STRUCTURED ASSET SECURITIES CORPORATION, as Depositor,
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer,
and
THE CHASE MANHATTAN BANK, as Trustee
---------------------------
TRUST AGREEMENT
Dated as of July 1, 1998
---------------------------
STRUCTURED ASSET SECURITIES CORPORATION
MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1998-8
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions...............................................3
Section 1.02. Calculations Respecting Mortgage Loans...................37
Section 1.03. Calculations Respecting Accrued Interest.................37
ARTICLE II
DECLARATION OF TRUST; ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
Mortgage Loans...........................................37
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
Documentation for Trust Fund.............................40
Section 2.03. Representations and Warranties of the Depositor..........41
Section 2.04. Discovery of Breach......................................43
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans...43
Section 2.06. Grant Clause.............................................44
Section 2.07. Purchase of Defaulted Mortgage Loans.....................44
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates.........................................45
Section 3.02. Registration.............................................45
Section 3.03. Transfer and Exchange of Certificates....................46
Section 3.04. Cancellation of Certificates.............................48
Section 3.05. Replacement of Certificates..............................49
Section 3.06. Persons Deemed Owners....................................49
Section 3.07. Temporary Certificates...................................49
Section 3.08. Appointment of Paying Agent..............................49
Section 3.09. Book-Entry Certificates..................................50
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account.......................................51
Section 4.02. Application of Funds in the Collection Account...........53
Section 4.03. Reports to Certificateholders............................55
Section 4.04. Certificate Account......................................57
Section 4.05. Determination of LIBOR...................................58
Section 4.06. Determination of Fed Funds Average Rate..................59
Section 4.07. Collateralization Accounts...............................60
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally..................................61
Section 5.02. Distributions from the Certificate Account...............62
Section 5.03. Allocation of Losses.....................................66
Section 5.04. Advances by Master Servicer and Trustee..................66
Section 5.05. Compensating Interest Payments...........................67
Section 5.06. Pooling REMIC, REMIC 1, REMIC 2, REMIC 3, and REMIC 4
Allocations..............................................67
Section 5.07. Extra Servicing Fee......................................71
Section 5.08. Basis Risk Reserve Funds.................................71
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee........................................72
Section 6.02. Certain Matters Affecting the Trustee....................74
Section 6.03. Trustee Not Liable for Certificates......................75
Section 6.04. Trustee May Own Certificates.............................75
Section 6.05. Eligibility Requirements for Trustee.....................76
Section 6.06. Resignation and Removal of Trustee.......................76
Section 6.07. Successor Trustee........................................77
Section 6.08. Merger or Consolidation of Trustee.......................77
Section 6.09. Appointment of Co-Trustee, Separate Trustee or
Custodian................................................77
Section 6.10. Authenticating Agents....................................79
Section 6.11. Indemnification of Trustee...............................79
Section 6.12. Fees and Expenses of Trustee.............................80
Section 6.13. Collection of Monies.....................................80
Section 6.14. Trustee To Act; Appointment of Successor.................80
Section 6.15. Additional Remedies of Trustee Upon Event of Default.....84
Section 6.16. Waiver of Defaults.......................................84
Section 6.17. Notification to Holders..................................84
Section 6.18. Directions by Certificateholders and Duties of
Trustee During Event of Default..........................84
Section 6.19. Action Upon Certain Failures of the Master Servicer
and Upon Event of Default................................85
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust
Fund Upon Purchase or Liquidation of All Mortgage
Loans....................................................85
Section 7.02. Procedure Upon Termination of Trust Fund.................86
Section 7.03. Additional Trust Fund Termination Requirements...........87
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders..........................88
Section 8.02. Access to List of Holders................................88
Section 8.03. Acts of Holders of Certificates..........................89
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer............................90
Section 9.02. Master Servicer Fidelity Bond and Master Servicer
Errors and Omissions Insurance Policy....................90
Section 9.03. Master Servicer's Financial Statements and Related
Information..............................................91
Section 9.04. Power to Act; Procedures.................................91
Section 9.05. Servicing Agreements Between the Master Servicer and
Servicers; Enforcement of Servicers' Obligations.........92
Section 9.06. Collection of Taxes, Assessments and Similar Items.......93
Section 9.07. Termination of Servicing Agreements; Successor
Servicers................................................93
Section 9.08. Master Servicer Liable for Enforcement...................94
Section 9.09. No Contractual Relationship Between Servicers and
Trustee or Depositor.....................................94
Section 9.10. Assumption of Servicing Agreement by Trustee.............95
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements.............95
Section 9.12. Release of Mortgage Files................................95
Section 9.13. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee..........................96
Section 9.14. Representations and Warranties of the Master Servicer....97
Section 9.15. Closing Certificate and Opinion..........................99
Section 9.16. Standard Hazard and Flood Insurance Policies.............99
Section 9.17. Presentment of Claims and Collection of Proceeds........100
Section 9.18. Maintenance of the Primary Mortgage Insurance
Policies................................................100
Section 9.19. Trustee To Retain Possession of Certain Insurance
Policies and Documents..................................101
Section 9.20. Realization Upon Defaulted Mortgage Loans...............101
Section 9.21. Compensation to the Master Servicer.....................101
Section 9.22. REO Property............................................102
Section 9.23. Preparation of Tax Returns and Other Reports............102
Section 9.24. Reports to the Trustee..................................103
Section 9.25. Annual Officer's Certificate as to Compliance...........104
Section 9.26. Annual Independent Accountants' Servicing Report........104
Section 9.27. Merger or Consolidation.................................105
Section 9.28. Resignation of Master Servicer..........................105
Section 9.29. Assignment or Delegation of Duties by the Master
Servicer................................................105
Section 9.30. Limitation on Liability of the Master Servicer and
Others..................................................105
Section 9.31. Indemnification; Third-Party Claims.....................106
Section 9.32. Alternative Index.......................................106
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration....................................107
Section 10.02. Prohibited Transactions and Activities..................109
Section 10.03. Indemnification with Respect to Certain Taxes and
Loss of REMIC Status....................................109
Section 10.04. REO Property............................................109
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment.................110
Section 11.02. Entire Agreement........................................110
Section 11.03. Amendment...............................................111
Section 11.04. Voting Rights...........................................112
Section 11.05. Provision of Information................................112
Section 11.06. Governing Law...........................................112
Section 11.07. Notices.................................................112
Section 11.08. Severability of Provisions..............................113
Section 11.09. Indulgences; No Waivers.................................113
Section 11.10. Headings Not To Affect Interpretation...................113
Section 11.11. Benefits of Agreement...................................113
Section 11.12. Special Notices to the Rating Agencies..................113
Section 11.13. Counterparts............................................114
Section 11.14. Transfer of Servicing...................................114
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 Form of Initial Certification
Exhibit B-2 Form of Interim Certification
Exhibit B-3 Form of Final Certification
Exhibit B-4 Form of Endorsement
Exhibit C Request for Release of Documents and Receipt
Exhibit D-l Residual Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Residual Certificate Transfer Affidavit (Transferor)
Exhibit E Servicing Agreements
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G [Reserved]
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Monthly Remittance Advice
Exhibit J Monthly Electronic Data Transmission
Exhibit K Custodial Agreements
Exhibit L Special Servicing Compensation Agreement
Schedule A Mortgage Loan Schedule
This TRUST AGREEMENT, dated as of July 1, 1998 (the "Agreement"), is by
and among STRUCTURED ASSET SECURITIES CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
master servicer (the "Master Servicer"), and THE CHASE MANHATTAN BANK, a New
York banking corporation, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor has acquired the Mortgage Loans from Xxxxxx Capital, A
Division of Xxxxxx Brothers Holdings Inc. ("Xxxxxx Capital"), and at the
Closing Date owns the Mortgage Loans and the other property that it conveys to
the Trustee hereunder for inclusion in the Trust Fund. On the Closing Date,
the Depositor will acquire the Certificates from the Trust Fund, as
consideration for its transfer to the Trust Fund of the Mortgage Loans and the
other property constituting the Trust Fund. The Depositor has duly authorized
the execution and delivery of this Agreement to provide for the conveyance to
the Trustee of the Mortgage Loans and the other property constituting the
Trust Fund. All covenants and agreements made by the Depositor, the Master
Servicer and the Trustee herein with respect to the Mortgage Loans and the
other property constituting the Trust Fund are for the benefit of the Holders
from time to time of the Certificates. The Depositor and the Master Servicer
are entering into this Agreement, and the Trustee is accepting the Trust Fund
created hereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
As provided herein, the Trustee shall elect that the Trust Fund be
treated for federal income tax purposes as five separate real estate mortgage
investment conduits (each a "REMIC" or, in the alternative, the "Pooling
REMIC," "REMIC 1," "REMIC 2," "REMIC 3," and "REMIC 4," respectively, REMIC 4
also being referred to as the "Upper Tier REMIC"). The Class A-1, Class A-2,
Class A-3, Class M-1, Class M-2 and Class B Certificates and the Class X
Certificates represent ownership of all of the "regular interests" in REMIC 4
(the Class T4-1, Class T4-2, Class T4-3, Class T4-4, Class T4-5, Class T4-6,
Class T4-7, Class T4-8, Class T4-9, Class T4-10, Class T4-11, and Class T4-12
Interests), and the Class R4 Interests represent the sole class of "residual
interest" in REMIC 4 for purposes of the REMIC Provisions. Each of the Class
PR, Class R1, Class R2, and Class R3 Certificates represents the sole class of
"residual interest" in the Pooling REMIC, REMIC 1, REMIC 2, and REMIC 3,
respectively, for purposes of the REMIC Provisions. There are also eight
classes of uncertificated Pooling REMIC Regular Interests issued under this
Agreement (the Class X-0, Xxxxx X-0XX, Class X-0, Xxxxx X-0XX, Class X-0,
Xxxxx X-0XX, Class P-4, and Class P-4PO) each of which will constitute regular
interests in the Pooling REMIC, three classes of uncertificated REMIC 1
Regular Interests issued under this Agreement (the Class T1-1, Class T1-2, and
Class T1-3 Interests), each of which will constitute regular interests in
REMIC 1, four classes of uncertificated REMIC 2 Regular Interests (the Class
T2-1, Class T2-2, Class T2-3, and Class T2-4 Interests), each of which will
constitute regular interests in REMIC 2, and nine classes of uncertificated
REMIC 3 Regular Interests (the Class T3-1, Class T3-2, Class T3-3, Class T3-4,
Class T3-5, Class T3-6, Class T3-7,Class T3-8, and Class T3-9 Interests), each
of which will constitute regular interests in REMIC 3. The Pooling REMIC
Regular Interests will be held as assets of REMIC 1, the REMIC 1 Regular
Interests will be held as assets of REMIC 2, the REMIC 2 Regular Interests
will be held as assets of REMIC 3, and the REMIC 3 Regular Interests will be
held as assets of REMIC 4.
As used herein, each Component is "related" to the other Components of
the same Component Group and to the Mortgage Pool having the identical
numerical designation as such Component Group, each Component Group is
"related" to the Mortgage Pool having the identical numerical designation, and
each Class X Certificate is "related" to the Mortgage Pool and Component Group
having the identical numerical designation.
The following table sets forth (or describes) the Class designation,
Certificate Interest Rate, initial Class Certificate Principal Amount and
minimum denomination for each Class of Certificates comprising the interests
in the Trust Fund created hereunder.
Certificate Initial Certificate Minimum
Class Designation Interest Rate Principal Amount Denominations
----------------- ------------- ------------------- -------------
Class A-1 (1) $451,000,000.00 $100,000
Class A-2 (1) 92,000,000.00 100,000
Class A-3 (1) 292,000,000.00 100,000
Class M-1 (1) 74,076,000.00 100,000
Class M-2 (1) 44,248,000.00 100,000
Class B (1) 29,215,000.00 100,000
Class X-1 (2) (2) (3)
Class X-2 (2) (2) (3)
Class X-3 (2) (2) (3)
Class X-4 (2) (2) (3)
Class Y-1 (2) (2) (3)
Class Y-2 (2) (2) (3)
Class Y-3 (2) (2) (3)
Class Y-4 (2) (2) (3)
Class R (2) (2) (3)
---------------------------
(1) The Certificate Interest Rate with respect to each Distribution Date
for the Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class
B Certificates is a per annum rate equal in each case to the weighted
average of the Component Interest Rates for such Distribution Date of
the Components of such Class, weighted on the basis of the Component
Principal Amounts thereof.
(2) The Class X-1, Class X-2, Class X-3, Class X-4, Class Y-1, Class Y-2,
Class Y-3, Class Y-4 and Class R Certificates will be issued without a
Certificate Principal Amount and will not bear interest.
(3) The Class X-1, Class X-2, Class X-3, Class X-4, Class Y-1, Class Y-2,
Class Y-3, Class Y-4 and Class R Certificates will each be issued as a
single Certificate evidencing the entire Percentage Interest in such
Class.
As of the Cut-off Date, the Mortgage Loans had an aggregate Scheduled
Principal Balance of $972,585,667.44.
In consideration of the mutual agreements herein contained, the
Depositor, the Master Servicer and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless the
-----------
context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, as
----------------------------
applicable, either (x) those customary mortgage servicing practices of prudent
mortgage servicing institutions that service or master service mortgage loans
of the same type and quality as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, to the extent applicable to the
Trustee or the Master Servicer (except in its capacity as successor to a
Servicer), or (y) as provided in the applicable Servicing Agreement, to the
extent applicable to any Servicer.
Accountant: A person engaged in the practice of accounting who (except
----------
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accrual Period: With respect to any Distribution Date and any Class
--------------
of LIBOR Certificates or Fed Funds Certificates, the one-month period
beginning on the immediately preceding Distribution Date (or on the Closing
Date, in the case of the first Accrual Period) and ending on the day
immediately preceding the related Distribution Date. With respect to any
Distribution Date and any Pooling REMIC Regular Interest, REMIC 1 Regular
Interest, REMIC 2 Regular Interest, or REMIC 3 Regular Interest, the one-month
period beginning on the immediately preceding Distribution Date (or, in the
case of the first Accrual Period, the 25th of July 1998) and ending on the day
immediately preceding the related Distribution Date.
Additional Collateral: None.
---------------------
Adjustable Rate Mortgage Loan: Any Mortgage Loan as to which the related
-----------------------------
Mortgage Note provides for the adjustment of the Mortgage Rate applicable
thereto.
Adjusted Overcollateralization Amount: With respect to each Mortgage Pool
-------------------------------------
and any Distribution Date, the amount, if any, by which (a) the Pool Balance
for such Mortgage Pool as of the end of the related Collection Period (reduced
to give effect to any Realized Losses and Advances of principal) exceeds (b)
the aggregate of the balances of the Class T3-4, Class T3-5, Class T3-6, Class
T3-7, Class T3-8, and Class T3-9 Interests related to such Mortgage Pool as of
such Distribution Date (after giving effect to the distribution of principal
on such Regular Interests on such Distribution Date).
Adjusted Overcollateralization Release Amount: With respect to each
---------------------------------------------
Mortgage Pool and any Distribution Date, the lesser of (x) the Principal
Remittance Amount for such Mortgage Pool for such Distribution Date and (y)
the amount, if any, by which (i) the Adjusted Overcollateralization Amount for
such Mortgage Pool for such date, calculated for this purpose on the basis of
the assumption that 100% of the Principal Remittance Amount for such Mortgage
Pool for such date is applied on such date in reduction of the principal
balances of the Class T3-4, Class T3-5, Class T3-6, Class T3-7, Class T3-8,
and Class T3-9 Interests related to such Mortgage Pool, exceeds (ii) the
Targeted Overcollateralization Amount for such Mortgage Pool for such date.
Advance: An advance of the aggregate of payments of principal and
-------
interest (net of the Master Servicing Fee and the applicable Servicing Fee) on
one or more Mortgage Loans that were due on the Due Date in the related
Collection Period and not received as of the close of business on the related
Determination Date, required to be made by or on behalf of the Master Servicer
and any Servicer (or by the Trustee) pursuant to Section 5.04.
Affiliate: With respect to any specified Person, any other Person
---------
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Loan Balance: The aggregate of the Scheduled Principal Balances
----------------------
of all Mortgage Loans at the date of determination.
Aggregate Master Servicing Compensation: As to any Distribution Date, the
---------------------------------------
sum of (x) the aggregate of the Master Servicing Fees payable to the Master
Servicer in respect of such Distribution Date and (y) all income and gain
realized from the investment of funds in the Collection Account during the
period from and including the Deposit Date in the calendar month immediately
preceding the month in which such Distribution Date occurs, to but excluding
the Deposit Date relating to such Distribution Date.
Aggregate Notional Amount: With respect to any Class of Notional
-------------------------
Certificates, the applicable aggregate notional amount set forth or described
in the Preliminary Statement hereto.
Aggregate Voting Interests: The aggregate of the Voting Interests of all
--------------------------
the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements
---------
hereto.
Applied Loss Amount: With respect to each Mortgage Pool and any
-------------------
Distribution Date, the amount, if any, by which (x) the aggregate Component
Principal Amount of the Components in the related Component Group after giving
effect to distributions on such date, but before giving effect to any
application of the Applied Loss Amount with respect to such Mortgage Pool on
such date, exceeds (y) the Pool Balance for such Mortgage Pool as of the close
of the related Collection Period.
Appraised Value: With respect to any Mortgage Loan, the amount set forth
---------------
in an appraisal made in connection with the origination of such Mortgage Loan
as the value of the related Mortgaged Property.
Aurora: Aurora Loan Services Inc., as Servicer under the applicable
------
Servicing Agreement.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
----------------------
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Trustee, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the
same jurisdiction, if permitted by law; provided, HOWEVER, that the Trustee
shall not be responsible for determining whether any such assignment is in
recordable form.
Authenticating Agent: Any authenticating agent appointed by the Trustee
--------------------
pursuant to Section 6.10.
Authorized Officer: Any Person who may execute an Officer's Certificate
------------------
on behalf of the Depositor.
B Principal Distribution Amount: With respect to each Mortgage Pool and
-------------------------------
any Distribution Date on or after the applicable Stepdown Date and as long as
a Trigger Event has not occurred with respect to such Mortgage Pool and such
Distribution Date, the amount, if any, by which (x) the sum of (i) the
Component Principal Amounts of the Components of the Senior Certificates and
the Class M-1 and Class M-2 Certificates in the related Component Group after
giving effect to distributions on such Distribution Date and (ii) the
Component Principal Amount of the related Component of the Class B
Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 96.92% and (ii) the Pool Balance for such
Mortgage Pool as of the last day of the related Collection Period and (B) the
amount, if any, by which (i) the Pool Balance for such Mortgage Pool as of the
last day of the related Collection Period exceeds (ii) $4,862,928.
Balloon Mortgage Loan: Any Mortgage Loan having an original term to
---------------------
maturity that is shorter than its amortization schedule, and a final Scheduled
Payment that is disproportionately large in comparison to other Scheduled
Payments.
Balloon Payment: The final Scheduled Payment in respect of a Balloon
---------------
Mortgage Loan.
Bankruptcy: As to any Person, the making of an assignment for the benefit
----------
of creditors, the filing of a voluntary petition in bankruptcy, adjudication
as a bankrupt or insolvent, the entry of an order for relief in a bankruptcy
or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee,
receiver or liquidator, dissolution, or termination, as the case may be, of
such Person pursuant to the provisions of either the United States Bankruptcy
Code of 1986, as amended, or any other similar state laws.
Base Servicing Fee: As defined in the Special Servicing Compensation
------------------
Agreement.
Basis Risk Reserve Fund: With respect to each Mortgage Pool, a fund
-----------------------
created as part of the Trust Fund pursuant to Section 5.08 of this Agreement
but which is not an asset of any of the REMICs.
Basis Risk Shortfall: With respect to any Distribution Date and any
--------------------
Component, the amount by which the Component Interest Rate applicable to such
Component for such date, determined without regard to the applicable Net Funds
Cap for such date, exceeds such Net Funds Cap.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Trustee
--------------------
to the effect that any proposed transfer will not (i) cause the assets of the
Trust Fund to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the
Depositor or the Trustee.
Blanket Mortgage: The mortgage or mortgages encumbering a Cooperative
----------------
Property.
