Delaware
corporation, 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.
Distribution Date:
The 25th day of each month beginning in
[____] 20 (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) Bank of America, 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
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<PAGE>
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 or Bank of America.
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(a).
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.
Events 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.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Distribution Date: The Distribution Date on which the
final
distribution in respect of the Certificates will be made pursuant
to Section
10.01.
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.
Form 8-K: As defined in Section 3.22(a).
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Form 8-K Information: As defined in Section 3.22(d).
Form 10-D: As defined in Section 3.22(a).
Form 10-K: As defined in Section 3.22(a).
Fractional Interest: As defined in Section 5.02(d).
Gross Margin: As to each Mortgage Loan, the fixed percentage
set
forth in the related Mortgage Note and indicated in the Mortgage
Loan Schedule
as the "Gross Margin," which percentage is added to the Index on
each Rate
Adjustment Date to determine (subject to rounding, the Periodic Cap
and the Rate
Ceiling) the Mortgage Interest Rate on such Mortgage Loan until the
next Rate
Adjustment Date.
Group: Any of Group 1, Group 2, Group 3 or Group 4.
Group 1: The Group 1-A Certificates.
Group 1 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 1 Mortgage Loans.
Group 1 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-1
hereto.
Group 2: The Group 2-A Certificates.
Group 2 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 2 Mortgage Loans.
Group 2 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-2
hereto.
Group 3: The Group 3-A Certificates.
Group 3 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 3 Mortgage Loans.
Group 3 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-3
hereto
Group 4: The Group 4-A Certificates.
Group 4 Lower-Tier Rate: A per annum rate equal to the Net WAC
for
the Group 4 Mortgage Loans.
Group 4 Mortgage Loan: Each Mortgage Loan listed on Exhibit D-4
hereto.
Group 1-A Certificates: Class 1-A-1 and Class 1-A-R
Certificates.
Group 2-A Certificates: Class 2-A-1, Class 2-A-2 and Class
2-A-3
Certificates.
Group 3-A Certificates: Class 3-A-1 Certificates.
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Group 4-A Certificates: Class 4-A-1 Certificates.
Group Subordinate Amount: With respect to any Distribution Date
and
any Loan Group, the excess of the Pool Stated Principal Balance for
such Loan
Group over the aggregate Class Certificate Balance of the Senior
Certificates of
the Related Group immediately prior to such date.
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.
Index: As to any Mortgage Loan and Rate Adjustment Date, a rate
per
annum that is defined to be the arithmetic mean of the London
interbank offered
rate quotations for one year U.S. Dollar-denominated deposits, as
published in
The Wall Street Journal and most recently available either (i) as
of the first
Business Day in the month preceding the month of the applicable
Rate Adjustment
Date or (ii) forty-five days before the applicable Rate Adjustment
Date or, in
the event that such index is no longer available, a substitute
index selected by
the Servicer in accordance with the terms of the related Mortgage
Note.
Initial Class Certificate Balance: As to each Class of
Certificates,
the Class Certificate Balance 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, 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.
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.
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<PAGE>
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 Group: Any of Loan Group 1, Loan Group 2, Loan Group 3 or
Loan
Group 4.
Loan Group 1: The Group 1 Mortgage Loans.
Loan Group 2: The Group 2 Mortgage Loans.
Loan Group 3: The Group 3 Mortgage Loans.
Loan Group 4: The Group 4 Mortgage Loans.
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 (other than amounts held
in respect
of the Upper-Tier Certificate Sub-Account), the insurance policies,
if any,
relating to a Mortgage Loan and property which secured a Mortgage
Loan and which
has been acquired by foreclosure or deed in lieu of
foreclosure.
MERS: As defined in Section 2.01(b)(iii).
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument creating
a
first lien on a Mortgaged Property securing a Mortgage Note or
creating a first
lien on a leasehold interest.
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Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan.
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, as adjusted from time to time in accordance with the
provisions of the
related Mortgage Note, which rate is (a) prior to the first Rate
Adjustment Date
for each such Mortgage Loan, the initial Mortgage Interest Rate for
such
Mortgage Loan indicated on the Mortgage Loan Schedule and (b) from
and after
such Rate Adjustment Date, the sum of the Index, as of the Rate
Adjustment Date
applicable to such Due Date, and the Gross Margin, rounded as set
forth in such
Mortgage Note, subject to the Periodic Cap and the Rate Ceiling
applicable to
such Mortgage Loan at any time during the life of such Mortgage
Loan.
Mortgage Loan
Purchase Agreement: The Mortgage Loan Purchase
Agreement, dated
[_______], 20 ,
between Bank of America, 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 or Convertible
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-1, Exhibit D-2, Exhibit D-3 and Exhibit D-4,
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 as of the Cut-off Date; (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;
(xv) the
Appraised Value; (xvi) the first Rate Adjustment Date; (xvii) the
Rate Ceiling;
(xviii) the Periodic Cap; (xix) the Gross Margin; (xx) whether such
Mortgage
Loan has an option to convert from an adjustable rate of interest
to a fixed
rate of interest; and (xxi) the closing date of such Mortgage Loan.
With respect
to the Mortgage Loans in each Loan Group 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
Interest 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.
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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 (i)
the Servicing Fee Rate and (ii) the Trustee Fee Rate.
Net WAC: As to any Loan Group and any Distribution Date, the
weighted average of the Net Mortgage Interest Rates of the Mortgage
Loans in
such Loan Group (based on the Stated Principal Balances of the
Mortgage Loans in
such Loan Group on the Due Date in the 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.
Offered Certificates: The Senior, 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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<PAGE>
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
0.00%
Original Subordinate Class 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
Section
2.02, 2.04 or 2.09.
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 or described 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 by
the Initial
Class Certificate Balance 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.
Periodic Cap: For each Mortgage Loan, the applicable limit on
adjustment of the Mortgage Interest Rate for each Rate Adjustment
Date specified
in the applicable Mortgage Note and designated as such in the
Mortgage Loan
Schedule.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest
by the United States, Freddie Mac, Fannie Mae or any agency or
instrumentality of the United States when such obligations are
backed by the full faith and credit of the
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United States; provided that such obligations of Freddie Mac or
Fannie Mae shall be limited to senior debt obligations and
mortgage
participation certificates other than investments in
mortgage-backed
or mortgage participation securities with yields evidencing
extreme
sensitivity to the rate of principal payments on the underlying
mortgages, which shall not constitute Permitted Investments
hereunder;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of
acquisition
thereof with a corporation incorporated under the laws of the
United
States or any state
thereof rated not lower than "[___]" by
[_______] and "[___]" by [_______];
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have
an
original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity
of
more than 365 days or a remaining maturity of more than 30
days)
denominated in United
States dollars of any U.S. depository
institution or trust company incorporated under the laws of the
United States or any state thereof, rated not lower than "[___]"
by
[_______] and "[___]" by [_______];
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of
the
United States or any state thereof which is rated not lower
than
"[___]" by [_______] and "[___]" by [_______];
(v) investments in money market funds (including funds of the
Trustee or its affiliates, or funds for which an affiliate of
the
Trustee acts as advisor, as well as funds for which the Trustee
and
its affiliates may receive compensation) rated either "[___]"
by
[_______] (if rated 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)
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<PAGE>
(except certain farmers' cooperatives described in Code Section
521), (iv) rural
electric and telephone cooperatives described in Code Section
1381(a)(2)(C), (v)
a Person with respect to whom the income on the Residual
Certificate is
allocable to a foreign permanent establishment or fixed base,
within the meaning
of an applicable income tax treaty, of such Person or any other
Person, and (vi)
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 the Residual Certificate to incur tax liability that
would not be
imposed other than on account of such transfer. The terms "United
States,"
"State" and "international organization" shall have the meanings
set forth in
Code Section 7701 or successor provisions.
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 1-A-R, Class B-4, Class B-5
and
Class B-6 Certificates.
Plan: As defined in Section 6.02(e).
Pool Distribution Amount: As to any Distribution Date and Loan
Group, the excess of (a) the sum of (i) the aggregate of (A) the
interest
portion of any Monthly Payment on a Mortgage Loan in such Loan
Group (net of the
Servicing Fee) and the principal portion of any Monthly Payment on
a Mortgage
Loan in such Loan Group 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 Loan Group and
Distribution
Date deposited to the Servicer Custodial Account pursuant to
Section
3.08(b)(vii); (ii) all Liquidation Proceeds received on the
Mortgage Loans in
such Loan Group during the preceding calendar month and deposited
to the
Servicer Custodial Account pursuant to Section 3.08(b)(iii); (iii)
all Principal
Prepayments received on the Mortgage Loans in such Loan Group
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 in such Loan Group or
Converted
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); (v) any other amounts in the
Servicer Custodial
Account deposited therein pursuant to Sections 3.08(b)(iv), (v) and
(ix) in
respect of such Distribution Date and such Loan Group; (vi) any
Reimbursement
Amount required to be included pursuant to Section 5.02(a) and
(vii) any
Recovery with respect to 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) in respect
of such Loan
Group and (ii) amounts permitted to be withdrawn from the
Certificate Account
pursuant to clause (ii) of Section 3.11(b) in respect of such Loan
Group.
Pool Stated Principal Balance: As to any Distribution Date and
Loan
Group, the aggregate Stated Principal Balance of all Mortgage Loans
in such Loan
Group that were Outstanding Mortgage Loans immediately following
the Due Date in
the month preceding the month in which such Distribution Date
occurs.
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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 Fannie Mae or
Freddie Mac.