Book-Entry Certificates: Beneficial interests in Certificates designated
-----------------------
as "Book-Entry Certificates" in this Agreement, ownership and transfers of
which shall be evidenced or made through book entries by a Clearing Agency as
described in Section 3.09; provided, that after the occurrence of a condition
whereupon book-entry registration and transfer are no longer permitted and
Definitive Certificates are to be issued to Certificate Owners, such
Book-Entry Certificates shall no longer be "Book-Entry Certificates." As of
the Closing Date, the following Classes of Certificates constitute Book-Entry
Certificates: the Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2 and
Class B Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday, (ii) a day
------------
on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located,
or the State of Maryland, or (iii) with respect to any Remittance Date or any
Servicer reporting date, the States specified in the definition of "Business
Day" in the applicable Servicing Agreement, are authorized or obligated by law
or executive order to be closed.
Carryforward Interest: With respect to any Distribution Date and each
---------------------
Component, the sum of (i) the amount, if any, by which (x) the sum of (A)
Current Interest for such Component for the immediately preceding Distribution
Date and (B) any unpaid Carryforward Interest for such Component from previous
Distribution Dates exceeds (y) the amount distributed in respect of interest
on such Component on such immediately preceding Distribution Date, and (ii)
interest on such amount for the related Accrual Period at the applicable
Component Interest Rate.
Certificate: Any one of the certificates signed and countersigned by the
-----------
Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in accordance
-------------------
with the provisions of Section 4.04.
Certificate Interest Rate: With respect to each Class of Certificates and
-------------------------
any Distribution Date, the applicable per annum rate set forth or described in
the Preliminary Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
-----------------
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate other than
----------------------------
a Class X or Class R Certificate or a Notional Certificate, at the time of
determination, the maximum specified dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
initial principal amount set forth on the face of such Certificate, less the
amount of all principal distributions previously made with respect to such
Certificate and all Applied Loss Amounts previously allocated to such
Certificate.
Certificate Register and Certificate Registrar: The register maintained
-------------------- ---------------------
and the registrar appointed pursuant to Section 3.02.
Certificateholder: The meaning provided in the definition of "Holder."
-----------------
Class: All Certificates bearing the same class designation.
-----
Class Certificate Principal Amount: With respect to each Class of
----------------------------------
Certificates other than the Class X and Class R Certificates and any Class of
Notional Certificates, the aggregate of the Certificate Principal Amounts of
all Certificates of such Class at the date of determination.
Class P-1 Interest: A regular interest in the Pooling REMIC held as an
------------------
asset by REMIC 1 that has an initial principal balance equal to the Cut-off
Date Pool Balance for Pool 1 and having an interest rate equal to the weighted
average by principal balance of the Net Mortgage Rates of the Mortgage Loans
in Pool 1.
Class P-1PO: A regular interest in the Pooling REMIC held as an asset by
-----------
REMIC 1 that has an initial principal balance equal to the amount held in the
Collateralization Account with respect to Pool 1 and which does not bear
interest.
Class P-2 Interest: A regular interest in the Pooling REMIC held as an
------------------
asset by REMIC 1 that has an initial principal balance equal to the Cut-off
Date Pool Balance for Pool 2 and having an interest rate equal to the weighted
average by principal balance of the Net Mortgage Rates of the Mortgage Loans
in Pool 2.
Class P-2PO: A regular interest in the Pooling REMIC held as an asset by
-----------
REMIC 2 that has an initial principal balance equal to the amount held in the
Collateralization Account with respect to Pool 2 and which does not bear
interest.
Class P-3 Interest: A regular interest in the Pooling REMIC held as an
------------------
asset by REMIC 1 that has an initial principal balance equal to the Cut-off
Date Pool Balance for Pool 3 and having an interest rate equal to the weighted
average by principal balance of the Net Mortgage Rates of the Mortgage Loans
in Pool 3.
Class P-3PO: A regular interest in the Pooling REMIC held as an asset by
-----------
REMIC 3 that has an initial principal balance equal to the amount held in the
Collateralization Account with respect to Pool 3 and which does not bear
interest.
Class P-4 Interest: A regular interest in the Pooling REMIC held as an
------------------
asset by REMIC 1 that has an initial principal balance equal to the Cut-off
Date Pool Balance for Pool 4 and having an interest rate equal to the weighted
average by principal balance of the Net Mortgage Rates of the Mortgage Loans
in Pool 4.
Class P-4PO: A regular interest in the Pooling REMIC held as an asset by
-----------
REMIC 4 that has an initial principal balance equal to the amount held in the
Collateralization Account with respect to Pool 4 and which does not bear
interest.
Class PR Interest: The uncertificated residual interest in the Pooling
-----------------
REMIC.
Class R Certificate: The Class R Certificate executed by the Trustee, and
-------------------
authenticated and delivered by the Certificate Registrar, substantially in the
form annexed hereto as Exhibit A-3 and evidencing the ownership of the Class
PR Interest, Class R1 Interest, the Class R2 Interest, the Class R3 Interest,
and the Class R4 Interest.
Class R1 Interest: The uncertificated residual interest in REMIC 1.
-----------------
Class R2 Interest: The uncertificated residual interest in REMIC 2.
-----------------
Class R3 Interest: The uncertificated residual interest in REMIC 3.
-----------------
Class R4 Interest: The uncertificated residual interest in REMIC 4.
-----------------
Class T1-1 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 1 held as an asset of REMIC 2 that has an initial principal
balance equal to 98% of the aggregate balance of the Pooling REMIC regular
interests related to such Mortgage Pool as of the Closing Date, bears interest
at a per annum rate equal to the Net Funds Cap and has such other terms as are
described in Section 5.06. There shall be four Class T1-1 Interests and each
such interest shall relate to a particular Mortgage Pool.
Class T1-2 Interest: With respect to each Mortgage Pool, A regular
-------------------
interest in REMIC 1 held as an asset of REMIC 2 that has an initial principal
balance equal to 1% of the aggregate balance of the Pooling REMIC regular
interests related to such Mortgage Pool as of the Closing Date, bears interest
at a per annum rate equal to the Net Funds Cap and has such other terms as are
described in Section 5.06. There shall be four Class T1-2 Interests and each
such interest shall relate to a particular Mortgage Pool.
Class T1-3 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 1 held as an asset of REMIC 2 that has an initial principal
balance equal to 1% of the aggregate balance of the Pooling REMIC regular
interests related to such Mortgage Pool as of the Closing Date, bears interest
at a per annum rate equal to the Net Funds Cap and has such other terms as are
described in Section 5.06. There shall be four Class T1-3 Interests and each
such interest shall relate to a particular Mortgage Pool.
Class T2-1 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 2 held as an asset of REMIC 3 that has an initial principal
balance equal to 98% of the aggregate balance of the Pooling REMIC regular
interests related to such Mortgage Pool as of the Closing Date, bears interest
at a per annum rate equal to the Net Funds Cap and has such other terms as are
described in Section 5.06. There shall be four Class T2-1 Interests and each
such interest shall relate to a particular Mortgage Pool.
Class T2-2 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 2 held as an asset of REMIC 3 that has an initial principal
balance equal to 1% of the aggregate balance of the Pooling REMIC regular
interests related to such Mortgage Pool as of the Closing Date, bears interest
at a per annum rate equal to the Standard Rate, and has such other terms as
are described in Section 5.06. There shall be four Class T2-2 Interests and
each such interest shall relate to a particular Mortgage Pool.
Class T2-3 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 2 held as an asset of REMIC 3 that has an initial principal
balance equal to 1% of the aggregate balance of the Pooling REMIC regular
interests related to such Mortgage Pool as of the Closing Date, bears interest
at a per annum rate equal to the Net Funds Cap and has such other terms as are
described in Section 5.06. There shall be four Class T2-3 Interests and each
such interest shall relate to a particular Mortgage Pool.
Class T2-4 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 2 held as an asset of REMIC 3, that is entitled to the
interest accruals on the Class T1-2 Interest related to such Mortgage Pool in
excess of the Standard Rate, and that has such other terms as are described in
Section 5.06 hereof. There shall be four Class T2-4 Interests and each such
interest shall relate to a particular Mortgage Pool. The Class T2-4 Interests
shall not have principal balances.
Class T3-1 Distributable Amount: With respect to each T3-1 Interest and
-------------------------------
any Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is 360, (ii) the Class T3-1 Notional Balance immediately
prior to such Distribution Date and (iii) the Class T3-1 Pass-Through Rate.
Class T3-1 Interest: With respect to each Mortgage Pool, a regular
-------------------
interest in REMIC 3 held as an asset of REMIC 4 that has such terms as are
described in Section 5.06. There shall be four Class T3-1 Interests and each
such interest shall relate to a particular Mortgage Pool.
Class T3-1 Notional Balance: With respect to each Mortgage Pool, a
---------------------------
notional principal balance equal as of any date to the sum of the principal
balances of the Class T2-1 and T2-3 Interests related to such Mortgage Pool
for such date.
Class T3-1 Pass-Through Rate: With respect to each T3-1 Interest and any
----------------------------
Distribution Date, a per annum rate equal to the excess of (i) the Net Funds
Cap for such date over (ii) the product of (x) two and (y) a fraction, the
numerator of which is the product of the Standard Rate and the principal
balance of the related Class T2-2 Interest immediately prior to such
Distribution Date and the denominator of which is the sum of the principal
balances of the related Class T2-2 and Class T2-3 Interests immediately prior
to such Distribution Date.
Class T3-2 Distributable Amount: With respect to each T3-2 Interest and
-------------------------------
any Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the number of days in the related Accrual Period and the
denominator of which is 360, (ii) the Class T3-2 Notional Balance immediately
prior to such Distribution Date and (iii) the Class T3-2 Pass-Through Rate.
Class T3-2 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that has such terms as are described in Section 5.06. There shall be
four Class T3-2 Interests and each such interest shall relate to a particular
Mortgage Pool.
Class T3-2 Notional Balance: With respect to each Mortgage Pool, a
---------------------------
notional principal balance equal as of any date to the principal balance of
the Class T2-2 Interest related to such Mortgage Pool for such date.
Class T3-2 Pass-Through Rate: With respect to each T3-2 Interest and any
----------------------------
Distribution Date, a per annum rate equal to the excess of (i) the Standard
Rate over (ii) the product of (x) two and (y) a fraction, the numerator of
which is the product of the Standard Rate and the principal balance of the
related Class T2-2 Interest immediately prior to such Distribution Date and
the denominator of which is the sum of the principal balances of the related
Class T2-2 and Class T2-3 Interests immediately prior to such Distribution
Date.
Class T3-3 Distributable Amount: With respect to any Distribution Date,
-------------------------------
an amount equal to the amount distributable in respect of the related Class
T2-4 Interest for such date.
Class T3-3 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that is entitled to the Class T3-3 Distributable Amount. There shall
be four Class T3-1 Interests and each such interest shall relate to a
particular Mortgage Pool.
Class T3-4 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that, bears interest at the Standard Rate, and has such other terms as
are described in Section 5.06. There shall be four Class T3-4 Interests and
each such interest shall relate to a particular Mortgage Pool. The Class T3-4
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $111,732,166; Pool 2, $114,210,434; Pool 3,
$113,831,331; and Pool 4, $111,226,069.
Class T3-5 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that bears interest at the Standard Rate and has such other terms as
are described in Section 5.06. There shall be four Class T3-5 Interests and
each such interest shall relate to a particular Mortgage Pool. The Class T3-5
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $22,792,371; Pool 2, $22,297,916; Pool 3, $23,220,582;
and Pool 4, $22,689,131.
Class T3-6 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that bears interest at the Standard Rate and has such other terms as
are described in Section 5.06. There shall be four Class T3-6 Interests and
each such interest shall relate to a particular Mortgage Pool. The Class T3-6
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $72,341,003; Pool 2, $73,945,558; Pool 3, $73,700,108;
and Pool 4, $72,013,331.
Class T3-7 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that bears interest at the Standard Rate and has such other terms as
are described in Section 5.06. There shall be four Class T3-7 Interests and
each such interest shall relate to a particular Mortgage Pool. The Class T3-7
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $18,351,822; Pool 2, $18,758,874; Pool 3, $18,696,607;
and Pool 4, $18,268,697.
Class T3-8 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that bears interest at the Standard Rate and has such other terms as
are described in Section 5.06. There shall be four Class T3-8 Interests and
each such interest shall relate to a particular Mortgage Pool. The Class T3-8
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $10,962,140; Pool 2, $11,205,284; Pool 3, $11,168,090;
and Pool 4, $10,912,486.
Class T3-9 Interest: A regular interest in REMIC 3 held as an asset of
-------------------
REMIC 4 that bears interest at the Standard Rate and has such other terms as
are described in Section 5.06. There shall be four Class T3-9 Interests and
each such interest shall relate to a particular Mortgage Pool. The Class T3-9
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $7,237,816; Pool 2, $7,398,355; Pool 3, $7,373,797; and
Pool 4, $7,205,032.
Class T4-1 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-1 Interests and each such interest shall relate to a particular
Mortgage Pool and shall correspond to a Class A-1 Component. The Class T4-1
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $111,732,166; Pool 2, $114,210,434; Pool 3,
$113,831,331; and Pool 4, $111,226,069. Each Class T4-1 Interest shall bear
interest at the corresponding Class A-1 Component Interest Rate.
Class T4-2 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-2 Interests and each such interest shall relate to a particular
Mortgage Pool and shall correspond to a Class A-2 Component. The Class T4-2
Interests shall have the following initial principal balances as of the
Closing Date:. Pool 1, $22,792,371; Pool 2, $22,297,916; Pool 3, $23,220,582;
and Pool 4 $22,689,131. Each Class T4-2 Interest shall bear interest at the
corresponding Class A-2 Component Interest Rate.
Class T4-3 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-3 Interests and each such interest shall relate to a particular
Mortgage Pool and shall correspond to a Class A-3 Component. The Class T4-3
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $72,341,003; Pool 2, $73,945,558; Pool 3, $73,700,108;
and Pool 4, $72,013,331. Each Class T4-3 Interest shall bear interest at the
corresponding Class A-3 Component Interest Rate.
Class T4-4 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-4 Interests and each such interest shall relate to a particular
Mortgage Pool and shall correspond to a Class M-1 Component. The Class T4-4
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $18,351,822; Pool 2, $18,758,874; Pool 3, $18,696,607;
and Pool 4, $18,268,697. Each Class T4-4 Interest shall bear interest at the
corresponding Class M-1 Component Interest Rate.
Class T4-5 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-5 Interests and each such interest shall relate to a particular
Mortgage Pool and shall correspond to a Class M-2 Component. The Class T4-5
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $10,962,140; Pool 2, $11,205,284; Pool 3, $11,168,090;
and Pool 4, $10,912,486. Each Class T4-5 Interest shall bear interest at the
corresponding Class M-2 Component Interest Rate.
Class T4-6 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-6 Interests and each such interest shall relate to a particular
Mortgage Pool and shall correspond to a .Class B Component The Class T4-6
Interests shall have the following initial principal balances as of the
Closing Date: Pool 1, $7,237,816; Pool 2, $7,398,355; Pool 3, $7,373,797; and
Pool 4, $7,205,032. Each Class T4-6 Interest shall bear interest at the
corresponding Class B Component Interest Rate.
Class T4-7 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-7 Interests and each such interest shall relate to a particular Class
T3-4 Interest and shall be entitled to all interest accruals on the related
Class T3-4 Interest in excess of interest accruing thereon at the
corresponding Class A-1 Component Interest Rate.
Class T4-8 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-8 Interests and each such interest shall relate to a particular Class
T3-5 Interest and shall be entitled to all interest accruals on the related
Class T3-5 Interest in excess of interest accruing thereon at the
corresponding Class A-2 Component Interest Rate.
Class T4-9 Interest: A regular interest in REMIC 4. There shall be four
-------------------
Class T4-9 Interests and each such interest shall relate to a particular Class
T3-6 Interest and shall be entitled to all interest accruals on the related
Class T3-6 Interest in excess of interest accruing thereon at the
corresponding Class A-3 Component Interest Rate.
Class T4-10 Interest: A regular interest in REMIC 4. There shall be four
--------------------
Class T4-10 Interests and each such interest shall relate to a particular
Class T3-7 Interest and shall be entitled to all interest accruals on the
related Class T3-7 Interest in excess of interest accruing thereon at the
corresponding Class M-1 Component Interest Rate.
Class T4-11 Interest: A regular interest in REMIC 4. There shall be four
--------------------
Class T4-11 Interests and each such interest shall relate to a particular
Class T3-8 Interest and shall be entitled to all interest accruals on the
related Class T3-8 Interest in excess of interest accruing thereon at the
corresponding Class M-2 Component Interest Rate
Class T4-12 Distributable Amount: With respect to the Class T3-1, Class
--------------------------------
T3-2, and Class T3-3 Interests corresponding to any Mortgage Pool and for any
Distribution Date, an amount equal to the sum of the Class T3-1 Distributable
Amount, the Class T3-2 Distributable Amount and the Class T3-3 Distributable
Amount for such date.
Class T4-12 Interest: A regular interest in REMIC 4. There shall be four
--------------------
Class T4-12 Interests and each such interest will relate to the Class T3-1,
Class T3-2, and the Class T3-3 Interests related to a particular Mortgage
Pool. .
Class X Certificate: Any Class X-1, Class X-2, Class X-3 or Class X-4
-------------------
Certificate.
Class X Distributable Amount: Any of the Class X-1 Distributable Amount,
----------------------------
Class X-2 Distributable Amount, Class X-3 Distributable Amount and Class X-4
Distributable Amount, as applicable.
Class X-1 Distributable Amount: With respect to any Distribution Date,
------------------------------
the aggregate of the amounts distributable on the Class T4-7, Class T4-8,
Class T4-9, Class T4-10, Class T4-11, and Class T4-12 Interests related to
Pool 1 on such date.
Class X-2 Distributable Amount: With respect to any Distribution Date,
------------------------------
the aggregate of the amounts distributable on the Class T4-7, Class T4-8,
Class T4-9, Class T4-10, Class T4-11, and Class T4-12 Interests related to
Pool 2 on such date.
Class X-3 Distributable Amount: With respect to any Distribution Date,
------------------------------
the aggregate of the amounts distributable on the Class T4-7, Class T4-8,
Class T4-9, Class T4-10, Class T4-11, and Class T4-12 Interests related to
Pool 3 on such date.
Class X-4 Distributable Amount: With respect to any Distribution Date,
------------------------------
the aggregate of the amounts distributable on the Class T4-7, Class T4-8,
Class T4-9, Class T4-10, Class T4-11, and Class T4-12 Interests related to
Pool 4 on such date.
Class Y Certificate: Any Class Y-1, Class Y-2, Class Y-3 or Class Y-4
-------------------
Certificate.
Class Y-1 Certificate: The Class Y-1 Certificate signed and countersigned
---------------------
by the Trustee in substantially the form attached hereto as part of Exhibit A,
evidencing ownership of a participation interest in the Class X-1 Certificate
entitling the holder thereof to receive the Initial Class X-1 Distributable
Amount as provided herein.
Class Y-2 Certificate: The Class Y-2 Certificate signed and countersigned
---------------------
by the Trustee in substantially the form attached hereto as part of Exhibit A,
evidencing ownership of a participation interest in the Class X-2 Certificate
entitling the holder thereof to receive the Initial Class X-2 Distributable
Amount as provided herein.
Class Y-3 Certificate: The Class Y-3 Certificate signed and countersigned
---------------------
by the Trustee in substantially the form attached hereto as part of Exhibit A,
evidencing ownership of a participation interest in the Class X-3 Certificate
entitling the holder thereof to receive the Initial Class X-3 Distributable
Amount as provided herein.
Class Y-4 Certificate: The Class Y-4 Certificate signed and countersigned
---------------------
by the Trustee in substantially the form attached hereto as part of Exhibit A,
evidencing ownership of a participation interest in the Class X-4 Certificate
entitling the holder thereof to receive the Initial Class X-4 Distributable
Amount as provided herein.
Clearing Agency: An organization registered as a "clearing agency"
---------------
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust
Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
---------------------------
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closing Date: July 30, 1998.
------------
Code: The Internal Revenue Code of 1986, as amended, and as it may be
----
further amended from time to time, any successor statutes thereto.
Collateralization Account: With respect to each Mortgage Pool, an account
-------------------------
created as part of the Trust Fund pursuant to Section 4.07 of this Agreement
but which shall not be an asset of any of the REMICs, unless and until
transferred into any REMIC pursuant to this Agreement.
Collection Account: A separate account established and maintained by the
------------------
Master Servicer pursuant to Section 4.01.
Collection Period: With respect to any Distribution Date, the period
-----------------
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.