Principal Amount: As to any Distribution Date and Loan Group,
the
sum of (i) the sum of (a) the principal portion of each Monthly
Payment due on
each Mortgage Loan in such Loan Group on the related Due Date, (b)
the Stated
Principal Balance, as of the date of repurchase, of each Mortgage
Loan in such
Loan Group that was repurchased by the Depositor pursuant to this
Agreement
received during the calendar month preceding the month of such
Distribution
Date, (c) any Substitution Adjustment Amount in connection with a
Defective
Mortgage Loan in such Loan Group received during the calendar month
preceding
the month of such Distribution Date, (d) any Liquidation Proceeds
allocable to
recoveries of principal of Mortgage Loans in such Loan Group 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
in such Loan
Group that became a Liquidated Mortgage Loan during the calendar
month preceding
the month of such Distribution Date, the amount of Liquidation
Proceeds
(excluding Excess Proceeds) allocable to principal received with
respect to such
Mortgage Loan during the calendar month preceding the month of such
Distribution
Date and (f) all Principal Prepayments on the Mortgage Loans in
such Loan Group
received during the calendar month preceding the month of such
Distribution
Date; and (ii) the Recovery for such Distribution Date.
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.
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, the portion of the Subordinate Principal
Distribution
Amounts allocable to such Class, equal to the sum of (i) the
product of the
amounts determined in accordance with clause (i) of the Subordinate
Principal
Distribution Amounts and a fraction, the numerator of which is the
related Class
Certificate Balance thereof and the denominator of which is the
aggregate Class
Certificate Balance of the Subordinate Certificates and (ii) if
such class is
not a Restricted Class, the product of the amounts determined in
accordance with
clause (ii) of the Subordinate Principal Distribution Amounts for
such
Distribution Date and a fraction, the numerator of which is the
related Class
Certificate Balance thereof and the denominator of which is the
aggregate Class
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Certificate Balance of the Subordinate Certificates that are not
Restricted
Classes. The Pro Rata Share of a Restricted Class shall be 0% with
respect to
clause (ii) hereof.
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 Fannie Mae or Freddie Mac.
Rate Adjustment Date: As to each Mortgage Loan, the Due Date on
which date an adjustment to the Mortgage Interest Rate of such
Mortgage Loan
becomes effective under the related Mortgage Note, which Due Date
is the date
set forth in the Mortgage Loan Schedule as the first Rate
Adjustment Date and
each subsequent anniversary thereof.
Rate Ceiling: The maximum per annum Mortgage Interest Rate
permitted
under the related Mortgage Note.
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.
Recovery: As to any Distribution Date and Loan Group, the sum of
all
amounts received during the calendar month preceding the month of
such
Distribution Date on each
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Mortgage Loan in such Loan Group subsequent to such Mortgage Loan
being
determined to be a Liquidated Mortgage Loan.
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.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be
amended from
time to time, and subject to such clarification and interpretation
as have been
provided by the Securities and Exchange Commission in the adopting
release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70
Fed. Reg.
1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Securities and
Exchange
Commission, or as may be provided by the Securities and Exchange
Commission or
its staff from time to time.
Reimbursement Amount: As defined in Section 2.04.
Related Group: For Loan Group 1, Group 1; for Loan Group 2, Group
2;
for Loan Group 3, Group 3; and for Loan Group 4, Group 4.
Related Loan Group: For Group 1, Loan Group 1; for Group 2,
Loan
Group 2; for Group 3, Loan Group 3; and for Group 4, Loan Group
4.
Relevant Servicing Criteria: The Servicing Criteria applicable
to
the various parties, as set forth on Exhibit Q attached hereto.
For
clarification purposes, multiple parties can have responsibility
for the same
Relevant Servicing Criteria. With respect to a Servicing Function
Participant
engaged by the Trustee or the Servicer, the term "Relevant
Servicing Criteria"
may refer to a portion of the Relevant Servicing Criteria
applicable to the
Servicer or the Trustee.
Relief Act: The Servicemembers Civil Relief Act, as it may be
amended from time to time.
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.
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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 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.
Reportable Event: As
defined in Section 3.22(d).
Repurchase Price: As to any Defective Mortgage Loan repurchased
on
any date pursuant to Section 2.02 or 2.04 and, as to any Converted
Mortgage Loan
repurchased on any date pursuant to Section 2.09, 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.
Residual Certificate:
The Class 1-A-R Certificate.
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).
Seller: Bank of
America, a national banking association, or its
successor in
interest, as seller of the Mortgage Loans under the Mortgage
Loan Purchase Agreement.
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Senior Certificates: The Class 1-A-1, Class 1-A-R, Class 2-A-1,
Class 2-A-2, Class 2-A-3, Class 3-A-1 and Class 4-A-1
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 and
Loan
Group, the percentage, carried six places rounded up, obtained by
dividing (i)
the aggregate Class Certificate Balance of the Senior Certificates
of the
Related Group immediately prior to such Distribution Date by (ii)
the Pool
Stated Principal Balance of such Loan Group immediately prior to
such
Distribution Date.
Senior Prepayment Percentage: For any Distribution Date and
Loan
Group during the seven years beginning on the first Distribution
Date, 100%. The
Senior Prepayment Percentage for any Distribution Date and Loan
Group occurring
on or after the seventh 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 for such Loan Group plus 70% of
the
Subordinate Percentage for such Loan Group for such Distribution
Date; for any
Distribution Date in the second year thereafter, the Senior
Percentage for such
Loan Group plus 60% of the Subordinate Percentage for such Loan
Group for such
Distribution Date; for any Distribution Date in the third year
thereafter, the
Senior Percentage for such Loan Group plus 40% of the Subordinate
Percentage for
such Loan Group for such Distribution Date; for any Distribution
Date in the
fourth year thereafter, the Senior Percentage for such Loan Group
plus 20% of
the Subordinate Percentage for such Loan Group for such
Distribution Date; and
for any Distribution Date in the fifth or later years thereafter,
the Senior
Percentage for such Loan Group for such Distribution Date, unless
(i) on any of
the foregoing Distribution Dates the Total Senior Percentage
exceeds the initial
Total Senior Percentage, in which case the Senior Prepayment
Percentage for Loan
Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 for such
Distribution Date
will once again equal 100%, (ii) on any Distribution Date before
the
Distribution Date occurring in [____] 20 , the Aggregate
Subordinate Percentage
for such Distribution Date is greater than or equal to twice the
initial
Aggregate Subordinate Percentage, in which case the Senior
Prepayment Percentage
for Loan Group 1 for such Distribution Date will equal the Senior
Percentage for
Loan Group 1 plus 50% of the Subordinate Percentage for Loan Group
1, the Senior
Prepayment Percentage for Loan Group 2 for such Distribution Date
will equal the
Senior Percentage for Loan Group 2 plus 50% of the Subordinate
Percentage for
Loan Group 2, the Senior Prepayment Percentage for such
Distribution Date will
equal the Senior Percentage for Loan Group 3 plus 50% of the
Subordinate
Percentage for Loan Group 3 and the Senior Prepayment Percentage
for Loan Group
4 for such Distribution Date will equal the Senior Percentage for
Loan Group 4
plus 50% of the Subordinate Percentage for Loan Group 4, or (iii)
on any
Distribution Date occurring on or after the Distribution Date in
[____] 20 , the
Aggregate Subordinate Percentage for such Distribution Date is
greater than or
equal to twice the initial Aggregate Subordinate Percentage, in
which case the
Senior Prepayment Percentage for Loan Group 1 for such Distribution
Date will
equal the Senior Percentage for Loan Group 1, the Senior Prepayment
Percentage
for Loan Group 2 for such Distribution Date will equal the Senior
Percentage for
Loan Group 2, the Senior Prepayment Percentage for Loan Group 3 for
such
Distribution Date will equal the Senior Percentage for Loan Group 3
and the
Senior Prepayment Percentage for Loan Group 4 for such Distribution
Date will
equal the Senior Percentage for Loan Group 4. Notwithstanding the
foregoing, no
decrease in the share of the applicable
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Subordinate Percentage (for calculating the applicable Senior
Prepayment
Percentage for any Loan Group) will occur and the Senior Prepayment
Percentage
for all Loan Groups will be calculated without regard to clause
(ii) or (iii) in
the preceding sentence unless both of the Senior Step Down
Conditions are
satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date
and Loan Group, the sum of (i) the Senior Percentage for such Loan
Group of the
amounts described in clauses (i)(a) through (d) of the definition
of "Principal
Amount" for such Distribution Date and Loan Group and (ii) the
Senior Prepayment
Percentage for such Loan Group of the amounts described in clauses
(i)(e) and
(f) and the amount described in clause (ii) of the definition of
"Principal
Amount" for such Distribution Date and Loan Group.
Senior Step Down Conditions: As of any Distribution Date as to
which
any decrease in the Senior Prepayment Percentage for any Loan Group
applies, (i)
the outstanding principal balance of all Mortgage Loans (including,
for this
purpose, any Mortgage Loans in foreclosure or any REO Property and
any Mortgage
Loan for which the Mortgagor has filed for bankruptcy after the
Closing Date)
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, 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 Class
Certificate
Balance set forth below:
Percentage of
Original Subordinate Class
Distribution Date Occurring
Certificate Balance
---------------------------
-------------------
[____] 20
through [_____] 20
[___]%
[____] 20
through [_____] 20
[___]%
[____] 20
through [_____] 20
[___]%
[____] 20
through [_____] 20
[___]%
[____] 20
through [_____] 20
[___]%
[____] 20 and
thereafter
[___]%
Servicer: Bank of America, a national banking association, or
its
successor in interest, in its capacity as servicer of the Mortgage
Loans, or any
successor servicer appointed as herein provided.
Servicer Advance Date: As to any Distribution Date, 11:30 a.m.,
Eastern time, on the Business Day immediately preceding such
Distribution Date.
Servicer Custodial Account: The separate Eligible Account or
Accounts created and maintained by the Servicer pursuant to Section
3.08(b).