Compensating Interest Payment: With respect to each Mortgage Pool and any
-----------------------------
Distribution Date, an amount equal to the excess of (x) the aggregate of any
Prepayment Interest Shortfalls with respect to such Mortgage Pool and such
Distribution Date over (y) the aggregate of any amounts required to be paid by
the Servicers in respect of such shortfalls but not paid; provided, that such
amount shall not exceed the Aggregate Master Servicing Compensation that would
be payable to the Master Servicer in respect of such Mortgage Pool and such
Distribution Date without giving effect to any Compensating Interest Payment.
Component: Any of the components of a Class of Publicly Offered
---------
Certificates having the designations and initial Component Principal Amounts
as follows:
Component
---------
Component Principal Amount
--------- ----------------
A-1(1)........................................ $111,732,166.00
A-1(2)........................................ 114,210,434.00
A-1(3)........................................ 113,831,331.00
A-1(4)........................................ 111,226,069.00
A-2(1)........................................ 22,792,371.00
A-2(2)........................................ 23,297,916.00
A-2(3)........................................ 23,220,582.00
A-2(4)........................................ 22,689,131.00
A-3(1)........................................ 72,341,003.00
A-3(2)........................................ 73,945,558.00
A-3(3)........................................ 73,700,108.00
A-3(4)........................................ 72,013,331.00
M-1(1)........................................ 18,351,822.00
M-1(2)........................................ 18,758,874.00
M-1(3)........................................ 18,696,607.00
M-1(4)........................................ 18,268,697.00
M-2(1)........................................ 10,962,140.00
M-2(2)........................................ 11,205,284.00
M-2(3)........................................ 11,168,090.00
M-2(4)........................................ 10,912,486.00
B(1)........................................ 7,237,816.00
B(2)........................................ 7,398,355.00
B(3)........................................ 7,373,797.00
B(4)........................................ 7,205,032.00
Component Group: The Group 1 Components, the Group 2 Components, the
---------------
Group 3 Components or the Group 4 Components, as applicable.
Component Interest Rate: With respect to each Component and any
-----------------------
Distribution Date, the per annum rate of interest determined as follows:
The Component Interest Rate with respect to any Distribution Date
for the A-1(1), A-1(2), A-1(3) and A-1(4) Components is the per annum
rate equal to the least of (i) LIBOR plus 0.15%, (ii) 9.50% and (iii) the
Net Funds Cap for the related Mortgage Pool for such Distribution Date;
provided, that if the holder of the Class X Certificate relating to any
Mortgage Pool does not exercise its option to purchase the Mortgage Loans
and related property in such Mortgage Pool pursuant to Section 7.01(b) on
the Distribution Date on which it is first entitled to do so, then with
respect to such Distribution Date and each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Component of the Class A-1 Certificates relating to such Mortgage
Pool will be the Fed Funds Average Rate plus 0.30%.
The Component Interest Rate with respect to any Distribution Date
for the A-2(1), A-2(2), A-2(3) and A-2(4) Components is the per annum
rate equal to the least of (i) LIBOR plus 0.25%, (ii) 9.50% and (iii) the
Net Funds Cap for the related Mortgage Pool for such Distribution Date;
provided, that if the holder of the Class X Certificate relating to any
Mortgage Pool does not exercise its option to purchase the Mortgage Loans
and related property in such Mortgage Pool pursuant to Section 7.01(b) on
the Distribution Date on which it is first entitled to do so, then with
respect to such Distribution Date and each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Component of the Class A-2 Certificates relating to such Mortgage
Pool will be LIBOR plus 0.50%.
The Component Interest Rate with respect to any Distribution Date
for the A-3(1), A-3(2), A-3(3) and A-3(4) Components is the per annum
rate equal to the least of (i) LIBOR plus 0.26%, (ii) 9.50% and (iii) the
Net Funds Cap for the related Mortgage Pool for such Distribution Date;
provided, that if the holder of the Class X Certificate relating to any
Mortgage Pool does not exercise its option to purchase the Mortgage Loans
and related property in such Mortgage Pool pursuant to Section 7.01(b) on
the Distribution Date on which it is first entitled to do so, then with
respect to such Distribution Date and each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Component of the Class A-3 Certificates relating to such Mortgage
Pool will be LIBOR plus 0.52%.
The Component Interest Rate with respect to any Distribution Date
for the M-1(1), M-1(2), M-1(3) and M-1(4) Components is the per annum
rate equal to the least of (i) LIBOR plus 0.47%, (ii) 9.50% and (iii) the
Net Funds Cap for the related Mortgage Pool for such Distribution Date;
provided, that if the holder of the Class X Certificate relating to any
Mortgage Pool does not exercise its option to purchase the Mortgage Loans
and related property in such Mortgage Pool pursuant to Section 7.01(b) on
the Distribution Date on which it is first entitled to do so, then with
respect to such Distribution Date and each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Component of the Class M-1 Certificates relating to such Mortgage
Pool will be LIBOR plus 0.94%.
The Component Interest Rate with respect to any Distribution Date
for the M-2(1), M-2(2), M-2(3) and M-2(4) Components is the per annum
rate equal to the least of (i) LIBOR plus 0.60%, (ii) 9.50% and (iii) the
Net Funds Cap for the related Mortgage Pool for such Distribution Date;
provided, that if the holder of the Class X Certificate relating to any
Mortgage Pool does not exercise its option to purchase the Mortgage Loans
and related property in such Mortgage Pool pursuant to Section 7.01(b) on
the Distribution Date on which it is first entitled to do so, then with
respect to such Distribution Date and each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Component of the Class M-1 Certificates relating to such Mortgage
Pool will be LIBOR plus 1.10%.
The Component Interest Rate with respect to any Distribution Date
for the B(1), B(2), B(3) and B(4) Components is the per annum rate equal
to the least of (i) LIBOR plus 1.30%, (ii) 9.50% and (iii) the Net Funds
Cap for the related Mortgage Pool for such Distribution Date; provided,
that if the holder of the Class X Certificate relating to any Mortgage
Pool does not exercise its option to purchase the Mortgage Loans and
related property in such Mortgage Pool pursuant to Section 7.01(b) on the
Distribution Date on which it is first entitled to do so, then with
respect to such Distribution Date and each subsequent Distribution Date
the per annum rate calculated pursuant to clause (i) above with respect
to the Component of the Class M-1 Certificates relating to such Mortgage
Pool will be LIBOR plus 1.80%.
Component Principal Amount: With respect to any Component and any
--------------------------
Distribution Date, the initial Component Principal Amount thereof as set forth
in the definition of Component, less the sum of (i) all amounts distributed in
reduction thereof on previous Distribution Dates pursuant to Section 5.02 and
(ii) the amount of all Applied Loss Amounts previously allocated thereto
pursuant to Section 5.03.
Conventional Loan: A Mortgage Loan that is not insured by the United
-----------------
States Federal Housing Administration or guaranteed by the United States
Veterans Administration.
Converted Mortgage Loan: None.
-----------------------
Convertible Mortgage Loan: None.
-------------------------
Cooperative Corporation: The entity that holds title (fee or an
-----------------------
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Cooperative Shares and a
----------------
Proprietary Lease.
Cooperative Loan Documents: As to any Cooperative Loan, (i) the
--------------------------
Cooperative Shares, together with a stock power in blank; (ii) the original
executed Security Agreement and the assignment of the Security Agreement
endorsed in blank; (iii) the original executed Proprietary Lease and the
assignment of the Proprietary Lease endorsed in blank; (iv) the original
executed Recognition Agreement and the assignment of the Recognition Agreement
(or a blanket assignment of all Recognition Agreements) endorsed in blank; (v)
the executed UCC-1 financing statement with evidence of recording thereon,
which has been filed in all places required to perfect the security interest
in the Cooperative Shares and the Proprietary Lease; and (vi) executed UCC-3
financing statements (or copies thereof) 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).
Cooperative Property: The real property and improvements owned by the
--------------------
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the Cooperative Shares of the Cooperative Corporation.
Cooperative Shares: Shares issued by a Cooperative Corporation.
------------------
Cooperative Unit: A single family dwelling located in a Cooperative
----------------
Property.
Corporate Trust Office: The principal corporate trust office of the
----------------------
Trustee at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Structured Finance Services.
Current Interest: With respect to each Component and any Distribution
----------------
Date, the aggregate amount of interest accrued during the related Accrual
Period at the applicable Component Interest Rate on the Component Principal
Amount of such Component immediately prior to such Distribution Date.
Custodial Agreement: Each custodial agreement attached as Exhibit K
-------------------
hereto, and any custodial agreement subsequently executed by the Trustee
substantially in the form thereof.
Custodian: Each custodian appointed by the Trustee pursuant to a
---------
Custodial Agreement, and any successor thereto.
Cut-off Date: July 1, 1998.
------------
Cut-off Date Aggregate Loan Balance: With respect to the Mortgage Loans
-----------------------------------
in the Trust Fund on the Closing Date, the Aggregate Loan Balance as of the
Cut-off Date.
Cut-off Date Pool Balance: With respect to each Mortgage Pool, the Pool
-------------------------
Balance thereof as of the Cut-off Date.
DCR: Duff & Xxxxxx Credit Rating Co., or any successor in interest.
---
Deferred Amount: With respect to any Distribution Date and each
---------------
Component, the aggregate of Applied Loss Amounts previously applied in
reduction of the Component Principal Amount thereof, less any amounts
previously reimbursed in respect thereof.
Deferred Interest: With respect to any Class of Negative Amortization
-----------------
Certificates and any Distribution Date, the lesser of (x) the applicable
Interest Distribution Amount for such date (without giving effect to any
Deferred Interest) and (y) the aggregate Mortgage Loan Negative Amortization,
if any, for the related Collection Period.
Definitive Certificate: A Certificate of any Class issued in definitive,
----------------------
fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the Trust
---------------------
Fund pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
Deposit Date: With respect to each Distribution Date, the second Business
------------
Day preceding such Distribution Date.
Depositor: Structured Asset Securities Corporation, a Delaware
---------
corporation having its principal place of business in New York, or its
successors in interest.
Determination Date: With respect to each Distribution Date, the 18th day
------------------
of the month in which such Distribution Date occurs, or, if such 18th day is
not a Business Day, the next succeeding Business Day.
Directing Holder: As to each Mortgage Pool, as defined in the Special
----------------
Servicing Agreement.
Disqualified Organization: Either (i) the United States, (ii) any state
-------------------------
or political subdivision thereof, (iii) any foreign government, (iv) any
international organization, (v) any agency or instrumentality of any of the
foregoing, (vi) any tax-exempt organization (other than a cooperative
described in section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code unless such organization is subject to the tax imposed
by section 511 of the Code, (vii) any organization described in section
1381(a)(2)(C) of the Code, or (viii) any other entity designated as a
Disqualified Organization by relevant legislation amending the REMIC
Provisions and in effect at or proposed to be effective as of the time of the
determination. In addition, a corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of
directors is not selected by such governmental unit.
Distribution Date: The 25th day of each month or, if such 25th day is not
-----------------
a Business Day, the next succeeding Business Day, commencing in August 1998.
Due Date: With respect to any Mortgage Loan, the date on which a
--------
Scheduled Payment is due under the related Mortgage Note.
Eligible Account: Either (i) an account or accounts maintained with a
----------------
federal or state chartered depository institution or trust company acceptable
to the Rating Agencies or (ii) an account or accounts the deposits in which
are insured by the FDIC to the limits established by such corporation,
provided that any such deposits not so insured shall be maintained in an
account at a depository institution or trust company whose commercial paper or
other short term debt obligations (or, in the case of a depository institution
or trust company which is the principal subsidiary of a holding company, the
commercial paper or other short term debt or deposit obligations of such
holding company or depository institution, as the case may be) have been rated
by each Rating Agency in its highest short-term rating category, or (iii) a
segregated trust account or accounts (which shall be a "special deposit
account") maintained with the Trustee or any other federal or state chartered
depository institution or trust company, acting in its fiduciary capacity, in
a manner acceptable to the Trustee and the Rating Agencies. Eligible Accounts
may bear interest.
Eligible Investments: Any one or more of the following obligations or
--------------------
securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America
or any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America ("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories and the Trustee or any agent of the Trustee, acting in its
respective commercial capacity) incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal or state banking authorities, so
long as at the time of investment or the contractual commitment providing
for such investment the commercial paper or other short-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a holding company, the commercial paper or other short-term
debt or deposit obligations of such holding company or deposit
institution, as the case may be) have been rated by each Rating Agency in
its highest short-term rating category or one of its two highest
long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, FNMA or FHLMC with any registered
broker/dealer subject to Securities Investors' Protection Corporation
jurisdiction or any commercial bank insured by the FDIC, if such
broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which have a credit rating from each Rating Agency,
at the time of investment or the contractual commitment providing for
such investment, at least equal to one of the two highest long-term
credit rating categories of each Rating Agency; PROVIDED, HOWEVER, that
securities issued by any particular corporation will not be Eligible
Investments to the extent that investment therein will cause the then
outstanding principal amount of securities issued by such corporation and
held as part of the Trust Fund to exceed 20% of the sum of the Aggregate
Loan Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; provided, further, that such
securities will not be Eligible Investments if they are published as
being under review with negative implications from either Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or investment,
(A) rated in the highest rating category by each Rating Agency or (B) that
would not adversely affect the then current rating by either Rating Agency
of any of the Certificates. Such investments in this subsection (viii) may
include money market mutual funds, including, without limitation, the VISTA
U.S. Government Money Market Fund or any other fund for which The Chase
Manhattan Bank (the "Bank"), the Trustee or an affiliate thereof serves as
an investment advisor, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that (i) the Bank or an
affiliate thereof charges and collects fees and expenses from such funds
for services rendered, (ii) the Bank or an affiliate thereof charges and
collects fees and expenses for services rendered pursuant to this
Agreement, and (iii) services performed for such funds and pursuant to this
Agreement may converge at any time. The Trustee specifically authorizes the
Bank or an affiliate thereof to charge and collect from the Trustee such
fees as are collected from all investors in such funds for services
rendered to such funds (but not to exceed investment earnings thereon);
PROVIDED, HOWEVER, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted investment" within the meaning of Section
860G(a)(5) of the Code.
ERISA-Restricted Certificate: Any Subordinate Certificate or Class Y
----------------------------
Certificate.
Escrow Account: Any account established and maintained by the applicable
--------------
Servicer pursuant to the applicable Servicing Agreement.
Event of Default: Any one of the conditions or circumstances enumerated
----------------
in Section 6.14(a).
Extra Principal Distribution Amount: With respect to each Mortgage Pool
-----------------------------------
and any Distribution Date, the lesser of (a) Monthly Excess Interest for such
Mortgage Pool for such Distribution Date and (b) the Overcollateralization
Deficiency for such Mortgage Pool for such date.
Extra Servicing Fee: Amounts payable to the Servicer under Section 5.07
-------------------
of this Agreement.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
----
Fed Funds Average Rate: With respect to each Accrual Period other than
----------------------
the initial Accrual Period, the fraction, expressed as a percentage, the
numerator of which will be equal to the sum of each day's Fed Funds Rate,
determined as provided in Section 4.06, during the applicable Fed Funds
Calculation Period and the denominator of which will be equal to the number of
days in such Fed Funds Calculation Period.
Fed Funds Business Day: Any day other than a Saturday or Sunday or a day
----------------------
on which banking institutions in New York, New York are closed.
Fed Funds Calculation Period: With respect to each Accrual Period other
----------------------------
than the initial Accrual Period, the period commencing the 19th day of the
calendar month immediately preceding the month in which the related
Distribution Date occurs and ending on the 18th day of the month in which the
related Distribution Date occurs.
Fed Funds Certificate: None.
---------------------
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
-----
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Scheduled Distribution Date: With respect to the Class A-1 and
---------------------------------
Class A-2 Certificates, August 25, 2022; with respect to the Class A-3, Class
M-1, Class M-2 and Class B Certificates, August 25, 2028.
Financial Intermediary: A broker, dealer, bank or other financial
----------------------
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
Fitch: Fitch IBCA, Inc., or any successor in interest.
-----
FNMA: The Federal National Mortgage Association, a federally chartered
----
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
GNMA: The Government National Mortgage Association, a wholly owned
----
corporate instrumentality of the United States within HUD.
Group 1 Component: Any A-1(1), A-2(1), A-3(1), M-1(1), M-2(1) or B(1)
-----------------
Component.
Group 2 Component: Any A-1(2), A-2(2), A-3(2), M-1(2), M-2(2) or B(2)
-----------------
Component.
Group 3 Component: Any A-1(3), A-2(3), A-3(3), M-1(3), M-2(3) or B(3)
-----------------
Component.
Group 4 Component: Any A-1(4), A-2(4), A-3(4), M-1(4), M-2(4) or B(4)
-----------------
Component.
Holder or Certificateholder: The registered owner of any Certificate as
------ -----------------
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor, the
Trustee, the Master Servicer, any Servicer or any Affiliate thereof shall be
deemed not to be outstanding in determining whether the requisite percentage
necessary to effect any such consent has been obtained, except that, in
determining whether the Trustee shall be protected in relying upon any such
consent, only Certificates which a Responsible Officer of the Trustee knows to
be so owned shall be disregarded. The Trustee may request and conclusively
rely on certifications by the Depositor, the Master Servicer and any Servicer
in determining whether any Certificates are registered to an Affiliate of the
Depositor, the Master Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development, or
---
any successor thereto.
Independent: When used with respect to any Accountants, a Person who is
-----------
"independent" within the meaning of Rule 2-01(b) of the Securities and
Exchange Commission's Regulation S-X. When used with respect to any other
Person, a Person who (a) is in fact independent of another specified Person
and any Affiliate of such other Person, (b) does not have any material direct
financial interest in such other Person or any Affiliate of such other Person,
and (c) is not connected with such other Person or any Affiliate of such other
Person as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
Index: The index specified in the related Mortgage Note for calculation
-----
of the Mortgage Rate thereof.
Initial Class X Distributable Amount: With respect to the Class X-1
------------------------------------
Certificate, the first $2,465,869.35 distributable in respect of such
Certificate; with respect to the Class X-2 Certificate, the first
$2,520,563.97 distributable in respect of such Certificate; with respect to
the Class X-3 Certificate, the first $2,512,198.23 distributable in respect of
such Certificate; and with respect to the Class X-4 Certificate, the first
$2,454,701.01 distributable in respect of Certificate.
Initial LIBOR Rate: 5.65625%.
------------------
Initial Fed Funds Average Rate: None.
------------------------------
Initial Loss Mitigation Fee: As defined in the Special Servicing
---------------------------
Compensation Agreement.
Insurance Policy: Any Primary Mortgage Insurance Policy and any standard
----------------
hazard insurance policy, flood insurance policy, earthquake insurance policy
or title insurance policy relating to the Mortgage Loans or the Mortgaged
Properties, to be in effect as of the Closing Date or thereafter during the
term of this Agreement.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
------------------
Policy, other than amounts to be applied to restoration or repair of the
related Mortgaged Property or required to be paid over to the Mortgagor
pursuant to law or the related Mortgage Note.
Interest Distribution Amount: Not applicable.
----------------------------
Interest Remittance Amount: With respect to each Mortgage Pool and any
--------------------------
Distribution Date, (a) the sum of (i) all interest collected (other than
Payaheads) or advanced in respect of Scheduled Payments on the Mortgage Loans
in such Mortgage Pool, including any prepayment premiums or penalties, during
the related Collection Period (less (x) the Master Servicing Fee and the
applicable Servicing Fee with respect to such Mortgage Loans and (y)
unreimbursed Advances and other amounts due to the Master Servicer, the
Servicers or the Trustee with respect to such Mortgage Loans, to the extent
allocable to interest), (ii) any amounts paid by the Servicers with respect to
Prepayment Interest Shortfalls with respect to such Mortgage Loans and any
Compensating Interest Payment with respect to such Mortgage Loans with respect
to the related Prepayment Period, (iii) the portion of any Substitution Amount
paid with respect to such Mortgage Loans during the related Prepayment Period
allocable to interest and (iv) all Net Liquidation Proceeds, Insurance
Proceeds and other recoveries collected with respect to such Mortgage Loans
during the related Prepayment Period, to the extent allocable to interest, as
reduced in each case by unreimbursed interest Advances and other amounts due
the Master Servicer, the Servicers or the Trustee, to the extent allocable to
interest, as reduced by (b) any expenses of the Trustee reimbursable pursuant
to Section 6.11 and not reimbursed pursuant to clauses (i) or (iv) above.
Intervening Assignments: The original intervening assignments of the
-----------------------
Mortgage, notice of transfer or equivalent instrument.
Latest Possible Maturity Date: August 25, 2030.
-----------------------------
Xxxxxx Capital: Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
--------------
Inc., or any successor in interest.