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Servicer Custodial Account Reinvestment Income: For each
Distribution Date, all income and gains net of any losses realized
since the
preceding Distribution Date from Permitted Investments of funds in
the Servicer
Custodial Account.
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 Compensation: With respect to each Distribution Date,
the
sum of (i) the aggregate Servicing Fee for such Distribution Date
subject to
reduction as provided in Section 3.17, (ii) any Ancillary Income,
(iii) Excess
Proceeds for the preceding month and (iv) the Servicer Custodial
Account
Reinvestment Income for such Distribution Date.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time,
which as of
the Closing Date are listed on Exhibit Q hereto.
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. Such fee shall be payable monthly, computed on the
basis of the
same Stated Principal Balance and period respecting which any
related interest
payment on a Mortgage Loan is computed. The Servicer's right to
receive the
Servicing Fee is limited to, and payable solely from, the interest
portion
(including recoveries with respect to interest from Liquidation
Proceeds and
other proceeds, to the extent permitted by Section 3.11) of related
Monthly
Payments collected by the Servicer, or as otherwise provided under
Section 3.11.
Servicing Fee Rate: With respect to each Group 1 Mortgage Loan,
[___]% per annum, and with respect to each Group 2 Mortgage Loan,
Group 3
Mortgage Loan and Group 4 Mortgage Loan, [___]% per annum.
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 Function Participant: Any affiliate, third party vendor
or
Subservicer engaged by the Servicer or the Trustee that is
participating in the
servicing function with respect to the Mortgage Loans, within the
meaning of
Item 1122 of Regulation AB.
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.
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Servicing Transfer Costs: All reasonable costs and expenses
incurred
by the Trustee in connection with the transfer of servicing from a
predecessor
servicer, including, without limitation, any costs or expenses
associated with
the complete transfer of all servicing data and the completion,
correction or
manipulation of such servicing data as may be required by the
Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to
enable the
Trustee to service the Mortgage Loans properly and effectively.
Similar Law: As defined in Section 6.02(e).
Sponsor: Bank of America, National Association.
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 Balance Ratio: As of any date of determination, the
ratio among the principal balances of the Class 1-LS Interest,
Class 2-LS
Interest, Class 3-LS Interest and the Class 4-LS Interest, equal to
the ratio
among the Group Subordinate Amount of Loan Group 1, the Group
Subordinate Amount
of Loan Group 2, the Group Subordinate Amount for Loan Group 3 and
the Group
Subordinate Amount of Loan Group 4.
Subordinate Certificates: The Class B-1, Class B-2, Class B-3,
Class
B-4, Class B-5 and Class B-6 Certificates.
Subordinate Percentage: As of any Distribution Date and Loan
Group,
100% minus the Senior Percentage for such Loan Group for such
Distribution Date.
Subordinate Prepayment Percentage: As to any Distribution Date
and
Loan Group, 100% minus the Senior Prepayment Percentage for such
Loan Group for
such Distribution Date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount equal to the sum of (i)
the
Subordinate Percentage for such Loan Group of all amounts described
in clauses
(i)(a) through (d) of the definition of "Principal Amount" for such
Distribution
Date and Loan Group and (ii) the Subordinate Prepayment Percentage
of the
amounts described in clauses (i)(e) and (f) and the amount
described in clause
(ii) of the definition of "Principal Amount" for such Distribution
Date and Loan
Group.
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
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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 Gross Margin equal to that of the
Defective Mortgage
Loan; (v) have a Periodic Cap and Rate Ceiling equal to that of the
Defective
Mortgage Loan; (vi) have the same Index and frequency of mortgage
interest rate
adjustment as the Deleted Mortgage Loan; (vii) have a remaining
term to maturity
not greater than (and not more than one year less than) that of the
Defective
Mortgage Loan; and (viii) comply with each Mortgage Loan
representation and
warranty set forth in this 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
ss. 1.860F-4(d) and Treasury Regulation ss. 301.6231(a)(7)-1.
Total 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 immediately
prior to such
Distribution Date by the aggregate Pool Stated Principal Balance of
all Loan
Groups for such Distribution Date.
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, any other Required Insurance Policy and
the right to
receive amounts, if any, payable on behalf of any Mortgagor from
the Buy-Down
Account relating to any Buy-Down Mortgage Loan. The Buy-Down
Account shall not
be part of the Trust Estate.
Trustee: Wells Fargo
Bank, N.A., and any
successors-in-interest
and, if a successor trustee is appointed hereunder, such successor, as
trustee.
Trustee Fee: As to any Distribution Date and Loan Group, an
amount
equal to one-twelfth of the Trustee Fee Rate multiplied by the
aggregate Stated
Principal Balance of the
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Mortgage Loans in the Related Loan Group 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 1-L Interest, Class 1-LS Interest, Class 2-L Interest,
Class 2-LS
Interest, Class 3-L Interest, Class 3-LS Interest, Class 4-L
Interest and Class
4-LS Interest are Uncertificated Lower-Tier Interests.
Underwriting
Guidelines: The
underwriting
guidelines of Bank of
America.
Unscheduled Principal Amount: As to any Distribution Date and
Loan
Group, the sum of (a) with respect to each Mortgage Loan in such
Loan Group that
became a Liquidated Mortgage Loan during the calendar month
preceding the month
of such Distribution Date, the amount of Liquidation Proceeds
(excluding Excess
Proceeds) allocable to principal received with respect to such
Mortgage Loan
during the calendar month preceding the month of such Distribution
Date and (b)
all Principal Prepayments on the Mortgage Loans in such Loan Group
received
during the calendar month preceding the month of such Distribution
Date.
Upper-Tier Certificate Sub-Account: The sub-account of the
Certificate Account designated 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 deemed to be held in the
Upper-Tier
Certificate Sub-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) 1% of all Voting Rights shall be allocated to
the Holder of
the Residual Certificate and (b) 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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Section 1.03 Fiscal Year. The fiscal year of the Trust will be
the
calendar year.
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. It is agreed and understood by
the parties
hereto that it is not intended that any mortgage loan be included
in the Trust
that is a "High-Cost Home Loan" as defined in any of (i) the New
Jersey Home
Ownership Act effective November 27, 2003, (ii) the New Mexico Home
Loan
Protection Act, effective January 1, 2004, (iii) the Massachusetts
Predatory
Home Loan Practices Act effective November 7, 2004 or (iv) the
Indiana Home Loan
Practices Act, effective January 1, 2005.
(b) In connection with such transfer and assignment, the
Depositor
shall deliver or cause 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 Wells Fargo Bank,
N.A., as
trustee for the holders of the Banc of America Mortgage
Securities, Inc. Mortgage Pass-Through Certificates, Series 20
-[__],
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 "Wells Fargo Bank, N.A., as trustee
for
the
holders of the Banc of America Mortgage Securities, Inc.
Mortgage
Pass-Through Certificates, Series 20 -[__]" (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
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<PAGE>
and
complete copy of the original recorded intervening assignments
of
Mortgage
(each such assignment, when duly and validly completed, to be
in
recordable
form and sufficient to effect the assignment of and transfer to
the
assignee thereof, under the Mortgage to which the assignment
relates);
provided
that, if the related Mortgage has not been returned from the
applicable
public recording office, such Assignment of Mortgage may
exclude
the information to be provided by the recording office; and
provided,
further, if the related Mortgage has been recorded in the name
of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its
designee,
no Assignment of Mortgage in favor of the Trustee will be
required
to be prepared or delivered and instead, the Servicer shall
take
all
actions as are necessary to cause the Trust to be shown as the
owner
of the
related Mortgage Loan on the records of MERS for purposes of
the
system of
recording transfers of beneficial ownership of mortgages
maintained
by MERS;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, if any, with evidence of recording thereon, if any;
(v) any of (A) the original or duplicate original mortgagee
title
insurance
policy and all riders thereto; (B) a title search showing no
lien
(other than standard exceptions of the type described in
Section
2.04(viii)) on the Mortgaged Property senior to the lien of the
Mortgage
or (C) an
opinion of counsel of the type customarily rendered in the
applicable
jurisdiction in lieu of a title insurance policy;
(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;
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<PAGE>
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) Executed UCC-3 financing statements or other appropriate
UCC financing statements required by state law, evidencing a
complete and unbroken line from the mortgagee to the Trustee
with
evidence of recording thereon (or in a form suitable for
recordation).
provided, however, that on the Closing Date, with respect to item
(iii), the
Depositor has delivered to the Trustee a copy of such Assignment of
Mortgage in
blank and has caused the Servicer to retain the completed
Assignment of Mortgage
for recording as described below, unless such Mortgage has been
recorded in the
name of MERS or its designee. In addition, if the Depositor is
unable to deliver
or cause the delivery of any original Mortgage Note due to the loss
of such
original Mortgage Note, the Depositor may deliver a copy of such
Mortgage Note,
together with a lost note affidavit, and shall thereby be deemed to
have
satisfied the document delivery requirements of this Section
2.01(b).
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, if any, (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, if
any, 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
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proper form for recording in the appropriate public office for real
property
records within 30 days of the Closing Date and (ii) at the
Depositor's expense,
cause to be delivered for recording in the appropriate public
office for real
property records the Assignments of the Mortgages to the Trustee,
except that,
with respect to any Assignment of a Mortgage as to which the
Servicer has not
received the information required to prepare such assignment in
recordable form,
the Servicer's obligation to do so and to deliver the same for such
recording
shall be as soon as practicable after receipt of such information
and in any
event within 30 days after the receipt thereof and, no recording of
an
Assignment of Mortgage will be required in a state if either (i)
the Depositor
furnishes to the Trustee an unqualified Opinion of Counsel
reasonably acceptable
to the Trustee to the effect that recordation of such assignment is
not
necessary under applicable state law to preserve the Trustee's
interest in the
related Mortgage Loan against the claim of any subsequent
transferee of such
Mortgage Loan or any successor to, or creditor of, the Depositor or
the
originator of such Mortgage Loan or (ii) the recordation of an
Assignment of
Mortgage in such state is not required by either Rating Agency in
order to
obtain the initial ratings on the Certificates on the Closing Date.