LIBOR: The per annum rate determined pursuant to Section 4.05 on the
-----
basis of London interbank offered rate quotations for one-month Eurodollar
deposits, as such quotations may appear on the display designated as page
"LIUS01M" on the Bloomberg Financial Markets Commodities News (or such other
page as may replace such page on that service for the purpose of displaying
London interbank offered quotations of major banks).
LIBOR Certificate: Any Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class
-----------------
M-2 or Class B Certificate.
LIBOR Determination Date: The second London Business Day immediately
------------------------
preceding the commencement of each Accrual Period for any LIBOR Certificates.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
------------------------
Master Servicer or the applicable Servicer has determined that all amounts
that it expects to recover on behalf of the Trust Fund from or on account of
such Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master Servicer
--------------------
or a Servicer in connection with the liquidation of any defaulted Mortgage
Loan and are not recoverable under the applicable Primary Mortgage Insurance
Policy, including, without limitation, foreclosure and rehabilitation
expenses, legal expenses and unreimbursed amounts expended pursuant to
Sections 9.06, 9.16 or 9.22.
Liquidation Proceeds: Cash received in connection with the liquidation of
--------------------
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of
the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan, including any amounts remaining in the
related Escrow Account.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of the
-------------------
principal balance of such Mortgage Loan at origination, or such other date as
is specified, to the Original Value thereof.
London Business Day: Any day on which banks are open for dealing in
-------------------
foreign currency and exchange in London, England and New York City.
Loss Mitigation Fee: As defined in the Special Servicing Compensation
-------------------
Agreement.
M-1 Principal Distribution Amount: With respect to each Mortgage Pool and
---------------------------------
any Distribution Date on or after the applicable Stepdown Date and as long as
a Trigger Event has not occurred with respect to such Mortgage Pool and such
Distribution Date, the amount, if any, by which (x) the sum of (i) the
Component Principal Amounts of the Senior Components in the related Component
Group after giving effect to distributions on such Distribution Date and (ii)
the Component Principal Amount of the related Component of the Class M-1
Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 81.81% and (ii) the Pool Balance for such
Mortgage Pool as of the last day of the related Collection Period and (B) the
amount, if any, by which (i) the Pool Balance for such Mortgage Pool as of the
last day of the related Collection Period exceeds (ii) $4,862,928.
M-2 Principal Distribution Amount: With respect to each Mortgage Pool and
---------------------------------
any Distribution Date on or after the applicable Stepdown Date and as long as
a Trigger Event has not occurred with respect to such Mortgage Pool and such
Distribution Date, the amount, if any, by which (x) the sum of (i) the
Component Principal Amounts of the Components of the Senior Certificates and
the Class M-1 Certificates in the related Component Group after giving effect
to distributions on such Distribution Date and (ii) the Component Principal
Amount of the related Component of the Class M-2 Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of
(i) 90.91% and (ii) the Pool Balance for such Mortgage Pool as of the last day
of the related Collection Period and (B) the amount, if any, by which (i) the
Pool Balance for such Mortgage Pool as of the last day of the related
Collection Period exceeds (ii) $4,862,928.
Maintenance: With respect to any Cooperative Unit, the rent or fee paid
-----------
by the Mortgagor to the Cooperative Corporation pursuant to the Proprietary
Lease.
Master Servicer: Norwest Bank Minnesota, National Association, or any
---------------
successor in interest, or if any successor master servicer shall be appointed
as herein provided, then such successor master servicer.
Master Servicing Fee: As to any Distribution Date and each Mortgage Loan,
--------------------
an amount equal to the product of the Master Servicing Fee Rate and the
outstanding principal balance of such Mortgage Loan as of the first day of the
related Collection Period. The Master Servicing Fee for any Mortgage Loan
shall be payable in respect of any Distribution Date solely from the interest
portion of the Scheduled Payment or other payment or recovery with respect to
such Mortgage Loan.
Master Servicing Fee Rate: 0.00% per annum.
-------------------------
Material Defect: As defined in Section 2.02(c) hereof.
---------------
Monthly Excess Cashflow: With respect to each Mortgage Pool and any
-----------------------
Distribution Date, the sum of (x) Monthly Excess Interest for such Mortgage
Pool for such date and (y) the Overcollateralization Release Amount for such
Mortgage Pool for such date.
Monthly Excess Interest: With respect to each Mortgage Pool and any
-----------------------
Distribution Date, the amount of any Interest Remittance Amount for such
Mortgage Pool remaining after application pursuant to clauses (i) through (v)
of Section 5.02(b) on such date.
Moody's: Xxxxx'x Investors Service, Inc., or any successor in interest.
-------
Mortgage: A mortgage, deed of trust or other instrument encumbering a fee
--------
simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage File: The mortgage documents listed in Section 2.01(b)
-------------
pertaining to a particular Mortgage Loan required to be delivered to the
Trustee pursuant to this Agreement.
Mortgage Loan: A Mortgage and the related notes or other evidences of
-------------
indebtedness secured by each such Mortgage conveyed, transferred, sold,
assigned to or deposited with the Trustee pursuant to Section 2.01 or Section
2.05, including without limitation, each Mortgage Loan listed on the Mortgage
Loan Schedule, as amended from time to time.
Mortgage Loan Negative Amortization: Not applicable.
-----------------------------------
Mortgage Loan Sale Agreement: The agreement, dated as of July 1, 1998,
----------------------------
for the sale of the Mortgage Loans by Xxxxxx Capital, A Division of Xxxxxx
Brothers Holdings Inc., to the Depositor.
Mortgage Loan Schedule: The schedule attached hereto as Schedule A, which
----------------------
shall identify each Mortgage Loan, as such schedule may be amended from time
to time to reflect the addition of Mortgage Loans to, or the deletion of
Mortgage Loans from, the Trust Fund.
Mortgage Note: The note or other evidence of the indebtedness of a
-------------
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: Any of Pool 1, Pool 2, Pool 3 or Pool 4.
-------------
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
-------------
interest accrues on such Mortgage Loan.
Mortgaged Property: Either of (x) the fee simple interest in real
------------------
property, together with improvements thereto including any exterior
improvements to be completed within 120 days of disbursement of the related
Mortgage Loan proceeds, or (y) in the case of a Cooperative Loan, the related
Cooperative Shares and Proprietary Lease, securing the indebtedness of the
Mortgagor under the related Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
---------
Negative Amortization Certificate: None.
---------------------------------
Net Excess Spread: With respect to each Mortgage Pool and any
-----------------
Distribution Date, a fraction, expressed as a percentage, the numerator of
which is equal to the amount, if any, by which (a) the Interest Remittance
Amount exceeds (b) the Current Interest payable with respect to each of the
Components in the Component Group related to such Mortgage Pool for such
Distribution Date, and the denominator of which is the product of (x) the Pool
Balance for such Mortgage Pool and (y) the actual number of days in the
related Accrual Period divided by 360.
Net Funds Cap: With respect to each Mortgage Pool and any Distribution
-------------
Date, a fraction, expressed as a percentage, the numerator of which is the
Interest Remittance Amount for such date and the denominator of which is the
product of (a) the aggregate of the principal balances of the Pooling REMIC
Regular Interests related to such Mortgage Pool as of the first day of the
related Accrual Period and (b) the actual number of days in the related
Accrual Period divided by 360.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
------------------------
the related Liquidation Proceeds net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances, if any,
received and retained in connection with the liquidation of such Mortgage
Loan.
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
-----------------
thereof reduced by the sum of the applicable Servicing Fee Rate, the Master
Servicing Fee Rate and the Trustee Fee Rate.
Net Prepayment Interest Shortfall: With respect to each Mortgage Pool and
---------------------------------
any Distribution Date, the excess, if any, of any Prepayment Interest
Shortfalls with respect to the Mortgage Loans in such Mortgage Pool for such
date over the sum of any amounts paid by the Servicers with respect to such
shortfalls and any amount that is required to be paid by the Master Servicer
in respect of such shortfalls pursuant to this Agreement.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
--------------------------
Certificate.
Notional Amount: With respect to any Notional Certificate and any
---------------
Distribution Date, such Certificate's Percentage Interest of the Aggregate
Notional Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: None.
--------------------
Offering Document: The Prospectus.
-----------------
Officer's Certificate: A certificate signed by the Chairman of the Board,
---------------------
any Vice Chairman, the President, any Vice President or any Assistant Vice
President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
------------------
in form and substance to the Trustee, and who may be in-house or outside
counsel to the Depositor, the Master Servicer or a Servicer but which must be
Independent outside counsel with respect to any such opinion of counsel
concerning the transfer of any Residual Certificate or concerning certain
matters with respect to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or the taxation, or the federal income tax status, of
each REMIC.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
--------------
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor
at the time the related Mortgage Loan was originated.
Overcollateralization Amount: With respect to each Mortgage Pool and
----------------------------
any Distribution Date, the amount, if any, by which (x) the Pool Balance for
such Mortgage Pool as of the last day of the related Collection Period exceeds
(y) the aggregate Component Principal Amount of the related Components after
giving effect to distributions on such Distribution Date.
Overcollateralization Deficiency: With respect to each Mortgage Pool and
--------------------------------
any Distribution Date, the amount, if any, by which (x) the Targeted
Overcollateralization Amount for such Mortgage Pool for such Distribution Date
exceeds (y) the Overcollateralization Amount for such Mortgage Pool for such
Distribution Date, calculated for this purpose after giving effect to the
reduction on such Distribution Date of the Component Principal Amounts of the
related Components resulting from the distribution of the Principal Remittance
Amount for such Mortgage Pool (but not the Extra Principal Distribution Amount
for such Mortgage Pool) on such Distribution Date, but prior to allocation of
any Applied Loss Amount for such Mortgage Pool on such Distribution Date.
Overcollateralization Release Amount: With respect to each Mortgage Pool
------------------------------------
and any Distribution Date, the lesser of (x) the Principal Remittance Amount
for such Mortgage Pool for such Distribution Date and (y) the amount, if any,
by which (i) the Overcollateralization Amount for such Mortgage Pool for such
date, calculated for this purpose on the basis of the assumption that 100% of
the Principal Remittance Amount for such Mortgage Pool for such date is
applied on such date in reduction of the Component Principal Amounts of the
related Components, exceeds (ii) the Targeted Overcollateralization Amount for
such Mortgage Pool for such date.
Payahead: With respect to any Mortgage Loan and any Due Date therefor,
--------
any Scheduled Payment received by the applicable Servicer during any
Collection Period in addition to the Scheduled Payment due on such Due Date,
intended by the related Mortgagor to be applied on a subsequent Due Date.
Paying Agent: Any paying agent appointed pursuant to Section 3.08.
------------
Percentage Interest: With respect to any Certificate, its percentage
-------------------
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than the Class X and Class R Certificates,
the Percentage Interest evidenced thereby shall equal the initial Certificate
Principal Amount thereof divided by the initial Class Certificate Principal
Amount of all Certificates of the same Class. With respect to the Class X,
Class Y and Class R Certificates, the Percentage Interest evidenced thereby
shall be 100%.
Person: Any individual, corporation, partnership, joint venture,
------
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Placement Agent: Xxxxxx Brothers Inc.
---------------
Plan Asset Regulations: The Department of Labor regulations set forth in
----------------------
29 C.F.R. 2510.3-101.
Pool Balance: With respect to each Mortgage Pool, the aggregate of the
------------
Scheduled Principal Balances of all Mortgage Loans in such Mortgage Pool at
the date of determination.
Pool Delinquency Rate: With respect to each Mortgage Pool and any
---------------------
calendar month, the fraction, expressed as a percentage, the numerator of
which is the aggregate outstanding principal balance of all Mortgage Loans in
such Mortgage Pool 60 or more days delinquent (including all foreclosures and
REO Properties) as of the close of business on the last day of such month, and
the denominator of which is the Pool Balance for such Mortgage Pool as of the
close of business on the last day of such month.
Pool 1: The aggregate of Mortgage Loans identified on the Mortgage Loan
------
Schedule as being included in Pool 1.
Pool 2: The aggregate of Mortgage Loans identified on the Mortgage Loan
------
Schedule as being included in Pool 2.
Pool 3: The aggregate of Mortgage Loans identified on the Mortgage Loan
------
Schedule as being included in Pool 3.
Pool 4: The aggregate of Mortgage Loans identified on the Mortgage Loan
------
Schedule as being included in Pool 4.
Pooling REMIC: A REMIC that will hold as assets Pool 1, Pool 2, Pool 3,
-------------
and Pool 4, and that will issue the Pooling REMIC Regular Interests and the
Class PR Interest.
Pooling REMIC Regular Interest: Any of the Class X-0, Xxxxx X-0XX, Class
------------------------------
X-0, Xxxxx X-0XX, Class X-0, Xxxxx X-0XX, Class P-4 and Class P-4PO Interest.
Premium Mortgage Loan: None.
---------------------
Prepayment Interest Shortfall: With respect to any full or partial
-----------------------------
Principal Prepayment of a Mortgage Loan, the difference between (i) one full
month's interest at the applicable Mortgage Rate (giving effect to any
applicable Relief Act Reduction), as reduced by the Master Servicing Fee Rate
and the applicable Servicing Fee Rate, on the outstanding principal balance of
such Mortgage Loan immediately prior to such prepayment and (ii) the amount of
interest actually received with respect to such Mortgage Loan in connection
with such Principal Prepayment.
Prepayment Period: The applicable period specified in the applicable
-----------------
Servicing Agreement (whether or not specifically defined as a "Prepayment
Period") during which amounts required to be remitted by the related Servicer
in respect of Mortgage Loan prepayments on the applicable Servicer Remittance
Date are received by such Servicer.
Primary Mortgage Insurance Policy: Mortgage guaranty insurance, if any,
---------------------------------
on an individual Mortgage Loan, as evidenced by a policy or certificate.
Principal Distribution Amount: With respect to each Mortgage Pool and any
-----------------------------
Distribution Date, the sum of (i) the Principal Remittance Amount for such
Mortgage Pool for such date MINUS, with respect to each Distribution Date, the
Overcollateralization Release Amount, if any, for such Mortgage Pool for such
date, (ii) the Extra Principal Distribution Amount, if any, for such Mortgage
Pool for such date and (iii) any amounts withdrawn from the Collateralization
Account for such Mortgage Pool pursuant to Section 4.07(b)(i) for distribution
pursuant to Section 5.02(c) in respect of the Components of the related
Component Group.
Principal Only Certificate: None.
--------------------------
Principal Prepayment: Any Mortgagor payment of principal (other than a
--------------------
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled
Due Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note or the applicable Servicing
Agreement.
Principal Remittance Amount: With respect to each Mortgage Pool and any
---------------------------
Distribution Date, the sum of (i) all principal collected (other than
Payaheads) or advanced in respect of Scheduled Payments on the Mortgage Loans
in such Mortgage Pool during the related Collection Period (less unreimbursed
Advances and other amounts due to the Master Servicer, the Servicers or the
Trustee with respect to such Mortgage Loans, to the extent allocable to
principal), (ii) the outstanding principal balance of each Mortgage Loan that
was purchased from the Trust Fund during the related Prepayment Period, (iii)
the portion of any Substitution Amount paid during the related Prepayment
Period allocable to principal, and (iv) all Net Liquidation Proceeds,
Insurance Proceeds and other recoveries collected with respect to such
Mortgage Loans during the related Prepayment Period, to the extent allocable
to principal, as reduced in each case by unreimbursed Advances and other
amounts due to the Master Servicer, the Servicers or the Trustee, to the
extent allocable to principal.
Proceeding: Any suit in equity, action at law or other judicial or
----------
administrative proceeding.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
-----------------
occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares.
Prospectus: The prospectus supplement dated July 27, 1998, together with
----------
the accompanying prospectus dated March 18, 1998, relating to the Class X-0,
Xxxxx X-0, Class A-3, Class M-1, Class M-2 and Class B Certificates.
Purchase Price: With respect to the purchase of a Mortgage Loan or
--------------
related REO Property pursuant to this Agreement or the Special Servicing
Agreement, an amount equal to the sum of (a) 100% of the unpaid principal
balance of such Mortgage Loan, (b) accrued interest thereon at the applicable
Mortgage Rate, from the date as to which interest was last paid to (but not
including) the Due Date in the Collection Period immediately preceding the
related Distribution Date and (c) any amounts advanced by the Master Servicer
or any Servicer (or the Trustee) and not previously reimbursed, together with
any unpaid Master Servicing Fees and Servicing Fees and any unpaid Initial
Loss Mitigation Fees, Loss Mitigation Fees and Incentive Fees, in each case
with respect to such Mortgage Loan. The Master Servicer or the applicable
Servicer (or the Trustee, if applicable) shall be reimbursed from the Purchase
Price for any Mortgage Loan or related REO Property for any Advances made or
other amounts advanced with respect to such Mortgage Loan that are
reimbursable to the Master Servicer or the applicable Servicer under this
Agreement or the applicable Servicing Agreement (or to the Trustee hereunder).
Qualified GIC: A guaranteed investment contract or surety bond providing
-------------
for the investment of funds in the Collection Account or the Certificate
Account and insuring a minimum, fixed or floating rate of return on
investments of such funds, which contract or surety bond shall:
(a) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two
highest rating categories or, if such insurance company has no long-term
debt, whose claims paying ability is rated by each Rating Agency in one
of its two highest rating categories, and whose short-term debt is rated
by each Rating Agency in its highest rating category;
(b) provide that the Trustee may exercise all of the rights under
such contract or surety bond without the necessity of taking any action
by any other Person;
(c) provide that if at any time the then current credit standing of
the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in a
downgrading of any rating of the Certificates, the Trustee shall
terminate such contract without penalty and be entitled to the return of
all funds previously invested thereunder, together with accrued interest
thereon at the interest rate provided under such contract to the date of
delivery of such funds to the Trustee;
(d) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder: and
(e) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the Collection Account or the
Certificate Account, as the case may be, not later than the Business Day
prior to any Distribution Date.
Qualified Insurer: An insurance company duly qualified as such under the
-----------------
laws of the states in which the related Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability
is rated by each Rating Agency in its highest rating category or whose
selection as an insurer will not adversely affect the rating of the
Certificates.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
-----------------------------------
substituted for a Deleted Mortgage Loan, a Mortgage Loan that, on the date of
substitution, (i) has a Scheduled Principal Balance (together with that of any
other mortgage loan substituted for the same Deleted Mortgage Loan) as of the
Due Date in the month in which such substitution occurs not in excess of the
Scheduled Principal Balance of the related Deleted Mortgage Loan, PROVIDED,
HOWEVER, that, to the extent that the Scheduled Principal Balance of such
Mortgage Loan is less than the Scheduled Principal Balance of the related
Deleted Mortgage Loan, then such differential in principal amount, together
with interest thereon at the applicable Mortgage Rate net of the Master
Servicing Fee and the applicable Servicing Fee from the date as to which
interest was last paid through the end of the Collection Period in which such
substitution occurs (such amount, a "Substitution Amount"), shall be paid by
the party effecting such substitution to the Trustee for deposit into the
Certificate Account, and shall be treated as a Principal Prepayment hereunder;
(ii) has a Net Mortgage Rate not lower than the Net Mortgage Rate of the
related Deleted Mortgage Loan; (iii) if the total principal balance of
Qualifying Substitute Mortgage Loans in the Trust is less than 5% of the
initial principal balance of the Mortgage Loans, has a remaining stated term
to maturity not longer than, and not more than one year shorter than, the
remaining term to stated maturity of the related Deleted Mortgage Loan; (iv)
has a Loan-to-Value Ratio as of the date of such substitution not greater than
that of the related Deleted Mortgage Loan; (v) will comply with all of the
representations and warranties relating to Mortgage Loans set forth herein, as
of the date as of which such substitution occurs; (vi) is not a Cooperative
Loan unless the related Deleted Mortgage Loan was a Cooperative Loan; (vii) if
applicable, has the same index as and a margin not less than that of the
related Deleted Mortgage Loan and (viii) has not been delinquent for a period
of more than 30 days more than twice in the twelve months immediately
preceding such date of substitution. In the event that either one mortgage
loan is substituted for more than one Deleted Mortgage Loan or more than one
mortgage loan is substituted for one or more Deleted Mortgage Loans, then (a)
the Scheduled Principal Balance referred to in clause (i) above shall be
determined on a loan-by-loan basis, (b) the rate referred to in clause (ii)
above shall be determined on a loan-by-loan basis and (c) the remaining term
to stated maturity referred to in clause (iii) above shall be determined on a
weighted average basis, provided that the final scheduled maturity date of any
Qualifying Substitute Mortgage Loan shall not exceed the latest Final
Scheduled Distribution Date of any Class of Certificates. Whenever a
Qualifying Substitute Mortgage Loan is substituted for a Deleted Mortgage Loan
pursuant to this Agreement, the party effecting such substitution shall
certify such qualification in writing to the Trustee.
Rating Agency: Each of DCR, Fitch and S&P.
-------------
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
-------------
equal to (i) the unpaid principal balance of such Mortgage Loan as of the date
of liquidation, minus (ii) Liquidation Proceeds received, to the extent
allocable to principal, net of amounts that are reimbursable therefrom to the
Master Servicer or any Servicer with respect to such Mortgage Loan (other than
Advances of principal) including expenses of liquidation. In determining
whether a Realized Loss is a Realized Loss of principal, Liquidation Proceeds
shall be allocated, first, to payment of expenses related to such Liquidated
Mortgage Loan, then to accrued unpaid interest and finally to reduce the
principal balance of the Mortgage Loan.
Recognition Agreement: With respect to any Cooperative Loan, an agreement
---------------------
between the related Cooperative Corporation and the originator of such
Mortgage Loan to establish the rights of such originator in the related
Cooperative Property.
Record Date: With respect to any Distribution Date, the close of business
-----------
on the Business Day immediately preceding such Distribution Date.
Reference Banks: As defined in Section 4.05.
---------------
Reimbursement Amount: As defined in Section 5.02.
--------------------
REMIC: Each pool of assets in the Trust Fund designated as a REMIC
-----
pursuant to Section 10.01(a) hereof.
REMIC 1 Regular Interest: Any of the Class T1-1, Class T1-2 and T1-3
------------------------
Interests.
REMIC 2 Regular Interest: Any of the Class T2-1, Class T2-2, Class T2-3
------------------------
and Class T2-4 Interests.
REMIC 3 Regular Interest: Any of the Class T3-1, Class T3-2, Class T3-3,
------------------------
Class T3-4, Class T3-5, Class T3-6, Class T3-7, Class T3-8, and Class T3-9
Interests.
REMIC 4 Regular Interest: Any of the Class T4-1, Class T4-2, Class T4-3,
------------------------
Class T4-4, Class T4-5, Class T4-6, Class T4-7, Class T4-8, Class T4-9, Class
T4-10, Class T4-11, and Class T4-12 Interests.
REMIC Provisions: The provisions of the federal income tax law relating
----------------
to real estate mortgage investment conduits, which appear at sections 860A
through 86OG of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations, including proposed regulations and rulings, and
administrative pronouncements promulgated thereunder, as the foregoing may be
in effect from time to time.
Remittance Date: The day in each month on which each Servicer is required
---------------
to remit payments to the account maintained by the Master Servicer, as
specified in the related Servicing Agreement.
REO Property: A Mortgaged Property acquired by the Trust Fund through
------------
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan or otherwise treated as having been acquired pursuant to the
REMIC Provisions.
Required Reserve Fund Deposit: With respect to each Mortgage Pool and any
-----------------------------
Distribution Date on which the Net Excess Spread for such Mortgage Pool is
less than 0.25%, the amount, if any by which (a) the product of 0.50% and the
Pool Balance for such Mortgage Pool for such date exceeds (b) the amount on
deposit in the related Basis Risk Reserve Fund immediately prior to such date.
With respect to any Distribution Date on which the Net Excess Spread for such
Mortgage Pool is equal to or greater than 0.25%, the amount, if any, by which
(i) $1,000 exceeds (ii) the amount on deposit in the related Basis Risk
Reserve Fund immediately prior to such date.
Reserve Interest Rate: As defined in Section 4.05.
---------------------
Residual Certificate: Any Class R Certificate.
--------------------
Responsible Officer: When used with respect to the Trustee, any Vice
-------------------
President, Assistant Vice President, the Secretary, any assistant secretary,
the Treasurer, or any assistant treasurer, working in its corporate trust
department and having responsibility for the administration of this Agreement.
Restricted Certificate: Any Class X, Class Y or Class R Certificate.
----------------------
Reuters Screen NYAA Page: The display designated as page "Reuters Screen
------------------------
NYAA Page" on the Reuters Monitor Money Rates Service (or such other page
selected by the Trustee as may replace the NYAA page on that service for the
purpose of displaying Federal Funds rates).
Rolling Three Month Delinquency Rate: With respect to each Mortgage Pool
------------------------------------
and any Distribution Date, the fraction, expressed as a percentage, equal to
the average of the Pool Delinquency Rates for such Mortgage Pool for each of
the three (or one and two, in the case of the first and second Distribution
Dates) immediately preceding calendar months.
S&P: Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
---
Companies, Inc., or any successor in interest.
Scheduled Payment: Each scheduled payment of principal and interest (or
-----------------
of interest only, if applicable) to be paid by the Mortgagor on a Mortgage
Loan, as reduced (except where otherwise specified herein) by the amount of
any related Debt Service Reduction (excluding all amounts of principal and
interest that were due on or before the Cut-off Date whenever received) and,
in the case of an REO Property, an amount equivalent to the Scheduled Payment
that would have been due on the related Mortgage Loan if such Mortgage Loan
had remained in existence. In the case of any bi-weekly payment Mortgage Loan,
all payments due on such Mortgage Loan during any Collection Period shall be
deemed collectively to constitute the Scheduled Payment due on such Mortgage
Loan in such Collection Period.
Scheduled Principal Balance: With respect to (i) any Mortgage Loan as of
---------------------------
any Distribution Date, the principal balance of such Mortgage Loan at the
close of business on the Cut-off Date, after giving effect to principal
payments due on or before the Cut-off Date, whether or not received, less an
amount equal to principal payments due after the Cut-off Date and on or before
the Due Date in the related Collection Period, whether or not received from
the Mortgagor or advanced by the Master Servicer, and all amounts allocable to
unscheduled principal payments (including Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and condemnation proceeds, in each case to the
extent identified and applied prior to or during the related Prepayment
Period) and (ii) any REO Property as of any Distribution Date, the Scheduled
Principal Balance of the related Mortgage Loan on the Due Date immediately
preceding the date of acquisition of such REO Property by or on behalf of the
Trustee (reduced by any amount applied as a reduction of principal on the
Mortgage Loan). With respect to any Mortgage Loan and the Cut-off Date, as
specified in the Mortgage Loan Schedule.
Security Agreement: With respect to any Cooperative Loan, the agreement
------------------
between the owner of the related Cooperative Shares and the originator of the
related Mortgage Note that defines the terms of the security interest in such
Cooperative Shares and the related Proprietary Lease.
Senior Certificate: Any Class A-1, Class A-2 or Class A-3 Certificate.
------------------
Senior Component: Any Component of a Senior Certificate.
----------------
Senior Enhancement Percentage: With respect to each Mortgage Pool and any
-----------------------------
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is the sum of the aggregate Component Principal Amount of the related
Components of the Class M-1, Class M-2 and Class B Certificates and the
Overcollateralization Amount for such Mortgage Pool, in each case after giving
effect to distributions on such Distribution Date, and the denominator of
which is the Pool Balance for such Mortgage Pool as of the last day of the
related Collection Period.
Senior Principal Distribution Amount: With respect to each Mortgage Pool
------------------------------------
and any Distribution Date (a) prior to the applicable Stepdown Date or with
respect to which a Trigger Event has occurred with respect to such Mortgage
Pool and such Distribution Date, the Principal Distribution Amount for such
Mortgage Pool and (b) on or after the applicable Stepdown Date and as long as
a Trigger Event has not occurred with respect to such Mortgage Pool and such
Distribution Date, the amount, if any, by which (x) the aggregate Component
Principal Amount of the Senior Components in the related Component Group
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 6.58% and (ii) the Pool Balance for such Mortgage Pool as of
the last day of the related Collection Period and (B) the amount, if any, by
which (i) the Pool Balance for such Mortgage Pool as of the last day of the
related Collection Period exceeds (ii) $4,862,928.
Servicer: Any Servicer, including the Special Servicer, that has entered
--------
into any of the Servicing Agreements attached as Exhibit E hereto, or any
successor in interest.
Servicing Agreement: Each Servicing Agreement, including the Special
-------------------
Servicing Agreement, among a Servicer and Xxxxxx Capital attached hereto as
Exhibit E.
Servicing Fee: The Servicing Fee or, in the case of the Special Servicer,
-------------
the Base Servicing Fee, specified in the applicable Servicing Agreement or, in
the case of the Special Servicer, in the Special Servicing Compensation
Agreement.
Servicing Fee Rate: With respect to any Servicer, as specified in the
------------------
applicable Servicing Agreement.
Servicing Officer: Any officer of the Master Servicer involved in or
-----------------
responsible for the administration and servicing or master servicing of the
Mortgage Loans whose name appears on a list of servicing officers furnished by
the Master Servicer to the Trustee, as such list may from time to time be
amended.
Special Servicer: Ocwen Federal Bank FSB, as special servicer under the
----------------
Special Servicing Agreement, or any successor in interest.
Special Servicing Agreement: The Special Servicing Agreement between
---------------------------
Xxxxxx Capital and the Special Servicer dated as of July 1, 1998, attached as
part of Exhibit E hereto.
Special Servicing Compensation Agreement: The agreement attached as
----------------------------------------
Exhibit L hereto specifying the compensation to which the Special Servicer is
entitled for its services under the Special Servicing Agreement.
Standard Rate: With respect to each Mortgage Pool and any Distribution
-------------
Date, the rate at which interest accrues on the related Component of the Class
B Certificates during the related Accrual Period.
Startup Day: The day designated as such pursuant to Section 10.01(b)
-----------
hereof.
Stepdown Date: With respect to each Mortgage Pool, the later to occur of
-------------
(x) the Distribution Date in August 2001 and (y) the first Distribution Date
on which the Senior Enhancement Percentage (calculated for this purpose AFTER
giving effect to payments or other recoveries in respect of the Mortgage Loans
in such Mortgage Pool during the related Collection Period but BEFORE giving
effect to distributions on the related Components on such Distribution Date)
is greater than to equal to 33.42%.
Subordinate Certificate: Any Class M-1, Class M-2, Class B or Class X
-----------------------
Certificate.
Substitution Amount: As defined in the definition of Qualifying
-------------------
Substitute Mortgage Loan.
Targeted Overcollateralization Amount: With respect to each Mortgage Pool
-------------------------------------
and any Distribution Date (x) prior to the applicable Stepdown Date, the
product of 1.54% and the Pool Balance for such Mortgage Pool as of the Cut-off
Date; (y) on and after the applicable Stepdown Date and with respect to which
a Trigger Event has occurred with respect to such Mortgage Pool, the greater
of (i) the lesser of (A) the product of 1.54% and the Pool Balance for such
Mortgage Pool as of the Cut-Off Date and (B) the product of 6.16% and the Pool
Balance for such Mortgage Pool as of the last day of the related Collection
Period and (ii) $4,862,928; and (z) on and after the applicable Stepdown Date
and with respect to which a Trigger Event has not occurred with respect to
such Mortgage Pool, the greater of (i) the product of 3.08% and the Pool
Balance for such Mortgage Pool as of the last day of the related Collection
Period and (ii) $4,862,928.
Tax Matters Person: The "tax matters person" as specified in the REMIC
------------------
Provisions.
Telerate Page 120: The display designated as "Page 120" on the Dow Xxxxx
-----------------
Telerate Service (or such other page selected by the Trustee as may replace
Page 120 on that service for the purpose of displaying daily Federal Funds
rates).
Termination Price: As defined in Section 7.01 hereof.
-----------------
Title Insurance Policy: A title insurance policy maintained with respect
----------------------
to a Mortgage Loan.
Total Distribution Amount: With respect to each Mortgage Pool and any
-------------------------
Distribution Date, the sum of the Interest Remittance Amount for such Mortgage
Pool for such date and the Principal Remittance Amount for such Mortgage Pool
for such date.
Transfer Agreement: As defined in the Mortgage Loan Sale Agreement.
------------------
Transferor: Each seller of Mortgage Loans to Xxxxxx Capital pursuant to a
----------
Transfer Agreement.
Trigger Event: A Trigger Event will have occurred with respect to each
-------------
Mortgage Pool and any Distribution Date if the Rolling Three Month Delinquency
Rate for such Mortgage Pool as of the last day of the immediately preceding
Collection Period equals or exceeds 50% of the Senior Enhancement Percentage
for such Mortgage Pool for such Distribution Date.
Trust Fund: The corpus of the trust created pursuant to this Agreement,
----------
consisting of the Mortgage Loans, the assignment of the Depositor's rights
under the Mortgage Loan Sale Agreement, such amounts as shall from time to
time be held in the Collection Account, the Certificate Account, any Escrow
Account, each Basis Risk Reserve Fund and each Collateralization Account, the
Insurance Policies, any REO Property and the other items referred to in, and
conveyed to the Trustee under, Section 2.01(a).
Trustee: The Chase Manhattan Bank not in its individual capacity but
-------
solely as Trustee, or any successor in interest, or if any successor trustee
or any co-trustee shall be appointed as herein provided, then such successor
trustee and such co-trustee, as the case may be.
Trustee Fee: As to each Mortgage Pool and any Distribution Date, an
-----------
amount equal to the product of the Trustee Fee Rate and the Pool Balance for
such Mortgage Pool as of the first day of the related Collection Period.
Trustee Fee Rate: 0.003% per annum.
----------------
Undercollateralization Amount: As defined in Section 4.07(b).
-----------------------------
Unpaid Basis Risk Shortfall: With respect to any Distribution Date and
---------------------------
any Component, the aggregate of all Basis Risk Shortfalls with respect to such
Component remaining unpaid from previous Distribution Dates, plus interest
accrued thereon at the applicable Component Interest Rate (calculated without
giving effect to the applicable Net Funds Cap).
Upper Tier REMIC: REMIC 4.
----------------
Voting Interests: The portion of the voting rights of all the
----------------
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
92% of all Voting Interests shall be allocated to the Certificates other than
the Class X Certificates, and 2% of all Voting Interests shall be allocated to
each Class X Certificate. Voting Interests shall be allocated among the other
Classes of Certificates (and among the Certificates within each such Class) in
proportion to their Class Certificate Principal Amounts (or Certificate
Principal Amounts).
Section 1.02. Calculations Respecting Mortgage Loans. Calculations
--------------------------------------
required to be made pursuant to this Agreement with respect to any Mortgage
Loan in the Trust Fund shall be made based upon current information as to the
terms of the Mortgage Loans and reports of payments received from the
Mortgagor on such Mortgage Loans and payments to be made to the Trustee as
supplied to the Trustee by the Master Servicer. The Trustee shall not be
required to recompute, verify or recalculate the information supplied to it by
the Master Servicer.
Section 1.03. Calculations Respecting Accrued Interest. Accrued interest,
----------------------------------------
if any, on any Certificate shall be calculated based upon a 360-day year and
the actual number of days in each Accrual Period.
ARTICLE II
DECLARATION OF TRUST;
ISSUANCE OF CERTIFICATES
Section 2.01. Creation and Declaration of Trust Fund; Conveyance of
-----------------------------------------------------
Mortgage Loans. (a) Concurrently with the execution and delivery of this
--------------
Agreement, the Depositor does hereby transfer, assign, set over, deposit with
and otherwise convey to the Trustee, without recourse, in trust, all the
right, title and interest of the Depositor in and to the Mortgage Loans. Such
conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Mortgage Loans on
and after the Cut-off Date (other than payments of principal and interest due
on or before such date), and all such payments due after such date but
received prior to such date and intended by the related Mortgagors to be
applied after such date, together with all of the Depositor's right, title and
interest in and to the Collection Account and all amounts from time to time
credited to and the proceeds of the Collection Account, the Certificate
Account and all amounts from time to time credited to and the proceeds of the
Certificate Account, any Escrow Account established pursuant to Section 9.06
and all amounts from time to time credited to and the proceeds of any such
Escrow Account, any Basis Risk Reserve Fund established pursuant to Section
5.08 and all amounts from time to time credited to and the proceeds of any
such Basis Risk Reserve Fund, any Collateralization Account established
pursuant to Section 4.07 and all amounts from time to time credited to and the
proceeds of any such Collateralization Account, any REO Property and the
proceeds thereof, the Depositor's rights under any Insurance Policies related
to the Mortgage Loans, the Depositor's security interest in any collateral
pledged to secure the Mortgage Loans, including the Mortgaged Properties and
any Additional Collateral, and any proceeds of the foregoing, to have and to
hold, in trust; and the Trustee declares that, subject to the review provided
for in Section 2.02, it has received and shall hold the Trust Fund, as
trustee, in trust, for the benefit and use of the Holders of the Certificates
and for the purposes and subject to the terms and conditions set forth in this
Agreement, and, concurrently with such receipt, has caused to be executed,
authenticated and delivered to or upon the order of the Depositor, in exchange
for the Trust Fund, Certificates in the authorized denominations evidencing
the entire ownership of the Trust Fund.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Trustee all of its rights and interest
under the Mortgage Loan Sale Agreement, including all rights of Xxxxxx Capital
under the Servicing Agreements and the Transfer Agreements to the extent
assigned thereunder, and delegates its obligations thereunder. The Trustee
hereby accepts such assignment and delegation, and shall be entitled to
exercise all rights of the Depositor under the Mortgage Loan Sale Agreement as
if, for such purpose, it were the Depositor.
(b) In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, or cause to be delivered to and deposited
with, the Trustee, and/or any custodian acting on the Trustee's behalf, if
applicable, the following documents or instruments with respect to each
Mortgage Loan (each a "Mortgage File") so transferred and assigned:
(i) with respect to each Mortgage Loan, the original Mortgage Note
endorsed without recourse in proper form to the order of the Trustee, or
in blank (in each case, with all necessary intervening endorsements as
applicable);
(ii) the original of any guarantee executed in connection with the
Mortgage Note, assigned to the Trustee;
(iii) with respect to any Mortgage Loan other than a Cooperative
Loan, the original recorded Mortgage with evidence of recording indicated
thereon. If, in connection with any Mortgage Loan, the Depositor cannot
deliver the Mortgage with evidence of recording thereon on or prior to
the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such
Mortgage has been lost, the Depositor shall deliver or cause to be
delivered to the Trustee (or its custodian), in the case of a delay due
to recording, a true copy of such Mortgage, pending delivery of the
original thereof, together with an Officer's Certificate of the Depositor
certifying that the copy of such Mortgage delivered to the Trustee (or
its custodian) is a true copy and that the original of such Mortgage has
been forwarded to the public recording office, or, in the case of a
Mortgage that has been lost, a copy thereof (certified as provided for
under the laws of the appropriate jurisdiction) and a written Opinion of
Counsel acceptable to the Trustee and the Depositor that an original
recorded Mortgage is not required to enforce the Trustee's interest in
the Mortgage Loan;
(iv) The original of each assumption, modification or substitution
agreement, if any, relating to the Mortgage Loans, or, as to any
assumption, modification or substitution agreement which cannot be
delivered on or prior to the Closing Date because of a delay caused by
the public recording office where such assumption, modification or
substitution agreement has been delivered for recordation, a photocopy of
such assumption, modification or substitution agreement, pending delivery
of the original thereof, together with an Officer's Certificate of the
Depositor certifying that the copy of such assumption, modification or
substitution agreement delivered to the Trustee (or its custodian) is a
true copy and that the original of such agreement has been forwarded to
the public recording office;
(v) with respect to any Mortgage Loan other than a Cooperative Loan,
the original Assignment of Mortgage for each Mortgage Loan;
(vi) If applicable, such original intervening assignments of the
Mortgage, notice of transfer or equivalent instrument (each, an
"Intervening Assignment"), as may be necessary to show a complete chain
of assignment from the originator, or, in the case of an Intervening
Assignment that has been lost, a written Opinion of Counsel acceptable to
the Trustee that such original Intervening Assignment is not required to
enforce the Trustee's interest in the Mortgage Loans;
(vii) the original Primary Mortgage Insurance Policy or certificate,
if private mortgage guaranty insurance is required;
(viii) with respect to any Mortgage Loan other than a Cooperative
Loan, the original mortgagee title insurance policy or attorney's opinion
of title and abstract of title;
(ix) the original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage or as to any security
agreement, chattel mortgage or their equivalent that cannot be delivered
on or prior to the Closing Date because of a delay caused by the public
recording office where such document has been delivered for recordation,
a photocopy of such document, pending delivery of the original thereof,
together with an Officer's Certificate of the Depositor certifying that
the copy of such security agreement, chattel mortgage or their equivalent
delivered to the Trustee (or its custodian) is a true copy and that the
original of such document has been forwarded to the public recording
office;
(x) with respect to any Cooperative Loan, the Cooperative Loan
Documents; and
(xi) in connection with any pledge of Additional Collateral, the
original additional collateral pledge and security agreement executed in
connection therewith, assigned to the Trustee.