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.
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. Upon execution and delivery of this document,
the Trustee
shall deliver or cause the Custodian to deliver to the Depositor,
the Trustee
and the Servicer a certification in the form of Exhibit M hereto
(the "Initial
Certification") to the effect that, except as may be specified in a
list of
exceptions attached thereto, it has received the original Mortgage
Note relating
to each of the Mortgage Loans listed on the Mortgage Loan
Schedule.
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, and shall deliver to the Depositor, the Trustee
and the
Servicer a certification in the form of Exhibit N hereto (the
("Final
Certification") to the effect that, as to each Mortgage Loan listed
in the
Mortgage Loan Schedule, except as may be specified in a list of
exceptions
attached to such Final Certification, such Mortgage File contains
all of the
items required to be delivered pursuant to Section 2.01(b).
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
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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 based solely upon the review of items (i)
and (xi) in the
definition of Mortgage Loan Schedule. Neither the Trustee nor the
Custodian
shall have any responsibility for determining whether any document
is valid and
binding, whether the text of any assignment or endorsement is in
proper or
recordable form, whether any document has been recorded in
accordance with the
requirements of any applicable jurisdiction, or whether a blanket
assignment is
permitted in any applicable jurisdiction. The Depositor hereby
covenants and
agrees that it will promptly correct or cure such defect within 90
days from the
date it was so notified of such defect and, if the Depositor does
not correct or
cure such defect within such period, the Depositor will either (a)
substitute
for the related Mortgage Loan a Substitute Mortgage Loan, which
substitution
shall be accomplished in the manner and subject to the conditions
set forth
below or (b) purchase such Mortgage Loan from the Trustee at the
Repurchase
Price for such Mortgage Loan; provided, however, that in no event
shall such a
substitution occur more than two years from the Closing Date;
provided, further,
that such substitution or repurchase shall occur within 90 days of
when such
defect was discovered if such defect will cause the Mortgage Loan
not to be a
"qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code.
With respect to each Substitute Mortgage Loan the Depositor
shall
deliver to the Trustee, for the benefit of the Certificateholders,
the Mortgage
Note, the Mortgage, the related Assignment of Mortgage (except for
any Mortgage
which has been recorded in the name of MERS or its designee), and
such other
documents and agreements as are otherwise required by Section 2.01,
with the
Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No
substitution is permitted to be made in any calendar month after
the
Determination Date for such month. Monthly Payments due with
respect to any such
Substitute Mortgage Loan in the month of substitution shall not be
part of the
Trust Estate and will be retained by the Depositor. For the month
of
substitution, distributions to Certificateholders will include the
Monthly
Payment due for such month on any Defective Mortgage Loan for which
the
Depositor has substituted a Substitute Mortgage Loan.
The Servicer shall amend the Mortgage Loan Schedule for the
benefit
of the Certificateholders to reflect the removal of each Mortgage
Loan that has
become a Defective Mortgage Loan and the substitution of the
Substitute Mortgage
Loan or Loans and the Servicer shall deliver the amended Mortgage
Loan Schedule
to the Trustee and the Custodian. Upon such substitution, each
Substitute
Mortgage Loan shall be subject to the terms of this Agreement in
all respects,
and the Depositor shall be deemed to have made to the Trustee with
respect to
such Substitute Mortgage Loan, as of the date of substitution,
the
representations and warranties made pursuant to Section 2.04. Upon
any such
substitution and the deposit to the Servicer Custodial Account of
any required
Substitution Adjustment Amount (as described in the next paragraph)
and receipt
of a Request for Release, the Trustee shall release, or shall
direct the
Custodian to release, the Mortgage File relating to such Defective
Mortgage Loan
to the Depositor and shall execute and deliver at the Depositor's
direction such
instruments of transfer or assignment
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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 in a Loan Group as of the date of substitution is
less than the
aggregate Stated Principal Balance of all such Defective Mortgage
Loans in such
Loan Group (after application of the principal portion of the
Monthly Payments
due in the month of substitution) (the "Substitution Adjustment
Amount" for such
Loan Group) plus an amount equal to the aggregate of any
unreimbursed Advances
with respect to such Defective Mortgage Loans shall be deposited
into the
Servicer Custodial Account by the Depositor on or before the
Remittance Date for
the Distribution Date in the month succeeding the calendar month
during which
the related Mortgage Loan is required to be purchased or replaced
hereunder.
The Trustee shall retain or shall cause the Custodian to retain
possession and custody of each Mortgage File in accordance with and
subject to
the terms and conditions set forth herein. The Servicer shall
promptly deliver
to the Trustee, upon the execution or, in the case of documents
requiring
recording, receipt thereof, the originals of such other documents
or instruments
constituting the Mortgage File as come into the Servicer's
possession from time
to time.
It is understood and agreed that the obligation of the Depositor
to
substitute for or to purchase any Mortgage Loan which does not meet
the
requirements of Section 2.01 shall constitute the sole remedy
respecting such
defect available to the Trustee and any Certificateholder against
the Depositor.
The Trustee or the Custodian, on behalf of the Trustee, shall
be
under no duty or obligation (i) to inspect, review or examine any
such
documents, instruments, certificates or other papers to determine
that they are
genuine, enforceable, or appropriate for the represented purpose or
that they
are other than what they purport to be on their face or (ii) to
determine
whether any Mortgage File should include any of the documents
specified in
Section 2.01(b)(iv), (vi), (vii), (viii) and (ix). In connection
with making the
certifications required hereunder, to the extent a title search or
opinion of
counsel has been provided in lieu of a title policy for any
Mortgage Loan, the
Trustee shall only be responsible for confirming that a title
search or opinion
of counsel has been provided for such Mortgage Loan and shall not
be deemed to
have certified that the content of such title search or opinion of
counsel is
sufficient to meet the requirements of Section 2.01(b)(v).
Section 2.03 Representations and Warranties 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,
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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 creditors' rights generally or
creditors
of
national banks 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 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. Upon discovery by any of the
Depositor,
the Servicer or the Trustee of a breach of any of the
representations or
warranties set forth in this Section 2.03, the party discovering
such breach
shall give prompt written notice to the other parties.
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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.
(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
Fannie Mae
or Freddie Mac. The Mortgage obligates the Mortgagor thereunder
to
maintain all such insurance at the Mortgagor's cost and expense,
and on
the
Mortgagor's failure to do so, authorizes the holder of the Mortgage
to
maintain
such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
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<PAGE>
(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, all applicable
predatory
and abusive lending laws, equal credit opportunity or
disclosure
laws
applicable to the origination and servicing of Mortgage Loan
have
been complied
with.
(vii) The Mortgage has not been satisfied, canceled, subordinated
or
rescinded,
in whole or in part (other than as to Principal Prepayments in
full which
may have been received prior to the Closing Date), and the
Mortgaged
Property has not been released from the lien of the Mortgage,
in
whole or
in part, nor has any instrument been executed that would effect
any such
satisfaction, cancellation, subordination, rescission or
release.
(viii) The
Mortgage is a valid, existing and enforceable first lien
on the
Mortgaged Property, including all improvements on the Mortgaged
Property
subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions
and
restrictions, rights of way, easements and other matters of the
public
record as
of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in the lender's
title
insurance
policy delivered to the originator of the Mortgage Loan and
which do
not adversely affect the Appraised Value of the Mortgaged
Property,
(C) if the Mortgaged Property consists of Co-op Shares, any
lien
for amounts due
to the cooperative housing corporation for unpaid
assessments or charges or any lien of any assignment of rents
or
maintenance expenses secured by the real property owned by the
cooperative
housing
corporation, and (D) other matters to which like properties are
commonly
subject which do not materially interfere with the benefits of
the
security intended to be provided by the Mortgage or the use,
enjoyment,
value or marketability of the related Mortgaged Property. Any
security
agreement, chattel mortgage or equivalent document related to
and
delivered
in connection with the Mortgage Loan establishes and creates a
valid,
existing and enforceable first lien and first priority security
interest on the
property described therein and the Depositor has the full
right to
sell and assign the same to the Trustee.
(ix) The Mortgage Note and the related Mortgage are genuine and
each
is the
legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms except as enforceability
may be
limited by
(A) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the
enforcement
of the
rights of creditors and (B) general principles of equity,
whether
enforcement is sought in a proceeding in equity or at law.
(x) All parties to the Mortgage Note and the Mortgage had legal
capacity
to enter into the Mortgage Loan and to execute and deliver the
Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage
have been
duly and properly executed by such parties.
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<PAGE>
(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) (A) The Mortgage Loan is covered by an ALTA lender's
title
insurance
policy, acceptable to Fannie Mae or Freddie Mac, issued by a
title
insurer acceptable to Fannie Mae or Freddie Mac and qualified to
do
business
in the jurisdiction where the Mortgaged Property is located,
insuring
(subject to the exceptions contained in (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, (B)
a
title
search has been done showing no lien (other than the exceptions
contained
in (viii)(A) and (B) above) on the related Mortgaged Property
senior to
the lien of the Mortgage or (C) in the case of any Mortgage
Loan
secured by
a Mortgaged Property located in a jurisdiction where such
policies
are generally not available, an opinion of counsel of the type
customarily rendered in such jurisdiction in lieu of title
insurance is
instead
received. For each Mortgage Loan covered by a title insurance
policy (x)
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 and
(y) no
claims
have been made under such lender's title insurance policy, and
the
Depositor
has not done, by act or omission, anything which would impair
the
coverage of such lender's title insurance policy.