The parties hereto acknowledge and agree that the form of endorsement
attached hereto as Exhibit B-4 is intended to effect the transfer to the
Trustee, for the benefit of the Certificateholders, of the Mortgage Notes and
the Mortgages.
(c) Assignments of Mortgage shall be recorded; PROVIDED, HOWEVER, that
such Assignments need not be recorded if, in the Opinion of Counsel (which
must be Independent counsel) acceptable to the Trustee and the Rating
Agencies, recording in such states is not required to protect the Trustee's
interest in the related Mortgage Loans. Subject to the preceding sentence, as
soon as practicable after the Closing Date (but in no event more than 3 months
thereafter except to the extent delays are caused by the applicable recording
office), the Trustee, at the expense of the Depositor and with the cooperation
of the Servicer, shall cause to be properly recorded by the Servicer in each
public recording office where the Mortgages are recorded each Assignment of
Mortgage referred to in subsection (b)(v) above.
(d) In instances where a Title Insurance Policy is required to be
delivered to the Trustee under clause (b)(viii) above and is not so delivered,
the Depositor will provide a copy of such Title Insurance Policy to the
Trustee as promptly as practicable after the execution and delivery hereof,
but in any case within 180 days of the Closing Date.
(e) For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Trustee an Officer's
Certificate which shall include a statement to the effect that all amounts
received in connection with such prepayment that are required to be deposited
in the applicable Collection Account pursuant to Section 4.01 have been so
deposited. All original documents that are not delivered to the Trustee shall
be held by the Master Servicer or the applicable Servicer in trust for the
benefit of the Trustee and the Certificateholders.
Section 2.02. Acceptance of Trust Fund by Trustee: Review of
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Documentation for Trust Fund. (a) The Trustee, by execution and delivery
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hereof, acknowledges receipt of the Mortgage Files pertaining to the Mortgage
Loans listed on the Mortgage Loan Schedule, subject to review thereof by the
Trustee, or by the applicable Custodian on behalf of the Trustee, under this
Section 2.02. The Trustee, or the applicable Custodian on behalf of the
Trustee, will execute and deliver on the Closing Date to the Depositor and the
Master Servicer an Initial Certification in the form annexed hereto as Exhibit
B-1.
(b) Within 45 days after the Closing Date, the applicable Custodian will,
on behalf of the Trustee and for the benefit of Holders of the Certificates,
review each Mortgage File to ascertain that all required documents set forth
in Section 2.01 have been received and appear on their face to contain the
requisite signatures by or on behalf of the respective parties thereto, and
shall deliver to the Depositor, the Master Servicer and the Special Servicer
an Interim Certification in the form annexed hereto as Exhibit B-2 to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan prepaid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (i) all of the applicable documents specified in Section
2.01(b) are in its possession and (ii) such documents have been reviewed by it
and appear to relate to such Mortgage Loan. The Trustee, or the applicable
Custodian on behalf of the Trustee, shall make sure that the documents are
executed and endorsed, but shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other
papers to determine that the same are valid, binding, legally effective,
properly endorsed, genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded or are in recordable form or
that they are other than what they purport to be on their face. Neither the
Trustee nor any Custodian shall have any responsibility for verifying the
genuineness or the legal effectiveness of or authority for any signatures of
or on behalf of any party or endorser.
(c) If in the course of the review described in paragraph (b) above the
Trustee or any Custodian discovers any document or documents constituting a
part of a Mortgage File that is missing, does not appear regular on its face
(i.e., is mutilated, damaged, defaced, torn or otherwise physically altered)
or appears to be unrelated to the Mortgage Loans identified in the Mortgage
Loan Schedule (each, a "Material Defect"), the Trustee, or the applicable
Custodian on behalf of the Trustee, shall promptly identify the Mortgage Loan
to which such Material Defect relates in the Interim Certificate delivered to
the Depositor or the Master Servicer (and to the Trustee). Within 90 days of
its receipt of such notice, the applicable Transferor, or, if such Transferor
does not do so, the Depositor shall be required to cure such Material Defect
(and, in such event, the Depositor shall provide the Trustee with an Officer's
Certificate confirming that such cure has been effected). If the applicable
Transferor or the Depositor, as applicable, does not so cure such Material
Defect, the applicable Transferor, or, if such Transferor does not do so, the
Depositor, shall repurchase the related Mortgage Loan from the Trust Fund at
the Purchase Price. Within the two year period following the Closing Date, the
Depositor may, in lieu of repurchasing a Mortgage Loan pursuant to this
Section 2.02, substitute for such Mortgage Loan a Qualifying Substitute
Mortgage Loan subject to the provisions of Section 2.05. The failure of the
Trustee or the applicable Custodian to give the notice contemplated herein
within 45 days after the Closing Date shall not affect or relieve the
Depositor of its obligation to repurchase any Mortgage Loan pursuant to this
Section 2.02 or any other Section of this Agreement requiring the repurchase
of Mortgage Loans from the Trust Fund.
(d) Within 180 days following the Closing Date, the Trustee, or the
applicable Custodian, shall deliver to the Depositor, the Master Servicer and
the Special Servicer a Final Certification substantially in the form annexed
hereto as Exhibit B-3 evidencing the completeness of the Mortgage Files in its
possession or control.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Fund, the Trustee or the Certificateholders of any
unsatisfied duty, claim or other liability on any Mortgage Loan or to any
Mortgagor.
Section 2.03. Representations and Warranties of the Depositor. (a) The
-----------------------------------------------
Depositor hereby represents and warrants to the Trustee, for the benefit of
Certificateholders, and to the Master Servicer, as of the Closing Date or such
other date as is specified, that:
(i) the Depositor is a corporation duly organized, validly existing
and in good standing under the laws governing its creation and existence
and has full corporate power and authority to own its property, to carry
on its business as presently conducted, to enter into and perform its
obligations under this Agreement, and to create the trust pursuant
hereto;
(ii) the execution and delivery by the Depositor of this Agreement
have been duly authorized by all necessary corporate action on the part
of the Depositor; neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any
law, governmental rule, regulation, judgment, decree or order binding on
the Depositor or its properties or the certificate of incorporation or
bylaws of the Depositor;
(iii) the execution, delivery and performance by the Depositor of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except
such as has been obtained, given, effected or taken prior to the date
hereof;
(iv) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
Trustee and the Master Servicer, constitutes a valid and binding
obligation of the Depositor enforceable against it in accordance with its
terms except as such enforceability may be subject to (A) applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally and (B) general
principles of equity regardless of whether such enforcement is considered
in a proceeding in equity or at law;
(v) there are no actions, suits or proceedings pending or, to the
knowledge of the Depositor, threatened or likely to be asserted against
or affecting the Depositor, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Depositor will be determined
adversely to the Depositor and will if determined adversely to the
Depositor materially and adversely affect it or its business, assets,
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement; and
(vi) immediately prior to the transfer and assignment of the
Mortgage Loans to the Trustee, the Depositor was the sole owner of record
and holder of each Mortgage Loan, and the Depositor had good and
marketable title thereto, and had full right to transfer and sell each
Mortgage Loan to the Trustee free and clear, subject only to (1) liens of
current real property taxes and assessments not yet due and payable and,
if the related Mortgaged Property is a condominium unit, any lien for
common charges permitted by statute, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of the date of recording of such Mortgage acceptable to mortgage
lending institutions in the area in which the related Mortgaged Property
is located and specifically referred to in the lender's Title Insurance
Policy or attorney's opinion of title and abstract of title delivered to
the originator of such Mortgage Loan, and (3) such other matters to which
like properties are commonly subject which do not, individually or in the
aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage, of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest,
and had full right and authority, subject to no interest or participation
of, or agreement with, any other party, to sell and assign each Mortgage
Loan pursuant to this Agreement.
(b) The representations and warranties of each Transferor with respect to
the related Mortgage Loans in the applicable Transfer Agreement, which have
been assigned to the Trustee hereunder, were made as of the date specified in
the applicable Transfer Agreement (or underlying agreement, if such Transfer
Agreement is in the form of an assignment of a prior agreement). To the extent
that any fact, condition or event with respect to a Mortgage Loan constitutes
a breach of both (i) a representation or warranty of the applicable Transferor
under the applicable Transfer Agreement and (ii) a representation or warranty
of Xxxxxx Capital under the Mortgage Loan Sale Agreement, the only right or
remedy of the Trustee or of any Certificateholder shall be the Trustee's right
to enforce the obligations of the applicable Transferor under any applicable
representation or warranty made by it. The Trustee acknowledges that the
representations and warranties of Xxxxxx Capital in Section 1.04(b) of the
Mortgage Loan Sale Agreement are applicable only to facts or conditions that
arise or events that occur subsequent to the date as of which the
representations and warranties with respect to the related Mortgage Loans in
the Transfer Agreements were made, and which do not constitute a breach of any
representation or warranty made by the applicable Transferor in the applicable
Transfer Agreement. The Trustee acknowledges that Xxxxxx Capital shall have no
obligation or liability with respect to any breach of a representation or
warranty made by it with respect to the Mortgage Loans if the fact, condition
or event constituting such breach also constitutes a breach of a
representation or warranty made by the applicable Transferor in the applicable
Transfer Agreement, without regard to whether such Transferor fulfills its
contractual obligations in respect of such representation or warranty. The
Trustee further acknowledges that the Depositor shall have no obligation or
liability with respect to any breach of any representation or warranty with
respect to the Mortgage Loans (except as set forth in Section 2.03(a)(vi))
under any circumstances.
Section 2.04. Discovery of Breach. It is understood and agreed that the
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representations and warranties (i) set forth in Section 2.03, (ii) of Xxxxxx
Capital set forth in the Mortgage Loan Sale Agreement and assigned to the
Trustee by the Depositor hereunder and (iii) of each Transferor and each
Servicer, assigned by Xxxxxx Capital to the Depositor pursuant to the Mortgage
Loan Sale Agreement and assigned to the Trustee by the Depositor hereunder
shall each survive delivery of the Mortgage Files and the Assignment of
Mortgage of each Mortgage Loan to the Trustee and shall continue throughout
the term of this Agreement. Upon discovery by either the Depositor, the Master
Servicer or the Trustee of a breach of any of such representations and
warranties that adversely and materially affects the value of the related
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties. Within 90 days of the discovery of a breach of
any representation or warranty given to the Trustee by the Depositor or given
by Xxxxxx Capital and assigned to the Trustee, the Depositor or Xxxxxx
Capital, as applicable, shall either (a) cure such breach in all material
respects, (b) repurchase such Mortgage Loan or any property acquired in
respect thereof from the Trustee at the Purchase Price or (c) within the two
year period following the Closing Date, substitute a Qualifying Substitute
Mortgage Loan for the affected Mortgage Loan. In the event of discovery of a
breach of any representation and warranty of any Transferor assigned to the
Trustee, the Trustee shall enforce its rights under the applicable Transfer
Agreement for the benefit of Certificateholders.
Section 2.05. Repurchase, Purchase or Substitution of Mortgage Loans. (a)
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With respect to any Mortgage Loan repurchased by the Depositor pursuant to
this Article II, by Xxxxxx Capital pursuant to the Mortgage Loan Sale
Agreement or by any Transferor pursuant to the applicable Transfer Agreement,
the principal portion of the funds received by the Trustee in respect of such
repurchase of a Mortgage Loan will be considered a Principal Prepayment and
shall be deposited in the Collection Account. The Trustee, upon receipt of the
full amount of the Purchase Price for a Deleted Mortgage Loan, or upon receipt
of the Mortgage File for a Qualifying Substitute Mortgage Loan substituted for
a Deleted Mortgage Loan (and any applicable Substitution Amount), shall
release or cause to be released and reassign to the Depositor, Xxxxxx Capital
or the applicable Transferor, as applicable, the related Mortgage File for the
Deleted Mortgage Loan and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, representation or
warranty, as shall be necessary to vest in such party or its designee or
assignee title to any Deleted Mortgage Loan released pursuant hereto, free and
clear of all security interests, liens and other encumbrances created by this
Agreement, which instruments shall be prepared by the Trustee (or its
custodian), and the Trustee shall have no further responsibility with respect
to the Mortgage File relating to such Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Trustee (or its custodian) pursuant to the terms of this
Article II in exchange for a Deleted Mortgage Loan: (i) the Depositor, the
applicable Transferor or Xxxxxx Capital, as applicable, must deliver to the
Trustee (or its custodian) the Mortgage File for the Qualifying Substitute
Mortgage Loan containing the documents set forth in Section 2.01(b) along with a
written certification certifying as to the delivery of such Mortgage File and
containing the granting language set forth in Section 2.01(a); and (ii) the
Depositor will be deemed to have made, with respect to such Qualified Substitute
Mortgage Loan, each of the representations and warranties made by it with
respect to the related Deleted Mortgage Loan. As soon as practicable after the
delivery of any Qualifying Substitute Mortgage Loan hereunder, the Trustee, at
the expense of the Depositor and with the cooperation of the Servicer, shall
cause the Assignment of Mortgage with respect to such Qualifying Substitute
Mortgage Loan to be recorded if required pursuant to the first sentence of
Section 2.01(c).
(c) Notwithstanding any other provision of this Agreement, the right to
substitute Mortgage Loans pursuant to this Article II shall be subject to the
additional limitations that no substitution of a Qualifying Substitute
Mortgage Loan for a Deleted Mortgage Loan shall be made unless the Trustee has
received an Opinion of Counsel (at the expense of the party seeking to make
the substitution) that, under current law, such substitution will not (A)
affect adversely the status of any REMIC established hereunder as a REMIC, or
of the related "regular interests" as "regular interests" in any such REMIC,
or (B) cause any such REMIC to engage in a "prohibited transaction" or
prohibited contribution pursuant to the REMIC Provisions.
Section 2.06. Grant Clause. It is intended that the conveyance of the
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Depositor's right, title and interest in and to property constituting the
Trust Fund pursuant to this Agreement shall constitute, and shall be construed
as, a sale of such property and not a grant of a security interest to secure a
loan. However, if such conveyance is deemed to be in respect of a loan, it is
intended that: (1) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (2) the Depositor hereby
grants to the Trustee for the benefit of the Holders of the Certificates a
first priority security interest in all of the Depositor's right, title and
interest in, to and under, whether now owned or hereafter acquired, the Trust
Fund and all proceeds of any and all property constituting the Trust Fund to
secure payment of the Certificates; and (3) this Agreement shall constitute a
security agreement under applicable law. If such conveyance is deemed to be in
respect of a loan and the Trust created by this Agreement terminates prior to
the satisfaction of the claims of any Person holding any Certificate, the
security interest created hereby shall continue in full force and effect and
the Trustee shall be deemed to be the collateral agent for the benefit of such
Person, and all proceeds shall be distributed as herein provided.
Section 2.07. Purchase of Defaulted Mortgage Loans. (a) The initial
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Holder (other than the Placement Agent or any nominee thereof) of each Class X
Certificate shall have the right to purchase defaulted Mortgage Loans in the
related Mortgage Pool from the Trust Fund as and to the extent provided in the
Special Servicing Agreement. Such right shall be transferable to and
exercisable by subsequent Holders of the Class X Certificates only upon
satisfaction of the conditions set forth in the Special Servicing Agreement.
(b) In addition to the purchase option provided under subsection (a)
above, the Special Servicer and the Directing Holder with respect to each
Mortgage Pool shall have the right to purchase certain defaulted Mortgage
Loans in the related Mortgage Pool from the Trust Fund as and to the extent
provided in the Special Servicing Agreement. Such right of such Directing
Holder shall be transferable to and exercisable by subsequent Holders of the
Class X Certificate only upon satisfaction of the conditions set forth in the
Special Servicing Agreement. The aggregate of any such purchases by the
Special Servicer of Mortgage Loans in any Mortgage Pool pursuant to this
Section 2.07(b) shall not exceed 5% of the Cut-off Date Pool Balance thereof.
ARTICLE III
THE CERTIFICATES
Section 3.01. The Certificates. (a) The Certificates shall be issuable in
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registered form only and shall be securities governed by Article 8 of the New
York Uniform Commercial Code. The Book-Entry Certificates will be evidenced by
one or more certificates, beneficial ownership of which will be held in the
dollar denominations in Certificate Principal Amount or Notional Amount, as
applicable, or in the Percentage Interests, specified herein. Each Class of
Book-Entry Certificates will be issued in the minimum denominations in
Certificate Principal Amount specified in the Preliminary Statement hereto and
in integral multiples of $1 in excess thereof. Each Class X Certificate, each
Class Y Certificate and the Class R Certificate shall each be issued as a
single Certificate and maintained in definitive, fully registered form in a
denomination equal to 100% of the Percentage Interest of such Class. The
Certificates may be issued in the form of typewritten certificates.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Each Certificate shall, on
original issue, be authenticated by the Trustee upon the order of the
Depositor upon receipt by the Trustee of the Mortgage Files described in
Section 2.01. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein, executed by an authorized officer of the Trustee or the
Authenticating Agent, if any, by manual signature, and such certification upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. At any time and
from time to time after the execution and delivery of this Agreement, the
Depositor may deliver Certificates executed by the Depositor to the Trustee or
the Authenticating Agent for authentication and the Trustee or the
Authenticating Agent shall authenticate and deliver such Certificates as in
this Agreement provided and not otherwise.
Section 3.02. Registration. The Trustee is hereby appointed, and hereby
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accepts its appointment as, Certificate Registrar in respect of the
Certificates and shall maintain books for the registration and for the
transfer of Certificates (the "Certificate Register"). The Trustee may appoint
a bank or trust company to act as Certificate Registrar. A registration book
shall be maintained for the Certificates collectively. The Certificate
Registrar may resign or be discharged or removed and a new successor may be
appointed in accordance with the procedures and requirements set forth in
Sections 6.06 and 6.07 hereof with respect to the resignation, discharge or
removal of the Trustee and the appointment of a successor Trustee. The
Certificate Registrar may appoint, by a written instrument delivered to the
Holders and the Master Servicer, any bank or trust company to act as
co-registrar under such conditions as the Certificate Registrar may prescribe;
PROVIDED, HOWEVER, that the Certificate Registrar shall not be relieved of any
of its duties or responsibilities hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates. (a) A Certificate
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(other than Book-Entry Certificates which shall be subject to Section 3.09
hereof) may be transferred by the Holder thereof only upon presentation and
surrender of such Certificate at the office of the Certificate Registrar duly
endorsed or accompanied by an assignment duly executed by such Holder or his
duly authorized attorney in such form as shall be satisfactory to the
Certificate Registrar. Upon the transfer of any Certificate in accordance with
the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class and evidencing, in the aggregate, the
same aggregate Certificate Principal Amount as the Certificate being
transferred. No service charge shall be made to a Certificateholder for any
registration of transfer of Certificates, but the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any registration of transfer of
Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number
of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same Certificate Principal Amount as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the office of the Certificate Registrar duly endorsed or accompanied by a
written instrument of transfer duly executed by such Holder or his duly
authorized attorney in such form as is satisfactory to the Certificate
Registrar. Certificates delivered upon any such exchange will evidence the
same obligations, and will be entitled to the same rights and privileges, as
the Certificates surrendered. No service charge shall be made to a
Certificateholder for any exchange of Certificates, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any exchange of
Certificates. Whenever any Certificates are so surrendered for exchange, the
Trustee shall execute, and the Trustee or the Authenticating Agent shall
authenticate, date and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate
acknowledges the restrictions on the transfer of such Certificate set forth
thereon and agrees that it will transfer such a Certificate only as provided
herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that
takes delivery in the form of a Definitive Certificate:
The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the Depositor
or the Placement Agent, an affiliate (as defined in Rule 144(a)(1) under
the 0000 Xxx) of the Depositor or the Placement Agent or (y) being made
to a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act") by a transferor who has
provided the Trustee with a certificate in the form of Exhibit F hereto.
(d) No transfer of an ERISA-Restricted Certificate in the form of a
Definitive Certificate shall be made to any Person unless the Trustee has
received (A) a certificate substantially in the form of Exhibit H hereto from
such transferee or (B) an Opinion of Counsel satisfactory to the Trustee and
the Depositor to the effect that the purchase and holding of such a
Certificate will not constitute or result in the assets of the Trust Fund
being deemed to be "plan assets" subject to the prohibited transactions
provisions of ERISA or Section 4975 of the Code and will not subject the
Trustee or the Depositor to any obligation in addition to those undertaken in
the Agreement; PROVIDED, HOWEVER, that the Trustee will not require such
certificate or opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Trustee has rendered an opinion to the
effect that the purchase and holding of an ERISA-Restricted Certificate by a
Plan or a Person that is purchasing or holding such a Certificate with the
assets of a Plan will not constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code. The preparation and delivery of the
certificate and opinions referred to above shall not be an expense of the
Trust Fund, the Trustee or the Depositor. Notwithstanding the foregoing, no
opinion or certificate shall be required for the initial issuance of the
ERISA-Restricted Certificates.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; PROVIDED, HOWEVER, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of Certificate.