(xiv) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and
no event
which,
with the passage of time or with notice and the expiration of
any
grace or
cure period, would constitute a default, breach, violation or
event of
acceleration, and the Seller has not waived any default,
breach,
violation
or event of acceleration.
(xv) As of the date of origination of the Mortgage Loan, there
had
been no
mechanics' or similar liens or claims filed for work, labor or
material
(and no rights are outstanding that under law could give rise
to
such lien)
affecting the related 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
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<PAGE>
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 savings and loan
association, savings bank, commercial bank, credit union,
insurance
company,
or similar institution which is supervised and examined by a
federal or
state authority, or by a mortgagee approved by the Secretary of
Housing
and Urban Development pursuant to sections 203 and 211 of the
National
Housing Act.
(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 20 to 30-year adjustable 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. The Mortgaged Property is in good repair and is
undamaged
by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or
other casualty, so as to affect adversely the value of the
Mortgaged
Property as security for the Mortgage Loan or the use for which
the
premises were intended.
(xx) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to render the rights and remedies of
the
holder
thereof adequate for the realization against the Mortgaged
Property
of the
benefits of the security provided thereby, including (A) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and
(B)
otherwise by judicial foreclosure. To the best of the
Depositor's
knowledge,
following the date of origination of the Mortgage Loan, the
Mortgaged
Property has not been subject to any bankruptcy proceeding or
foreclosure proceeding and the Mortgagor has not filed for
protection
under
applicable bankruptcy laws. There is no homestead or other
exemption
or right
available to the Mortgagor or any other person which would
interfere
with the right to sell the Mortgaged Property at a trustee's
sale or
the right to foreclose the Mortgage.
(xxi) The Mortgage Note and Mortgage are on forms acceptable to
Fannie Mae
or Freddie Mac.
(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) Each appraisal of the related Mortgaged Property is in
a
form
acceptable to Fannie Mae or Freddie Mac and such appraisal
complies
with the
requirements of
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<PAGE>
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 more than [___]%, [___]%, [___]% and [___]% (by Cut-off
Date
Principal Balance) of the Group 1, Group 2, Group 3 and Group 4
Mortgage
Loans, respectively, are Buy-Down Mortgage Loans.
(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 Primary Insurance Policy to which any Mortgage Loan
is
subject,
will be issued by an insurer acceptable to Fannie Mae or
Freddie
Mac, which
insures that portion of the Mortgage Loan in excess of the
portion of
the Appraised Value of the Mortgaged Property required by
Fannie
Mae. All provisions of such Primary Insurance Policy have been
and
are being
complied with, such policy is in full force and effect, and all
premiums
due thereunder have been paid. Any Mortgage subject to any such
Primary
Insurance Policy obligates the Mortgagor thereunder to maintain
such
insurance and to pay all premiums and charges in connection
therewith
at least
until Loan-to-Value Ratio of such Mortgage Loan is reduced to
less than
80%. The Mortgage Interest Rate for the Mortgage Loan does not
include
any such insurance premium.
(xxviii) To the best of the Depositor's knowledge as of the date
of
origination of the Mortgage Loan, (A) the Mortgaged Property is
lawfully
occupied
under applicable law, (B) all inspections, licenses and
certificates required to be made or issued with respect to all
occupied
portions
of the Mortgaged Property and, with respect to the use and
occupancy
of the same, including but not limited to certificates of
occupancy,
have been made or obtained from the appropriate authorities and
(C) no
improvement located on or part of the Mortgaged Property is in
violation
of any zoning law or regulation.
(xxix) The Assignment of Mortgage (except with respect to any
Mortgage
that has been recorded in the name of MERS or its designee) is
in
recordable
form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(xxx) All payments required to be made prior to the Cut-off Date
for
such
Mortgage Loan under the terms of the Mortgage Note have been made
and
no
Mortgage
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<PAGE>
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 Fannie Mae and Freddie Mac. The consolidated
principal
amount does not exceed the original principal amount of the
Mortgage
Loan.
(xxxiv) The Mortgage Loan was underwritten in accordance with
the
applicable
Underwriting Guidelines in effect at the time of origination
with
exceptions thereto exercised in a reasonable manner.
(xxxv) If the Mortgage Loan is secured by a long-term
residential
lease, (1)
the lessor under the lease holds a fee simple interest in the
land; (2)
the terms of such lease expressly permit the mortgaging of the
leasehold
estate, the assignment of the lease without the lessor's
consent
and the
acquisition by the holder of the Mortgage of the rights of the
lessee
upon foreclosure or assignment in lieu of foreclosure or
provide
the holder
of the Mortgage with substantially similar protections; (3) the
terms of
such lease do not (a) allow the termination thereof upon the
lessee's
default without the holder of the Mortgage being entitled to
receive
written notice of, and opportunity to cure, such default, (b)
allow the
termination of the lease in the event of damage or destruction
as long as
the Mortgage is in existence, (c) prohibit the holder of the
Mortgage
from being insured (or receiving proceeds of insurance) under
the
hazard
insurance policy or policies relating to the Mortgaged Property
or
(d) permit
any increase in the rent other than pre-established increases
set forth
in the lease; (4) the original term of such lease is 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.
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<PAGE>
(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
the
meaning of
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.
(xl) No Mortgage Loan is a "high cost" loan as defined under
any
federal,
state or local law applicable to such Mortgage Loan at the time
of its
origination.
(xli) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable
(as such terms are defined in the then-current S&P's
LEVELS(R)
Glossary
which is now Version 5.6(c), Appendix E) and no Mortgage Loan
originated
on or after October 1, 2002 through March 6, 2003 is governed
by the
Georgia Fair Lending Act.
(xlii) No Mortgage Loan is subject to the provisions of the
Home
Ownership
and Equity Protection Act of 1994, as amended.
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.
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<PAGE>
Upon discovery by any of the Depositor, the Servicer, the Trustee
or
the Custodian that any of the representations and warranties set
forth in this
Section 2.04 is not accurate (referred to herein as a "breach") and
that such
breach materially and adversely affects the interests of the
Certificateholders
in the related Mortgage Loan, the party discovering such breach
shall give
prompt written notice to the other parties (any Custodian being so
obligated
under a Custodial Agreement); provided that any such breach that
causes the
Mortgage Loan not to be a "qualified mortgage" within the meaning
of Section
860G(a)(3) of the Code shall be deemed to materially and adversely
affect the
interests of the Certificateholders. Within 90 days of its
discovery or its
receipt of notice of any such breach, the Depositor shall cure such
breach in
all material respects or shall either (i) repurchase the Mortgage
Loan or any
property acquired in respect thereof from the Trustee at a price
equal to the
Repurchase Price or (ii) if within two years of the Closing Date,
substitute for
such Mortgage Loan in the manner described in Section 2.02;
provided that if the
breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as
defined in Section 860G(a)(3) of the Code, any such repurchase or
substitution
must occur within 90 days from the date the breach was discovered.
In addition
to the foregoing, if a breach of the representations set forth in
clauses (vi)
or (xli) of this Section 2.04 occurs as a result of a violation of
an applicable
predatory or abusive lending law, the Depositor shall reimburse the
Trust for
all costs or damages incurred by the Trust as a result of the
violation of such
law (such amount, the "Reimbursement Amount"). The Repurchase Price
of any
repurchase described in this paragraph, the Substitution Adjustment
Amount, if
any, and any Reimbursement Amount shall be deposited in the
Servicer Custodial
Account. It is understood and agreed that, except with respect to
the second
preceding sentence, 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 REMICs. The
Depositor
hereby designates the Classes of Senior Certificates (other than
the Class 1-A-R
Certificate) and the Classes of Subordinate Certificates as
"regular interests"
and the Class R-U Interest 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 1-L
Interest,
Class 1-LS Interest, Class 2-L Interest, Class 2-LS Interest, Class
3-L
Interest, Class 3-LS Interest, Class 4-L Interest and Class 4-LS
Interest as
classes of "regular interests" and the Class R-L Interest 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
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<PAGE>
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.
Section 2.09 Repurchase of Converted Mortgage Loans. The
Depositor
shall repurchase from the Trust any Converted Mortgage Loan prior
to the first
Due Date for such Mortgage Loan following the Conversion Date. Any
such
repurchase shall be at the Repurchase Price. The Repurchase Price
for any
repurchased Converted Mortgage Loan shall be deposited by the
Depositor in the
Servicer Custodial Account and, upon receipt by the Trustee of
written
notification of any such deposit signed by an officer of the
Depositor and a
Request for Release, the Trustee shall release to the Depositor the
related
Mortgage File and shall execute and deliver such instruments of
transfer or
assignment prepared by the Depositor, in each case without
recourse, as shall be
necessary to vest in the Depositor legal and beneficial ownership
of such
Converted Mortgage Loan.
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
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<PAGE>
and all instruments or agreements of satisfaction, cancellation,
default,
assumption, modification, discharge, partial or full release, and
all other
comparable instruments and agreements, with respect to the Mortgage
Loans it
services, and with respect to the related Mortgaged Properties held
for the
benefit of the Certificateholders. To the extent that the Servicer
is not
permitted to execute and deliver such documents pursuant to the
preceding
sentence, 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. 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.
Alternatively, upon the
request of the Servicer, the Trustee shall execute and deliver to
the Servicer
any additional 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.
In accordance with the standards of the preceding paragraph,
the
Servicer shall advance or cause to be advanced funds as necessary
for the
purpose of effecting the payment of taxes and assessments on the
Mortgaged
Properties relating to the Mortgage Loans it services, which
Servicing Advances
shall be reimbursable in the first instance from related
collections from the
Mortgagors pursuant to Section 3.09, and further as provided in
Section 3.11.
The costs incurred by the Servicer, if any, in effecting the timely
payments of
taxes and assessments on the Mortgaged Properties and related
insurance premiums
shall not, for the purpose of calculating monthly distributions to
the
Certificateholders, be added to the Stated Principal Balances of
the related
Mortgage Loans, notwithstanding that the terms of such Mortgage
Loans so permit.
The relationship of the Servicer (and of any successor to the
Servicer as servicer under this Agreement) to the Trustee under
this Agreement
is intended by the parties to be that of an independent contractor
and not that
of a joint venturer, partner or agent.
Section 3.02 Subservicing; Enforcement of the Obligations of
Servicer. (a) The Servicer may arrange for the subservicing of any
Mortgage Loan
it services by a Subservicer pursuant to a Subservicing Agreement;
provided,
however, that such subservicing arrangement and the terms of the
related
Subservicing Agreement must provide for the servicing of such
Mortgage Loan in a
manner consistent with the servicing arrangements contemplated
hereunder.
Notwithstanding the provisions of any Subservicing Agreement, any
of the
provisions of this Agreement relating to agreements or arrangements
between the
Servicer and a Subservicer or reference to actions taken through a
Subservicer
or otherwise, the Servicer shall remain obligated and liable to the
Depositor,
the Trustee and the Certificateholders for the servicing and
administration of
the Mortgage Loans it services in accordance with the provisions of
this
Agreement without diminution of such obligation or liability by
virtue of such
Subservicing Agreements or arrangements or by virtue of
indemnification from the
Subservicer and to the same extent and under the same terms and
conditions as if
the Servicer alone were servicing and administering those Mortgage
Loans. All
actions of each Subservicer performed pursuant to the related
Subservicing
Agreement shall be performed as agent of the Servicer with the same
force and
effect as if performed directly by the Servicer.
(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
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<PAGE>
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.
(e) Notwithstanding the foregoing, to the extent the Servicer
engages any affiliate or third party vendor, including any
Subservicer, in
connection with the performance of any of its duties under this
Agreement, the
Servicer shall immediately notify the Depositor in writing of such
engagement.
To the extent the Depositor notifies the Servicer and the Trustee
that it has
determined that any such affiliate, third party vendor or
Subservicer is a
Servicing Function Participant, the Servicer shall cause such
Servicing Function
Participant to prepare a separate assessment and attestation
report, as
contemplated by Section 3.19 of this Agreement and deliver such
report to the
Trustee as set forth in Section 3.22 of this Agreement. In
addition, to the
extent the Depositor notifies the Servicer and the Trustee that it
has
determined that any such Servicing Function Participant would be a
"servicer"
within the meaning of Item 1101 of Regulation AB and meets the
criteria in Item
1108(a)(2)(i), (ii) or (iii) of Regulation AB (an "Additional
Servicer"), the
Servicer shall cause such Additional Servicer to prepare a separate
compliance
statement as contemplated by Section 3.18 of this Agreement and
deliver such
statement to the Trustee as set forth in Section 3.22 of this
Agreement.
In addition, if the Depositor determines any such Servicing
Function
Participant would be a "servicer" within the meaning of Item 1101
of Regulation
AB, the Servicer shall cause such Servicing Function Participant to
provide the
Depositor and the Trustee the information required by Section
1108(b) and
1108(c) of Regulation AB within two Business Days following such
engagement. To
the extent the Servicer terminates any such Servicing Function
Participant that
the Depositor has determined is a "servicer" within the meaning of
Item 1101 of
Regulation AB, the Servicer shall provide the Depositor and the
Trustee the
information required to enable the Trustee to accurately and timely
report such
event under Item 6.02 of
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Form 8-K (if the Trust's Exchange Act reporting requirements have
not been
suspended pursuant to Section 15(d) of the Exchange Act as set
forth in
3.22(g)).
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 Fannie
Mae in the Fannie Mae Servicing Guide or by Freddie Mac in the
Freddie Mac
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
Fannie Mae or
Freddie Mac.
Section 3.04 Access to Certain Documentation. The Servicer
shall
provide to the OCC, the OTS, the FDIC and to comparable regulatory
authorities
supervising Holders of Certificates and the examiners and
supervisory agents of
the OCC, the OTS, the FDIC and such other authorities, access to
the
documentation required by applicable regulations of the OCC, the
OTS, the FDIC
and such other authorities with respect to the Mortgage Loans. Such
access shall
be afforded upon reasonable and prior written request and during
normal business
hours at the offices designated by the Servicer; provided that the
Servicer
shall be entitled to be reimbursed by each such Certificateholder
for actual
expenses incurred by the Servicer in providing such reports and
access. 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 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 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 Fannie
Mae requirements. The Servicer shall pay or shall cause the
Mortgagor to pay the
premium thereon on a timely basis, at least until the Loan-to-Value
Ratio of
such Mortgage Loan is reduced to 80% or such other Loan-to-Value
Ratio as may be
required by law. If such Primary Insurance Policy is terminated,
the Servicer
shall
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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
Fannie Mae or
Freddie Mac, 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.
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 within 90 days of such time, 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
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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 Sections 7.02
and 8.05. 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 such predecessor
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. The
Trustee shall
be entitled to be reimbursed from the predecessor Servicer (or the
Trust if the
predecessor Servicer is unable to fulfill its obligations
hereunder) for all
Servicing Transfer Costs.
Section 3.08 Collection of Mortgage Loan Payments; Servicer
Custodial Account and Certificate Account. (a) Continuously from
the date hereof
until the principal and interest on all Mortgage Loans are paid in
full, the
Servicer will proceed diligently, in accordance with this
Agreement, to collect
all payments due under each of the Mortgage Loans it services when
the same
shall become due and payable. Further, the Servicer will in
accordance with all
applicable law and Customary Servicing Procedures ascertain and
estimate taxes,
assessments, fire and hazard insurance premiums, mortgage insurance
premiums and
all other charges with respect to the Mortgage Loans it services
that, as
provided in any Mortgage, will become due and payable to the end
that the
installments payable by the Mortgagors will be sufficient to pay
such charges as
and when they become due and payable. Consistent with the
foregoing, the
Servicer may in its discretion (i) waive any late payment charge or
any
prepayment charge or penalty interest in connection with the
prepayment of a
Mortgage Loan it services and (ii) extend the due dates for
payments due on a
Mortgage Note for a period not greater than 120 days; provided,
however, that
the Servicer cannot extend the maturity of any such Mortgage Loan
past the date
on which the final payment is due on the latest maturing Mortgage
Loan as of the
Cut-off Date. In the event of any such arrangement, the Servicer
shall make
Periodic Advances on the related Mortgage Loan in accordance with
the provisions
of Section 3.20 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.
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(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 other than any Excess
Proceeds 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, all Substitution Adjustment Amounts
and
all
Reimbursement Amounts, to the extent received by the Servicer;
(vii) Periodic Advances made by the Servicer pursuant to
Section
3.20 and
any Compensating Interest;
(viii) any Recoveries;
(ix) any Buy-Down Funds required to be deposited pursuant to
Section
3.23;
and
(x) 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, Ancillary Income
need not be
deposited by the Servicer. If the Servicer shall deposit in the
Servicer
Custodial Account any amount not required to be deposited, it may
at any time
withdraw or direct the institution maintaining the Servicer
Custodial Account to
withdraw such amount from the Servicer Custodial Account, any
provision herein
to the contrary notwithstanding. The Servicer Custodial Account may
contain
funds that belong to one or more
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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; provided
that such
commingling of funds shall not be permitted at any time during
which [_______]'s
senior long-term unsecured debt rating of Bank of America is below
"A".
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, which shall be deemed
to consist of
five sub-accounts. 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 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 the case of the Servicer Custodial
Account, or the
Trustee, in the case of the Certificate Account, 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 Servicer Custodial Account
Reinvestment
Income shall be for the benefit of the Servicer as part of its
Servicing
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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 after 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 designate the Upper-Tier Certificate
Sub-Account as a sub-account of the 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, be deemed to deposit into the Upper-Tier
Certificate
Sub-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 "Bank of
America, National
Association, in trust for registered holders of Banc of America
Mortgage
Securities, Inc. Mortgage Pass-Through Certificates, Series 20
-[__] 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 Fannie Mae or Freddie Mac as an eligible institution for
escrow
accounts and which is a member of the Automated Clearing House. In
any case, the
Escrow Account shall be insured by the FDIC to the fullest extent
permitted by
law. The Servicer shall deposit in the appropriate Escrow Account
on a daily
basis, and retain therein: (i) all Escrow Payments collected on
account of the
Mortgage Loans, (ii) all amounts representing proceeds of any
hazard insurance
policy which are to be applied to the restoration or repair of any
related
Mortgaged Property and (iii) all amounts representing proceeds of
any Primary
Insurance Policy. Nothing herein shall require the Servicer to
compel a
Mortgagor to establish an Escrow Account in violation of applicable
law.
(b) Withdrawals of amounts so collected from the Escrow Accounts
may
be made by the Servicer only (i) to effect timely payment of taxes,
assessments,
mortgage insurance premiums, fire and hazard insurance premiums,
condominium or
PUD association dues, or comparable items constituting Escrow
Payments for the
related Mortgage, (ii) to reimburse the
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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.
Section 3.11 Permitted Withdrawals from the Servicer Custodial
Account and 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;
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(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, such right of reimbursement pursuant to this clause (iii)
being
limited to amounts received on the Mortgage Loans in the same
Loan
Group as the Mortgage
Loan(s) in respect of which such Nonrecoverable
Advance
was 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, 2.04
or
2.09, 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 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). The Servicer shall keep and maintain such separate
accounting for
each Loan Group. Prior to making any withdrawal from the Servicer
Custodial
Account pursuant to clause (iii), the Servicer shall deliver to the
Trustee an
Officer's Certificate of a Servicing Officer indicating the amount
of any
previous Advance determined by the Servicer to be a Nonrecoverable
Advance and
identifying the related Mortgage Loan(s) and their respective
portions of such
Nonrecoverable Advance. The Servicer shall notify the Depositor and
the Trustee
of the amount, purpose and party paid pursuant to clause (vi)
above.