(f) Notwithstanding anything to the contrary contained herein, no
Residual Certificate may be owned, pledged or transferred, directly or
indirectly, by or to a Disqualified Organization.
Prior to and as a condition of the registration of any transfer, sale or
other disposition of a Residual Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto
as Exhibit D-1 representing and warranting, among other things, that such
transferee is neither a Disqualified Organization nor an agent or nominee
acting on behalf of a Disqualified Organization (any such transferee, a
"Permitted Transferee"), and the proposed transferor shall deliver to the
Trustee an affidavit in substantially the form attached hereto as Exhibit D-2.
In addition, the Trustee may (but shall have no obligation to) require, prior
to and as a condition of any such transfer, the delivery by the proposed
transferee of an Opinion of Counsel, addressed to the Depositor and the
Trustee satisfactory in form and substance to the Depositor, that such
proposed transferee or, if the proposed transferee is an agent or nominee, the
proposed beneficial owner, is not a Disqualified Organization. Notwithstanding
the registration in the Certificate Register of any transfer, sale, or other
disposition of a Residual Certificate to a Disqualified Organization or an
agent or nominee acting on behalf of a Disqualified Organization, such
registration shall be deemed to be of no legal force or effect whatsoever and
such Disqualified Organization (or such agent or nominee) shall not be deemed
to be a Certificateholder for any purpose hereunder, including, but not
limited to, the receipt of distributions on such Residual Certificate. The
Trustee shall not be under any liability to any person for any registration or
transfer of a Residual Certificate to a Disqualified Organization or for the
maturity of any payments due on such Residual Certificate to the Holder
thereof or for taking any other action with respect to such Holder under the
provisions of the Agreement, so long as the transfer was effected in
accordance with this Section 3.03(f), unless the Trustee shall have actual
knowledge at the time of such transfer or the time of such payment or other
action that the transferee is a Disqualified Organization (or an agent or
nominee thereof). The Trustee shall be entitled to recover from any Holder of
a Residual Certificate that was a Disqualified Organization (or an agent or
nominee thereof) at the time it became a Holder or any subsequent time it
became a Disqualified Organization all payments made on such Residual
Certificate at and after either such times (and all costs and expenses,
including but not limited to attorneys' fees, incurred in connection
therewith). Any payment (not including any such costs and expenses) so
recovered by the Trustee shall be paid and delivered to the last preceding
Holder of such Residual Certificate.
If any purported transferee shall become a registered Holder of a
Residual Certificate in violation of the provisions of this Section 3.03(f),
then upon receipt of written notice to the Trustee that the registration of
transfer of such Residual Certificate was not in fact permitted by this
Section 3.03(f), the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of such registration of
transfer of such Residual Certificate. The Trustee shall be under no liability
to any Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section 3.03(f), for making any payment due
on such Certificate to the registered Holder thereof or for taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the transfer was registered upon receipt of the affidavit described in
the preceding paragraph of this Section 3.03(f).
(g) Each Holder of a Residual Certificate, by such Holder's acceptance
thereof, shall be deemed for all purposes to have consented to the provisions
of this section.
Section 3.04. Cancellation of Certificates. Any Certificate surrendered
----------------------------
for registration of transfer or exchange shall be cancelled and retained in
accordance with normal retention policies with respect to cancelled
certificates maintained by the Trustee or the Certificate Registrar.
Section 3.05. Replacement of Certificates. If (i) any Certificate is
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mutilated and is surrendered to the Trustee or any Authenticating Agent or
(ii) the Trustee or any Authenticating Agent receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and there
is delivered to the Trustee or the Authenticating Agent such security or
indemnity as may be required by them to save each of them harmless, then, in
the absence of notice to the Depositor and any Authenticating Agent that such
destroyed, lost or stolen Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute and the Trustee or any Authenticating
Agent shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Certificate Principal Amount. Upon the issuance of any new
Certificate under this Section 3.05, the Trustee and Authenticating Agent may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee or the Authenticating Agent)
connected therewith. Any replacement Certificate issued pursuant to this
Section 3.05 shall constitute complete and indefeasible evidence of ownership
in the applicable Trust Fund, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners. Subject to the provisions of Section
---------------------
3.09 with respect to Book-Entry Certificates, the Depositor, the Master
Servicer, the Trustee, the Certificate Registrar and any agent of any of them
may treat the Person in whose name any Certificate is registered upon the
books of the Certificate Registrar as the owner of such Certificate for the
purpose of receiving distributions pursuant to Sections 5.01 and 5.02 and for
all other purposes whatsoever, and neither the Depositor, the Master Servicer,
the Trustee, the Certificate Registrar nor any agent of any of them shall be
affected by notice to the contrary.
Section 3.07. Temporary Certificates. (a) Pending the preparation of
----------------------
definitive Certificates, upon the order of the Depositor, the Trustee shall
execute and shall authenticate and deliver temporary Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations as the
authorized officers executing such Certificates may determine, as evidenced by
their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and authenticate and deliver in
exchange therefor a like aggregate Certificate Principal Amount of definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as definitive Certificates of the same
Class.
Section 3.08. Appointment of Paying Agent. The Trustee may appoint a
---------------------------
Paying Agent (which may be the Trustee) for the purpose of making
distributions to Certificateholders hereunder. The Trustee shall cause such
Paying Agent to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee that such Paying Agent will hold all
sums held by it for the payment to Certificateholders in an Eligible Account
in trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to the Certificateholders. All funds remitted by the
Trustee to any such Paying Agent for the purpose of making distributions shall
be paid to Certificateholders on each Distribution Date and any amounts not so
paid shall be returned on such Distribution Date to the Trustee. If the Paying
Agent is not the Trustee, the Trustee shall cause to be remitted to the Paying
Agent on or before the Business Day prior to each Distribution Date, by wire
transfer in immediately available funds, the funds to be distributed on such
Distribution Date. Any Paying Agent shall be either a bank or trust company or
otherwise authorized under law to exercise corporate trust powers.
Section 3.09. Book-Entry Certificates. (a) Each Class of Book-Entry
-----------------------
Certificates, upon original issuance, shall be issued in the form of one or
more typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Depositor. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a definitive
certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.09(c). Unless Definitive
Certificates have been issued to Certificate Owners of Book-Entry Certificates
pursuant to Section 3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Depositor, the Master Servicer, the Paying Agent, the
Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Book-Entry
Certificates) as the authorized representatives of the Certificate Owners
and the Clearing Agency shall be responsible for crediting the amount of
such distributions to the accounts of such Persons entitled thereto, in
accordance with the Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09
conflict with any other provisions of this Agreement, the provisions of
this Section 3.09 shall control; and
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and the Clearing Agency Participants and
shall be limited to those established by law and agreements between such
Certificate Owners and the Clearing Agency and/or the Clearing Agency
Participants. Unless and until Definitive Certificates are issued
pursuant to Section 3.09(c), the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive
and transmit distributions of principal of and interest on the Book-Entry
Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders is
required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the
Trustee shall give all such notices and communications specified herein to be
given to Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i) (A) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or the Depositor is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Certificate Principal
Amount of a Class of Book-Entry Certificates identified as such to the Trustee
by an Officer's Certificate from the Clearing Agency advise the Trustee and
the Clearing Agency through the Clearing Agency Participants in writing that
the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Certificate Owners of a Class of
Book-Entry Certificates, the Trustee shall notify or cause the Certificate
Registrar to notify the Clearing Agency to effect notification to all
Certificate Owners, through the Clearing Agency, of the occurrence of any such
event and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall issue the
Definitive Certificates. Neither the Depositor nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or
to be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable, with respect to such
Definitive Certificates and the Trustee shall recognize the holders of the
Definitive Certificates as Certificateholders hereunder.
ARTICLE IV
ADMINISTRATION OF THE TRUST FUND
Section 4.01. Collection Account. (a) On the Closing Date, the Master
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Servicer shall open and shall thereafter maintain a segregated account held in
trust (the "Collection Account"). The Collection Account shall relate solely
to the Certificates issued by the Trust Fund hereunder, and funds in such
Collection Account shall not be commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an existing
Collection Account ceases to be an Eligible Account, the Master Servicer shall
establish a new Collection Account that is an Eligible Account within 30 days
and transfer all funds on deposit in such existing Collection Account into
such new Collection Account.
(c) The Master Servicer will give to the Trustee prior written notice of
the name and address of the depository institution at which the Collection
Account is maintained and the account number of such Collection Account. The
Master Servicer shall take such actions as are necessary to cause the
depository institution holding the Collection Account to hold such account in
the name of the Trustee (subject to such Master Servicer's right to direct
payments and investments and its rights of withdrawal) under this Agreement.
On the Deposit Date, the entire amount on deposit in the Collection Account
(subject to permitted withdrawals set forth in Section 4.02), other than
amounts not included in the Total Distribution Amount for such Distribution
Date, shall be remitted to the Trustee for deposit into the Certificate
Account by wire transfer in immediately available funds. Subject to the
immediately preceding sentence, the Master Servicer, at its option, may choose
to make daily remittances from the Collection Account to the Trustee for
deposit into the Certificate Account.
(d) The Master Servicer shall deposit or cause to be deposited into the
Collection Account, no later than the Business Day following the Closing Date,
any amounts representing Scheduled Payments on the Mortgage Loans due after
the Cut-off Date and received by the Master Servicer on or before the Closing
Date. Thereafter, the Master Servicer shall deposit or cause to be deposited
in the Collection Account on the applicable Remittance Date the following
amounts received or payments made by it (other than in respect of principal of
and interest on the Mortgage Loans due on or before the Cut-Off Date):
(i) all payments on account of principal, including Principal
Prepayments and late collections, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
(other than payments due prior to the Cut-off Date), including prepayment
premiums or penalties, net of the Servicing Fee and Master Servicing Fee
with respect to each such Mortgage Loan, but only to the extent of the
amount permitted to be withdrawn or withheld from the Collection Account
in accordance with Sections 5.04 and 9.21;
(iii) any unscheduled payment or other recovery with respect to a
Mortgage Loan not otherwise specified in this paragraph (d), including
all Liquidation Proceeds with respect to the Mortgage Loans and REO
Property, and all amounts received in connection with the operation of
any REO Property, net of any unpaid Servicing Fees and Master Servicing
Fees with respect to such Mortgage Loans (but only to the extent of the
amount permitted to be withdrawn or withheld from the Collection Account
in accordance with Sections 5.04 and 9.21);
(iv) all Insurance Proceeds;
(v) all Advances made by the Master Servicer or any Servicer
pursuant to Section 5.04; and
(vi) all proceeds of any Mortgage Loan repurchased by the Depositor,
Xxxxxx Capital, the Master Servicer or any other Person.
(e) Funds in the Collection Account may be invested in Eligible Investments
selected by and at the written direction of the Master Servicer, which shall
mature not later than the earlier of (a) the Deposit Date (except that if such
Eligible Investment is an obligation of the Trustee or the Paying Agent, if
other than the Trustee, and such Collection Account is maintained with the
Trustee or the Paying Agent, if other than the Trustee, then such Eligible
Investment shall mature not later than such applicable Distribution Date) or (b)
the day on which the funds in such Collection Account are required to be
remitted to the Trustee for deposit into the Certificate Account, and any such
Eligible Investment shall not be sold or disposed of prior to its maturity. All
such Eligible Investments shall be made in the name of the Trustee (in its
capacity as such) or its nominee. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time, subject to Section 5.05, and shall
not be part of the Trust Fund. The amount of any losses incurred in respect of
any such investments shall be deposited in such Collection Account by the Master
Servicer out of its own funds, without any right of reimbursement therefor,
immediately as realized. The foregoing requirements for deposit in the
Collection Account are exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments of interest on funds in the
Collection Account and payments in the nature of late payment charges,
assumption fees and other incidental fees and charges relating to the Mortgage
Loans (other than prepayment premiums or penalties) need not be deposited by the
Master Servicer in the Collection Account and may be retained by the Master
Servicer or the applicable Servicer as additional servicing compensation. If the
Master Servicer deposits in the Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from such Collection
Account. In the event the Master Servicer does not provide written direction to
the Trustee pursuant to this Section, all funds on deposit in the Collection
Account shall remain uninvested.
Section 4.02. Application of Funds in the Collection Account. The Master
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Servicer may, from time to time, make, or cause to be made, withdrawals from
the Collection Account for the following purposes:
(i) to reimburse itself or any Servicer for Advances made by it or
by such Servicer pursuant to Section 5.04; the Master Servicer's right to
reimburse itself pursuant to this subclause (i) is limited to amounts
received on or in respect of particular Mortgage Loans (including, for
this purpose, Liquidation Proceeds and amounts representing Insurance
Proceeds with respect to the property subject to the related Mortgage)
which represent late recoveries (net of the applicable Servicing Fee and
the Master Servicing Fee) of payments of principal or interest respecting
which any such Advance was made, it being understood, in the case of any
such reimbursement, that the Master Servicer's or Servicer's right
thereto shall be prior to the rights of the Certificateholders;
(ii) to reimburse itself or any Servicer, following a final
liquidation of a Mortgage Loan, for any amounts advanced by it or by such
Servicer that it determines in good faith will not be recoverable from
amounts representing late recoveries of payments of principal or interest
respecting the particular Mortgage Loan as to which such Advance was made
or from Liquidation Proceeds or Insurance Proceeds with respect to such
Mortgage Loan, it being understood, in the case of any such
reimbursement, that such Master Servicer's or Servicer's right thereto
shall be prior to the rights of the Certificateholders;
(iii) to reimburse itself from Liquidation Proceeds for Liquidation
Expenses and for amounts expended by it pursuant to Sections 9.20 and
9.22(a) in good faith in connection with the restoration of damaged
property and, to the extent that Liquidation Proceeds after such
reimbursement exceed the unpaid principal balance of the related Mortgage
Loan, together with accrued and unpaid interest thereon at the applicable
Mortgage Rate less the applicable Servicing Fee and the Master Servicing
Fee for such Mortgage Loan to the Due Date next succeeding the date of
its receipt of such Liquidation Proceeds, to pay to itself out of such
excess the amount of any unpaid assumption fees, late payment charges or
other Mortgagor charges on the related Mortgage Loan and to retain any
excess remaining thereafter as additional servicing compensation, it
being understood, in the case of any such reimbursement or payment, that
such Master Servicer's right thereto shall be prior to the rights of the
Certificateholders;
(iv) in the event it has elected not to pay itself the Master
Servicing Fee out of any Mortgagor payment on account of interest or
other recovery with respect to a particular Mortgage Loan prior to the
deposit of such Mortgagor payment or recovery in the Collection Account,
to pay to itself the Master Servicing Fee for each Distribution Date and
any unpaid Master Servicing Fees for prior Distribution Dates, as reduced
pursuant to Section 5.05, from any Mortgagor payment as to interest or
such other recovery with respect to that Mortgage Loan, as is permitted
by this Agreement;
(v) to reimburse itself for expenses incurred by and recoverable by
or reimbursable to it or such Servicer pursuant to Section 9.04, 9.06,
9.16 or 9.22(a), and to reimburse itself for any expenses reimbursable to
it pursuant to Section 10.01(c);
(vi) to pay to the Depositor, Xxxxxx Capital, the applicable
Transferor, the Special Servicer or the Directing Holder, as applicable,
with respect to each Mortgage Loan or REO Property acquired in respect
thereof that has been purchased pursuant to this Agreement, all amounts
received thereon and not distributed on the date on which the related
repurchase was effected, and to pay to the applicable Person any Advances
to the extent specified in the definition of Purchase Price;
(vii) subject to Section 5.04, to pay to itself income earned on the
investment of funds deposited in the Collection Account;
(viii) to make payments to the Trustee for deposit into the
Certificate Account in the amounts and in the manner provided for in
Section 4.04;
(ix) to make payment to itself and others pursuant to any provision
of this Agreement;
(x) to withdraw funds deposited in error in the Collection Account;
(xi) to clear and terminate any Collection Account pursuant to
Section 7.02;
(xii) to reimburse a successor Master Servicer (solely in its
capacity as successor Master Servicer), for any fee or advance occasioned
by a termination of the Master Servicer, and the assumption of such
duties by the Trustee or a successor Master Servicer appointed by the
Trustee pursuant to Section 6.14, in each case to the extent not
reimbursed by the terminated Master Servicer, it being understood, in the
case of any such reimbursement or payment, that the right of the Master
Servicer or the Trustee thereto shall be prior to the rights of the
Certificateholders; and
(xiii) to reimburse any Servicer for such amounts as are due thereto
under the applicable Servicing Agreement and have not been retained by or
paid to such Servicer, to the extent provided in such Servicing
Agreement.
In connection with withdrawals pursuant to subclauses (i), (ii), (iii),
(iv) and (vi) above, the Master Servicer's or Servicer's entitlement thereto
is limited to collections or other recoveries on the related Mortgage Loan.
The Master Servicer shall therefore keep and maintain a separate accounting
for each Mortgage Loan it master services for the purpose of justifying any
withdrawal from the Collection Account it maintains pursuant to such subclause
(i), (ii), (iii), (iv) and (vi).
Section 4.03. Reports to Certificateholders. (a) On each Distribution
-----------------------------
Date, the Trustee shall deliver or cause to be delivered by first class mail
to each Certificateholder a written report setting forth the following
information, which information the Master Servicer will determine (on the
basis of information obtained from the Servicers) and deliver to the Trustee
no later than one Business Day prior to such Distribution Date:
(i) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates and in
respect of any Component, to the extent applicable, allocable to
principal on the Mortgage Loans, including Liquidation Proceeds and
Insurance Proceeds, stating separately the amount attributable to
scheduled principal payments and unscheduled payments in the nature of
principal (with respect to each Mortgage Pool);
(ii) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates (other
than any Class of Principal Only Certificates) and in respect of each
Component allocable to interest;
(iii) the amount, if any, of any distribution to the Holders of each
Class X Certificate and the Residual Certificate;
(iv) (A) the aggregate amount of any Advances required to be made by
or on behalf of the Master Servicer or any Servicer (or the Trustee) with
respect to the Mortgage Loans in each Mortgage Pool with respect to such
Distribution Date, (B) the aggregate amount of such Advances actually
made, and (C) the amount, if any, by which (A) above exceeds (B) above;
(v) the Aggregate Loan Balance and the Pool Balance of each Mortgage
Pool as of the close of business on the last day of the related
Collection Period, after giving effect to payments allocated to principal
reported under clause (i) above;
(vi) the Class Certificate Principal Amount (or Aggregate Notional
Amount) of each Class of Certificates, to the extent applicable, and the
Component Principal Amount of each Component, as of such Distribution
Date after giving effect to payments allocated to principal reported
under clause (i) above, separately identifying any reduction of any of
the foregoing Certificate Principal Amounts and Component Principal
Amounts due to Applied Loss Amounts:
(vii) any Realized Losses realized with respect to the Mortgage
Loans in each Mortgage Pool (x) in the applicable Prepayment Period and
(y) in the aggregate since the Cut-off Date;
(viii) the amount of the Master Servicing Fees, Servicing Fees and
Trustee Fee paid during the Collection Period to which such distribution
relates;
(ix) the number and aggregate Scheduled Principal Balance of
Mortgage Loans in each Mortgage Pool, as reported to the Trustee by the
Master Servicer, (a) remaining outstanding (b) delinquent 30 to 59 days
on a contractual basis, (c) delinquent 60 to 89 days on a contractual
basis, (d) delinquent 90 or more days on a contractual basis, and (e) as
to which foreclosure proceedings have been commenced as of the close of
business on the last Business Day of the calendar month immediately
preceding the month in which such Distribution Date occurs;
(x) the deemed principal balance of each REO Property in each
Mortgage Pool as of the close of business on the last Business Day of the
calendar month immediately preceding the month in which such Distribution
Date occurs;
(xi) with respect to any Mortgage Loan in any Mortgage Pool that
became an REO Property during the preceding calendar month, the principal
balance of such Mortgage Loan and the number of such Mortgage Loans as of
the close of business on the Distribution Date in such preceding month;
(xii) with respect to substitution of Mortgage Loans in the
preceding calendar month, and as to each Mortgage Pool, the Scheduled
Principal Balance of each Deleted Mortgage Loan, and of each Qualifying
Substitute Mortgage Loan;
(xiii) the aggregate outstanding Carryforward Interest, Net
Prepayment Interest Shortfalls, Basis Risk Shortfalls and Unpaid Basis
Risk Shortfalls, if any, if any, for each Class of Certificates and each
Component, after giving effect to the distribution made on such
Distribution Date;
(xiv) the Certificate Interest Rate and Component Interest Rate
applicable to such Distribution Date with respect to each Class of
Certificates and each Component;
(xv) if applicable, the amount of any shortfall (i.e., the
difference between the aggregate amounts of principal and interest which
Certificateholders would have received if there were sufficient available
amounts in the Certificate Account and the amounts actually distributed)
(with respect to each Mortgage Pool); and
(xvi) any other "loan-level" information for any Mortgage Loans in
each Mortgage Pool that are delinquent 90 or more days on a contractual
basis and any REO Property held by the Trust that is reported by the
Master Servicer to the Trustee.