(b) The Trustee shall be deemed to withdraw funds from the
applicable Certificate Account sub-accounts to deposit the
Lower-Tier
Distribution Amount into the Upper-Tier Certificate Sub-Account and
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;
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(ii) to pay to itself as additional compensation earnings on or
investment
income with respect to funds in the Certificate Account and any
other
amounts (other than the Trustee Fee) due to it under this
Agreement
for the
related Distribution Date;
(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 this
Agreement pursuant to Section 10.01.
The
Trustee shall notify the Depositor and the Servicer of the amount
and
purpose of
any payments made pursuant to clause (ii) above (other than any
earnings
or investment income with respect to funds in the Certificate
Account).
(c) On each Distribution Date, funds on deposit in the
Certificate
Account and deemed to be on deposit in the Upper-Tier Certificate
Sub-Account
shall be used to make payments on the Regular Certificates and the
Class 1-A-R
Certificate in respect of the Class R-U Interest, as provided in
Sections 5.01
and 5.02. The 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
Fannie Mae or Freddie Mac. The Servicer shall also maintain on REO
Property,
fire and hazard insurance with extended coverage in an amount which
is at least
equal to the maximum insurable value of the improvements which are
a part of
such property, liability insurance and, to the extent required,
flood insurance
in an amount required above. Any amounts collected by the Servicer
under any
such policies (other than amounts to be deposited in an Escrow
Account and
applied to the restoration or repair of the property subject to the
related
Mortgage or property acquired in liquidation of the Mortgage Loan,
or to be
released to the Mortgagor in accordance with Customary Servicing
Procedures)
shall be deposited in the Servicer Custodial Account, subject to
withdrawal
pursuant to Section 3.11(a). It is understood and agreed that no
earthquake or
other additional insurance need be required by the Servicer of any
Mortgagor or
maintained on REO Property, other than pursuant to such applicable
laws and
regulations as shall at any time be in force and as shall require
such
additional insurance. All policies required hereunder shall be
endorsed with
standard mortgagee clauses with loss payable to the Servicer, and
shall provide
for at least 30 days prior written notice of any cancellation,
reduction in
amount or material change in coverage to the Servicer.
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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 Fannie Mae 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 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
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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 or if an instrument of release is
required
releasing the Mortgagor from liability on the Mortgage Loan, the
Servicer shall
prepare and 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 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, the Servicer shall execute 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 Officer's Certificate
described in
the previous sentence and 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 Servicing Compensation.
Section 3.14 Realization Upon Defaulted Mortgage Loans; REO
Property. Subject to Section 3.21, the Servicer shall use
reasonable efforts to
foreclose upon or otherwise comparably convert the ownership of
Mortgaged
Properties securing such of the Mortgage Loans as come into and
continue in
default and as to which no satisfactory arrangements can be made
for collection
of delinquent payments. In connection with such foreclosure or
other conversion,
the Servicer shall follow Customary Servicing Procedures and shall
meet the
requirements of the insurer under any Required Insurance Policy;
provided,
however, that the Servicer may enter into a special servicing
agreement with an
unaffiliated Holder of 100% Percentage Interest of a Class of
Subordinate
Certificates or a holder of a class of securities representing
interests in the
Subordinate 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
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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.
With respect to any REO Property, the deed or certificate of
sale
shall be taken in the name of the Trustee for the benefit of
the
Certificateholders, or its nominee, on behalf of the
Certificateholders. The
Trustee's name shall be placed on the title to such REO Property
solely as the
Trustee hereunder and not in its individual capacity. The Servicer
shall ensure
that the title to such REO Property references this Agreement and
the Trustee's
capacity hereunder. Pursuant to its efforts to sell such REO
Property, the
Servicer shall either itself or through an agent selected by the
Servicer
manage, conserve, protect and operate such REO Property in the same
manner that
it manages, conserves, protects and operates other foreclosed
property for its
own account and in the same manner that similar property in the
same locality as
the REO Property is managed. Incident to its conservation and
protection of the
interests of the Certificateholders, the Servicer may rent the
same, or any part
thereof, as the Servicer deems to be in the best interest of
the
Certificateholders for the period prior to the sale of such REO
Property. The
Servicer shall prepare for and deliver to the Trustee a statement
with respect
to each REO Property that has been rented, if any, showing the
aggregate rental
income received and all expenses incurred in connection with the
management and
maintenance of such REO Property at such times as is necessary to
enable the
Trustee to comply with the reporting requirements of the REMIC
Provisions;
provided, however, that the Servicer shall have no duty to rent any
REO Property
on behalf of the Trust. The net monthly rental income, if any, from
such REO
Property shall be deposited in the Servicer Custodial Account no
later than the
close of business on each Determination Date. The Servicer shall
perform, with
respect to the Mortgage Loans, the tax reporting and withholding
required by
Sections 1445 and 6050J of the Code with respect to foreclosures
and
abandonments, the tax reporting required by Section 6050H of the
Code with
respect to the receipt of mortgage interest from individuals and,
if required by
Section 6050P of the Code with respect to the cancellation of
indebtedness by
certain financial entities, by preparing such tax and information
returns as may
be required, in the form required.
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 of the Upper-Tier REMIC or the Lower-Tier REMIC or cause
either REMIC
created hereunder 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
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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 created
hereunder 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 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
Interest 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.
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
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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 deliver to the Servicer the Mortgage Note with written
evidence of
cancellation thereon. If the Mortgage has been recorded in the name
of MERS or
its designee, the Servicer shall take all necessary action to
reflect the
release of the Mortgage on the records of MERS. Expenses incurred
in connection
with any instrument of satisfaction or deed of reconveyance shall
be chargeable
to the related Mortgagor. From time to time and as shall be
appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such
purpose
collection under any policy of flood insurance, any fidelity bond
or errors or
omissions policy, or for the purposes of effecting a partial
release of any
Mortgaged Property from the lien of the Mortgage or the making of
any
corrections to the Mortgage Note or the Mortgage or any of the
other documents
included in the Mortgage File, the Trustee or the Custodian, as
applicable,
shall, upon delivery to the Trustee (or, at the direction of the
Trustee, the
Custodian) of a Request for Release signed by a Servicing Officer,
release the
Mortgage File within seven Business Days to the Servicer. Subject
to the further
limitations set forth below, the Servicer shall cause the Mortgage
File so
released to be returned to the Trustee or the Custodian, as
applicable, when the
need therefor by the Servicer no longer exists, unless the Mortgage
Loan is
liquidated and the proceeds thereof are deposited in the Servicer
Custodial
Account, in which case the Servicer shall deliver to the Trustee or
the
Custodian, as applicable, a Request for Release, signed by a
Servicing Officer.
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
shall give 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
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deposit in the Servicer Custodial Account, shall be held by the
Servicer for and
on behalf of the Trustee and shall be and remain the sole and
exclusive property
of the Trustee, subject to the applicable provisions of this
Agreement. The
Servicer also agrees that it shall not knowingly create, incur or
subject any
Mortgage File or any funds that are deposited in the Servicer
Custodial Account,
Certificate Account or any Escrow Account, or any funds that
otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest,
judgment, levy, writ
of attachment or other encumbrance created by the Servicer, or
assert by legal
action or otherwise any claim or right of setoff against any
Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan,
except, however,
that the Servicer shall be entitled to set off against and deduct
from any such
funds any amounts that are properly due and payable to the Servicer
under this
Agreement.
Section 3.17 Servicing Compensation. The Servicer shall be
entitled
out of each payment of interest on a Mortgage Loan (or portion
thereof) and
included in the Trust Estate to retain or withdraw from the
Servicer Custodial
Account an amount equal to the Servicing Fee for such Distribution
Date;
provided, however, that the aggregate Servicing Fee for the
Servicer relating to
the Mortgage Loans shall be reduced (but not below zero) by an
amount equal to
the Compensating Interest.
Any additional Servicing Compensation 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.
Section 3.18 Annual Statement as to Compliance. The Trustee and
the
Servicer shall deliver, and the Servicer shall cause each
Additional Servicer
engaged by it to deliver, in electronic form to the Depositor, the
Trustee and
each Rating Agency on or before March 5 of each year or if such day
is not a
Business Day, the next Business Day (with a 10 calendar day cure
period, but in
no event later than March 15), followed by a hard copy within 10
calendar days,
commencing in March 20
, a certificate in the form required by Item 1123 of
Regulation AB, to the effect that (i) an authorized officer of the
Trustee, the
Servicer or the Additional Servicer, as the case may be, has
reviewed (or a
review has been made under his or her supervision of) such party's
activities
under this Agreement, or such other applicable agreement in the
case of an
Additional Servicer, during the prior calendar year or portion
thereof and (ii)
to the best of such officer's knowledge, based on such review, such
party has
fulfilled all of its obligations under this Agreement, or such
other applicable
agreement in the case of an Additional Servicer, in all material
respects
throughout the prior calendar year or portion thereof or, if there
has been a
failure to fulfill any such obligation in any material respect,
specifying each
such failure known to such officer and the nature and status
thereof. Promptly
after receipt of each such certificate, the Depositor shall review
such
certificate and, if applicable, consult with the Servicer and the
Trustee as to
the nature of any failure to fulfill any obligation under the
Agreement, or such
other applicable agreement in the case of an Additional Servicer,
in any
material respect.
Section 3.19 Assessments of Servicing Compliance; Registered
Public
Accounting Firm Attestation Reports. (a) Each of the Servicer and
the Trustee,
at its own
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expense, shall furnish, and shall cause any Servicing Function
Participant
engaged by it to furnish, at such party's expense, to the Trustee
and the
Depositor in electronic form, not later than March 5 of each year
or if such day
is not a Business Day, the next Business Day (with a 10 calendar
day cure
period, but in no event later than March 15), followed by a hard
copy within 10
calendar days, commencing in March 20 , a report on an assessment of
compliance
with the Servicing Criteria applicable to it that contains (A) a
statement by
such party of its responsibility for assessing compliance with the
Servicing
Criteria applicable to it, (B) a statement that such party used the
Servicing
Criteria to assess compliance with the Servicing Criteria
applicable to it, (C)
such party's assessment of compliance with the Servicing Criteria
applicable to
it as of and for the fiscal year covered by the Form 10-K required
to be filed
pursuant to Section 3.22, including, if there has been any material
instance of
noncompliance with the Servicing Criteria applicable to it, a
discussion of each
such failure and the nature and status thereof, and (D) a statement
that a
registered public accounting firm has issued an attestation report
on such
party's assessment of compliance with the Servicing Criteria
applicable to such
party as of and for such period.
Each such assessment of compliance report shall be addressed to
the
Depositor and the Servicer and signed by an authorized officer of
the applicable
party, and shall address each of the Relevant Servicing Criteria
set forth on
Exhibit Q hereto, or as set forth in the notification furnished to
the Depositor
and the Trustee pursuant to Section 3.19(c). The Servicer and the
Trustee hereby
acknowledge and agree that their respective assessments of
compliance will cover
the items identified on Exhibit Q hereto as being covered by such
party. The
parties to this Agreement acknowledge that where a particular
Servicing
Criterion has multiple components, each party's assessment of
compliance (and
related attestation of compliance) will relate only to those
components that are
applicable to such party. Promptly after receipt of each such
report on
assessment of compliance, the Depositor shall review each such
report and, if
applicable, consult with the Servicer or the Trustee as to the
nature of any
material instance of noncompliance with the Servicing Criteria
applicable to it
(or any Servicing Function Participant engaged or utilized by the
Servicer or
the Trustee, as applicable).
(b) Each of the Servicer and the Trustee, at its own expense,
shall
cause, and shall cause any Servicing Function Participant engaged
by it, at such
party's expense, to cause, not later than March 5 of each year or
if such day is
not a Business Day, the next Business Day (with a 10 calendar day
cure period),
commencing in March 20
, a registered public accounting firm (which may also
render other services to the Servicer, the Trustee, or such other
Servicing
Function Participants, as the case may be) and that is a member of
the American
Institute of Certified Public Accountants to furnish electronically
a report to
the Trustee and the Depositor (with a hard copy to follow within 10
calendar
days), to the effect that (i) it has obtained a representation
regarding certain
matters from the management of such party, which includes an
assertion that such
party has complied with the Servicing Criteria applicable to it,
and (ii) on the
basis of an examination conducted by such firm in accordance with
standards for
attestation engagements issued or adopted by the Public Company
Accounting
Oversight Board, it is expressing an opinion as to whether such
party's
assessment of compliance with the Servicing Criteria was fairly
stated in all
material respects, or it cannot express an overall opinion
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regarding such party's assessment of compliance with the Servicing
Criteria. In
the event that an overall opinion cannot be expressed, such
registered public
accounting firm shall state in such report why it was unable to
express such an
opinion. Such report must be available for general use and not
contain
restricted use language.
Promptly after receipt of each such accountants' attestation
report,
the Depositor shall review the report and, if applicable, consult
with the
Servicer or the Trustee if such report (i) states that a party's
assessment of
compliance was not fairly stated in any material respect or (ii) is
unable to
state an overall opinion.
(c) No later than 30 days following the end of each fiscal year
for
the Trust for which a Form 10-K is required to be filed, the
Servicer shall
forward to the Trustee the name of each Servicing Function
Participant engaged
by it and what Servicing Criteria will be addressed in the report
on assessment
of compliance prepared by such Servicing Function Participant.
(d) Beginning with fiscal year 20 and thereafter, none of
the
Servicer, the Trustee or any Servicing Function Participant engaged
by such
parties shall be required to deliver or cause the delivery of any
such
assessments or attestation reports until April 15 unless such party
has received
written notice from the Depositor that a Form 10-K is required to
be filed in
respect of the Trust for the preceding fiscal year.
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 with respect to a Loan Group in the Servicer Custodial
Account has
been used by the Servicer in discharge of its obligation to make
any such
Periodic Advance on a Mortgage Loan in such Loan Group. 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 with respect to each
Loan Group 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.
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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) forgive principal owing under such Mortgage Loan or
permanently
reduce the
interest rate on such Mortgage Loan;
(ii) affect the amount or timing of any related payment of
principal,
interest or other amount payable thereunder;
(iii) 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
(iv) otherwise constitute a "significant modification" within
the
meaning of
Treasury Regulations Section 1.860G-2(b);
unless, in the case of clauses (ii) through (iv) above, (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 of the Upper
Tier REMIC or
the Lower Tier REMIC. Notwithstanding the foregoing, no Opinion of
Counsel need
be delivered if the purpose of the modification is to reduce the
Monthly Payment
on a Mortgage Loan as a result of a partial Principal Prepayment
provided that
the Mortgage Loan is fully amortized by its original maturity date.
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) 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.
(d) The Servicer shall notify the Depositor and 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
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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.
(a)
The Trustee and the Servicer shall reasonably cooperate with the
Depositor to
enable the Depositor to satisfy its reporting requirements under
the Exchange
Act and the parties hereto shall reasonably cooperate to enable the
Securities
and Exchange Commission requirements with respect to the Depositor
to be met in
the event that the Securities and Exchange Commission issues
additional
interpretive guidelines or promulgates rules or regulations, or in
the event of
any other change of law that would require reporting arrangements
or the
allocation of responsibilities with respect thereto, as described
in this
Section 3.22, to be conducted or allocated in a different manner.
Without
limiting the generality of the foregoing, the Trustee shall prepare
on behalf of
the Depositor any Current Reports on Form 8-K (each, a "Form 8-K"),
Distribution
Reports on Form 10-D (each, a "Form 10-D") and Annual Reports on
Form 10-K
(each, a "Form 10-K") as required by the Exchange Act and the rules
and
regulations of the Securities and Exchange Commission thereunder,
the Servicer
shall sign and the Trustee shall file (via the Securities and
Exchange
Commission's Electronic Data Gathering and Retrieval System) such
forms on
behalf of the Depositor. Notwithstanding the foregoing, the
Depositor shall file
the Form 8-Ks in connection with the issuance of the
Certificates.
(b) Each Form 10-D shall be filed by the Trustee within 15 days
after each Distribution Date and will include a copy of the monthly
statement to
Certificateholders delivered pursuant to Section 5.04(b) (each, a
"Distribution
Date Statement") for such Distribution Date as an exhibit thereto.
In addition,
the Trustee shall include under Item 1 of each Form 10-D any
information
required by Item 1121 of Regulation AB to the extent relevant that
is not
included on the Distribution Date Statement. Any disclosure in
addition to the
Distribution Date Statement and any other information required by
Item 1121 of
Regulation AB ("Additional Form 10-D Information") shall be
determined by the
party preparing such information as set forth on Exhibit R-1 hereto
and the
Trustee shall compile such disclosure pursuant to the following
paragraph. The
Trustee will have no duty or liability for any failure hereunder to
determine or
prepare any Additional Form 10-D Information, except to the extent
of its
obligations as set forth in the next paragraph.
As set forth on Exhibit R-1 hereto, within 5 calendar days after
the
related Distribution Date, certain parties hereto shall be required
to provide
to the Depositor and the Trustee, to the extent known by such
parties, any
Additional Form 10-D Information, if applicable. The Depositor will
be
responsible for all reasonable fees and expenses assessed or
incurred by the
Trustee in connection with including any Additional Form 10-D
Information on
Form 10-D pursuant to this paragraph, including converting any such
disclosure
to an EDGAR-compatible format.
After preparing the Form 10-D, the Trustee shall forward
electronically a draft copy of the Form 10-D to the Depositor and
the Servicer
for review. No later than 2 Business Days prior to the 15th
calendar day after
the related Distribution Date, the Depositor and Servicer shall
each indicate to
the Trustee their consent to the form and substance of the draft
Form 10-D
(which consent may be in electronic form). If a Form 10-D cannot be
filed on
time or if a previously filed Form 10-D needs to be amended, the
Trustee will
follow the procedures
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set forth in Section 3.22(e). Promptly (but no later than one
Business Day)
after filing with the Securities and Exchange Commission, the
Trustee will make
available on its internet website a final executed copy of each
Form 10-D. The
Trustee shall have no liability for any loss, expense, damage or
claim arising
out of or with respect to any failure to properly prepare and/or
timely file
such Form 10-D, where such failure results from the Trustee's
inability or
failure to obtain or receive, on a timely basis, any information
from any party
hereto (other than the Trustee or any Servicing Function
Participant utilized by
the Trustee) needed to prepare, arrange for execution or file such
Form 10-D,
not resulting from its own negligence, bad faith or willful
misconduct.
(c) On or before 90 days after the end of each fiscal year of
the
Trust (or such earlier date as may be required by the Exchange Act
and the rules
and regulations of the Securities and Exchange Commission)
commencing in 20 ,
the Trustee shall file a Form 10-K, in form and substance as
required by
applicable law or applicable Securities and Exchange Commission
staff
interpretations. Each such Form 10-K shall include the following
items, in each
case to the extent they have been delivered to the Trustee within
the applicable
time frames set forth in this Agreement: (i) an annual compliance
statement for
the Trustee, the Servicer and each Additional Servicer, as
described under
Section 3.18, (ii)(A) the annual reports on assessment of
compliance with
Servicing Criteria for the Servicer, the Trustee and each S