In the case of information furnished pursuant to subclauses (i), (ii) and
(viii) above, the amounts shall be expressed as a dollar amount per $1,000 of
original principal amount of Certificates.
In preparing or furnishing the foregoing information to the Trustee, the
Master Servicer shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Master Servicer by each Servicer, and the Master
Servicer shall not be obligated to verify, recompute, reconcile or recalculate
any such information or data.
On each Distribution Date, the Trustee shall also deliver or cause to be
delivered by first class mail to the Depositor a copy of the above-described
written report, to the following address: Mortgage Finance Group, Xxxxxx
Brothers Inc., Three World Financial Center, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attention: Xxxxxxx Xxxxxxxxxx, or to such other address as the
Depositor may designate.
(b) Upon the reasonable advance written request of any Certificateholder
that is a savings and loan, bank or insurance company, which request, if
received by the Trustee, will be promptly forwarded to the Master Servicer,
the Master Servicer shall provide, or cause to be provided, (or, to the extent
that such information or documentation is not required to be provided by a
Servicer under the applicable Servicing Agreement, shall use reasonable
efforts to obtain such information and documentation from such Servicer, and
provide) to such Certificateholder such reports and access to information and
documentation regarding the Mortgage Loans as such Certificateholder may
reasonably deem necessary to comply with applicable regulations of the Office
of Thrift Supervision or its successor or other regulatory authorities with
respect to investment in the Certificates; PROVIDED, HOWEVER, that the Master
Servicer shall be entitled to be reimbursed by such Certificateholder for such
Master Servicer's actual expenses incurred in providing such reports and
access.
(c) Within 90 days, or such shorter period as may be required by statute
or regulation, after the end of each calendar year, the Trustee shall send to
each Person who at any time during the calendar year was a Certificateholder
of record, and make available to Certificate Owners (identified as such by the
Clearing Agency) in accordance with applicable regulations, a report
summarizing the items provided to Certificateholders pursuant to Section
4.03(a) on an annual basis as may be required to enable such Holders to
prepare their federal income tax returns. Such information shall include the
amount of original issue discount accrued on each Class of Certificates and
information regarding the expenses of the Trust Fund. The Master Servicer
shall provide the Trustee with such information as is necessary for the
Trustee to prepare such reports.
Section 4.04. Certificate Account. (a) The Trustee shall establish and
-------------------
maintain in its name, as trustee, a special deposit trust account (the
"Certificate Account"), to be held in trust for the benefit of the
Certificateholders until disbursed pursuant to the terms of this Agreement.
The Certificate Account shall be an Eligible Account. If the existing
Certificate Account ceases to be an Eligible Account, the Trustee shall
establish a new Certificate Account that is an Eligible Account within 20
Business Days and transfer all funds on deposit in such existing Certificate
Account into such new Certificate Account. The Certificate Account shall
relate solely to the Certificates issued hereunder and funds in the
Certificate Account shall be held separate and apart from and shall not be
commingled with any other monies including, without limitation, other monies
of the Trustee held under this Agreement.
(b) The Trustee shall cause to be deposited into the Certificate Account
on the day on which, or, if such day is not a Business Day, the Business Day
immediately following the day on which, any monies are remitted by the Master
Servicer to the Trustee, all such amounts. The Trustee shall make withdrawals
from the Certificate Account only for the following purposes:
(i) to withdraw amounts deposited in the Certificate Account in
error;
(ii) to pay itself any investment income earned with respect to
funds in the Certificate Account invested in Eligible Investments as set
forth in subsection (c) below, and to make payment to itself and others
pursuant to any provision of this Agreement;
(iii) to make payments of the Master Servicing Fee (to the extent
not already withheld or withdrawn from the Collection Account by the
Master Servicer) to the Master Servicer;
(iv) to make distributions to the Certificateholders pursuant to
Article V; and
(v) to clear and terminate the Certificate Account pursuant to
Section 7.02.
(c) The Trustee may invest, or cause to be invested, funds held in the
Certificate Account which funds, if invested, shall be invested in Eligible
Investments (which may be obligations of the Trustee). All such investments
must mature no later than the next Distribution Date, and shall not be sold or
disposed of prior to their maturity. All such Eligible Investments will be
made in the name of the Trustee (in its capacity as such) or its nominee. All
income and gain realized from any such investment shall be compensation for
the Trustee and shall be subject to its withdrawal on order from time to time.
The amount of any losses incurred in respect of any such investments shall be
paid by the Trustee for deposit in the Certificate Account out of its own
funds, without any right of reimbursement therefor, immediately as realized.
Funds held in the Certificate Account that are not invested shall be held in
cash.
Section 4.05. Determination of LIBOR. (a) If the outstanding Certificates
----------------------
include any LIBOR Certificates, then on each LIBOR Determination Date the
Trustee shall determine LIBOR on the basis of the offered LIBOR quotations of
the Reference Banks as of 11:00 a.m. London time on such LIBOR Determination
Date as follows:
(i) If on any LIBOR Determination Date two or more of the Reference
Banks provide such offered quotations, LIBOR for the next Accrual Period
will be the arithmetic mean of such offered quotations (rounding such
arithmetic mean if necessary to the nearest five decimal places;
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Accrual Period will be whichever is the higher of (x) LIBOR as determined
on the previous LIBOR Determination Date or (y) the Reserve Interest
Rate. The "Reserve Interest Rate" will be either (A) the rate per annum
which the Trustee determines to be the arithmetic mean (rounding such
arithmetic mean if necessary to the nearest five decimal places) of the
one-month Eurodollar lending rates that New York City banks selected by
the Trustee are quoting, on the relevant LIBOR Determination Date, to the
principal London offices of at least two leading banks in the London
interbank market or (B) in the event that the Trustee can determine no
such arithmetic mean, the lowest one-month Eurodollar lending rate that
the New York City banks selected by the Trustee are quoting on such LIBOR
Determination Date to leading European banks; and
(iii) If on any LIBOR Determination Date the Trustee is required but
is unable to determine the Reserve Interest Rate in the manner provided
in paragraph (ii) above, LIBOR for the next Accrual Period will be LIBOR
as determined on the previous LIBOR Determination Date or, in the case of
the first LIBOR Determination Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Trustee and the Trustee's
subsequent calculation of the Certificate Interest Rate or Rates applicable to
the LIBOR Certificates for the relevant Accrual Period, in the absence of
manifest error, will be final and binding. In all cases, the Trustee may
conclusively rely on quotations of LIBOR for the Reference Banks as such
quotations appear on the display designated "LIUS01M" on the Bloomberg
Financial Markets Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London,
England, (ii) whose quotations appear on the "Bloomberg Screen LIUS01M Index
Page" (as described in the definition of LIBOR) on the applicable LIBOR
Determination Date and (iii) which have been designated as such by the Trustee
and are able and willing to provide such quotations to the Trustee on each
LIBOR Determination Date. The Reference Banks initially shall be: Barclay's
plc, Bank of Tokyo, National Westminster Bank and Trust Company and Bankers
Trust Company. If any of the initial Reference Banks should be removed from
the Bloomberg Screen LIUS01M Index Page or in any other way fail to meet the
qualifications of a Reference Bank, the Trustee shall use its best efforts to
designate alternate Reference Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date LIBOR would, without giving effect to this
paragraph (d), be determined pursuant to such clause (a)(iii), then the
Trustee shall select an alternative interest rate index over which the Trustee
has no control that is used for determining Eurodollar lending rates and is
calculated and published (or otherwise made available) by an independent third
party, and such alternative interest rate index shall constitute LIBOR for all
purposes hereof.
Section 4.06. Determination of Fed Funds Average Rate. (a) If the
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outstanding Certificates include any Fed Funds Certificates, then with respect
to each Fed Funds Calculation Period the Trustee shall determine the Fed Funds
Average Rate for such Fed Funds Calculation Period by determining the Fed
Funds Rate for each related Fed Funds Business Day as follows:
The Fed Funds Rate will reset on each Fed Funds Business Day (each, a
"Fed Funds Interest Reset Date"). The Fed Funds Rate in effect on each day of
each Fed Funds Calculation Period will be (a) if such day is a Fed Funds
Interest Reset Date, the Fed Funds Rate determined as of such Fed Funds
Business Day (each a "Fed Funds Interest Determination Date"), or (b) if such
day is not a Fed Funds Interest Reset Date, the Fed Funds Rate in effect on
the immediately preceding Fed Funds Interest Reset Date.
(i) the rate with respect to the related Fed Funds Interest
Determination Date (expressed as a percentage per annum) that appears
opposite the caption "Federal Funds Effective" on Telerate Page 120 (as
defined below) as of 11:00 a.m. New York City time on such Fed Funds
Interest Reset Date;
(ii) if such rate does not appear on Telerate Page 120 as of 11:00
a.m. New York City time on such Fed Funds Interest Reset Date, then the
Fed Funds Rate with respect to such Fed Funds Interest Reset Date will be
the rate with respect to the related Fed Funds Interest Determination
Date (expressed as a percentage per annum) that appears on Reuters Screen
NYAA Page (as defined below) as of 11:00 a.m. New York City time on such
Fed Funds Interest Reset Date;
(iii) if such rate does not appear on Reuters Screen NYAA Page as of
11:00 a.m. New York City time on such Fed Funds Interest Reset Date, the
Trustee will request three leading brokers of Federal Funds transactions
in New York City to provide the rate (expressed as a percentage per
annum) for the last transaction in overnight Federal Funds arranged by
such broker on the related Fed Funds Interest Determination Date. If
rates are provided by such three brokers, then the Fed Funds Rate with
respect to such Fed Funds Interest Reset Date will be the arithmetic mean
(rounded to the nearest one hundred-thousandth of one percentage point)
of such rates; and
(iv) if fewer than three such rates are provided, then the Fed Funds
rate with respect to such Fed Funds Interest Reset Date will be the Fed
Funds Rate for the preceding Fed Funds Interest Reset Date (or, in the
case of the first Fed Funds Interest Reset Date, the immediately
preceding Fed Funds Business Day on which a rate appeared on Telerate
Page 120 as described in (a) above).
If a rate that initially appears on Telerate Page 120 or the Reuters
Screen NYAA Page, as the case may be, as of 11:00 a.m. New York City time on
the applicable Fed Funds Interest Reset Date is superseded on Telerate Page
120 or the Reuters Screen NYAA Page, as the case may be, by a corrected rate
before 12:00 noon New York City time on such Fed Funds Interest Reset Date,
such corrected rate as so superseded on the applicable page shall be the
applicable rate for calculating the applicable Fed Funds Rate for such Fed
Funds Interest Determination Date.
(b) The establishment of the Fed Funds Average Rate by the Trustee and
the Trustee's subsequent calculation of the Certificate Interest Rate or Rates
applicable to the Fed Funds Certificates for the relevant Accrual Period, in
the absence of manifest error, will be final and binding. In all cases, the
Trustee may conclusively rely on quotations of the Fed Funds Rate as they
appear on Telerate Page 120 or on the Reuters Screen NYAA Page, as applicable.
The Fed Funds Average Rate for the initial Accrual Period will be the
Initial Fed Funds Average Rate.
Section 4.07. Collateralization Accounts. (a) On the Closing Date the
--------------------------
Trustee shall establish and maintain in its name, as trustee, in trust for the
benefit of Certificateholders, a Collateralization Account with respect to
each Mortgage Pool, into which the Depositor shall deposit or cause to be
deposited $2,465,869.35, in the case of Pool 1, $2,520,563.97, in the case of
Pool 2, $2,512,198.23, in the case of Pool 3, and $2,454,701.01, in the case
of Pool 4. Each Collateralization Account shall be an Eligible Account, and
funds on deposit therein shall be held separate and apart from, and shall not
be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee held pursuant to this Agreement.
(b) (i) Not later than the Business Day immediately preceding each
Distribution Date, the Trustee shall determine the amounts to be
distributed on the Classes of Certificates (to the extent applicable, in
respect of each Component thereof), and shall determine whether, after
giving effect to such distributions, the aggregate Component Principal
Amount of the Components in any Component Group will, as of such
Distribution Date, exceed the Pool Balance for the related Mortgage Pool
as of the close of the related Collection Period (any such excess, an
"Undercollateralization Amount" with respect to such Mortgage Pool). On
each Distribution Date the Trustee shall transfer an amount equal, as to
each Mortgage Pool, to the lesser of (x) the Undercollateralization
Amount immediately prior to such date, and (y) the amount of interest
accrued but unpaid on the Class X Certificate related to such Mortgage
Pool as of such Distribution Date, from the Collateralization Account for
such Mortgage Pool to the Certificate Account for distribution as part of
the applicable Principal Distribution Amount pursuant to Section 5.02(c).
(ii) If after giving effect to distributions pursuant to Section
5.02 on the Distribution Date in October 1998 the Undercollateralization
Amount for any Mortgage Pool has not yet been reduced to (or below) zero,
the related Collateralization Account and all amounts on deposit therein
shall from such date forward be held by the Trustee as an account held as
an asset of the Pooling REMIC. Thereafter, the Trustee shall withdraw
funds from the Collateralization Account for application in the manner
set forth in paragraph (b)(i) above. If amounts remain in any
Collateralization Account after giving effect to Distributions on the
Distribution Date in July 1999, the Trustee shall deposit any such
amounts in the Certificate Account for distribution as part of the
applicable Principal Distribution Amount pursuant to Section 5.02(c) on
such Distribution Date..
(c) Funds in each Collateralization Account shall be invested in
Permitted Investments for so long as such Collateralization Account is not an
asset of any REMIC. Any earnings on such amounts shall be for the account of
Xxxxxx Brothers Inc., which shall be the owner of each Collateralization
Account for federal income tax purposes and shall direct the Trustee, in
writing, as to investment of amounts on deposit therein. Any such earnings
shall be distributed to Xxxxxx Brothers Inc. or its designee on each
Distribution Date in such manner as Xxxxxx Brothers Inc. shall direct. In the
absence of written instructions from Xxxxxx Brothers Inc. as to investment of
funds on deposit in any Collateralization Account, such funds shall be
invested in the VISTA Prime Money Market Fund. If any Collateralization
Account is transferred into any REMIC pursuant to this Agreement, amounts
therein shall not be invested.
ARTICLE V
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally. (a) Subject to Section 7.01
-----------------------
respecting the final distribution on the Certificates, on each Distribution
Date the Trustee or the Paying Agent shall make distributions in accordance
with this Article V. Such distributions shall be made by check mailed to each
Certificateholder's address as it appears on the Certificate Register of the
Certificate Registrar (which shall initially be the Trustee) or, upon written
request made to the Trustee at least five Business Days prior to the related
Record Date by any Certificateholder owning an aggregate initial Certificate
Principal Amount of at least $2,500,000, or, in the case of a Class X
Certificate, a Percentage Interest of 100%, by wire transfer in immediately
available funds to an account specified in the request and at the expense of
such Certificateholder; PROVIDED, HOWEVER, that the final distribution in
respect of any Certificate shall be made only upon presentation and surrender
of such Certificate at the Corporate Trust Office. Wire transfers will be made
at the expense of the Holder requesting such wire transfer by deducting a wire
transfer fee from the related distribution. Notwithstanding such final payment
of principal of any of the Certificates, the Residual Certificates will remain
outstanding until the termination of each REMIC and the payment in full of all
other amounts due with respect to the Residual Certificates and at such time
such final payment in retirement of any Residual Certificates will be made
only upon presentation and surrender of such Certificate at the Corporate
Trust Office of the Trustee or at the office of the New York Presenting Agent.
If any payment required to be made on the Certificates is to be made on a day
that is not a Business Day, then such payment will be made on the next
succeeding Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in
proportion to their respective initial Class Certificate Principal Amounts (or
initial Notional Amounts).
Section 5.02. Distributions from the Certificate Account. (a) On each
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Distribution Date the Trustee (or the Paying Agent on behalf of the Trustee)
shall withdraw from the Certificate Account the Total Distribution Amount with
respect to each Mortgage Pool for such date, shall allocate such amount to the
interests issued in respect of the Pooling REMIC, REMIC 1, REMIC 2, REMIC 3,
and REMIC 4 and shall distribute such amount as specified in this Section.
(b) On each Distribution Date, the Trustee shall distribute the Interest
Remittance Amount with respect to each Mortgage Pool for such date in the
following order of priority:
(i) to the Trustee, the Trustee Fee for such Mortgage Pool for such
Distribution Date;
(ii) to the Class Y Certificate related to such Mortgage Pool, the
amount of interest accrued on the related Class X Certificate with
respect to such Distribution Date, until such Class Y Certificate has
received, in the aggregate, an amount equal to the Initial Class X
Distributable Amount for the related Class X Certificate;
(iii) concurrently, to the Components of the Class A-1, Class A-2
and Class A-3 Certificates, in proportion to the amount of interest
distributable on each such Component, Current Interest for each such
Component and such Distribution Date and any Carryforward Interest for
each such Component and such date;
(iv) to the Component of the Class M-1 Certificates in the related
Component Group, Current Interest for such Component and such
Distribution Date;
(v) to the Component of the Class M-2 Certificates in the related
Component Group, Current Interest for such Component and such
Distribution Date;
(vi) to the Component of the Class B Certificates in the related
Component Group, Current Interest for such Component and such
Distribution Date; and
(vii) for application as part of Monthly Excess Cashflow for such
Mortgage Pool for such Distribution Date, as provided in subsection (d)
of this Section, any Interest Remittance Amount for such Mortgage Pool
remaining after application pursuant to clauses (i) through (v) above.
(c) On each Distribution Date, the Trustee shall distribute the Principal
Distribution Amount with respect to each Mortgage Pool for such date as
follows:
(i) On each Distribution Date (x) prior to the Stepdown Date
applicable to such Mortgage Pool or (y) with respect to which a Trigger
Event has occurred with respect to such Mortgage Pool, the Trustee shall
distribute the Principal Distribution Amount for such Mortgage Pool for
such date in the following order of priority:
(1) to the Component of the Class A-1 Certificates in the
related Component Group, until the Component Principal Amount of
such Component has been reduced to zero;
(2) to the Component of the Class A-2 Certificates in the
related Component Group, until the Component Principal Amount of
such Component has been reduced to zero;
(3) to the Component of the Class A-3 Certificates in the
related Component Group, until the Component Principal Amount of
such Component has been reduced to zero;
(4) to the Component of the Class M-1 Certificates in the
related Component Group, until the Component Principal Amount of
such Component has been reduced to zero;
(5) to the Component of the Class M-2 Certificates in the
related Component Group, until the Component Principal Amount of
such Component has been reduced to zero;
(6) to the Component of the Class B Certificates in the related
Component Group, until the Component Principal Amount of such
Component has been reduced to zero; and
(7) for application as part of Monthly Excess Cashflow for such
Mortgage Pool for such Distribution Date, as provided in subsection
(d) of this Section, any Principal Distribution Amount for such
Mortgage Pool remaining after application pursuant to clauses (1)
through (6) above.
(ii) On each Distribution Date (x) on or after the Stepdown Date
applicable to such Mortgage Pool and (y) with respect to which a Trigger
Event has not occurred with respect to such Mortgage Pool, the Trustee
shall distribute the Principal Distribution Amount for such Mortgage Pool
for such date in the following order of priority:
(1) to the Components of the Class A-1, Class A-2 and Class A-3
Certificates in the related Component Group, an amount equal to the
lesser of (A) the Principal Distribution Amount for such Mortgage
Pool for such Distribution Date and (B) the Senior Principal
Distribution Amount for such Mortgage Pool for such date, in the
following order of priority:
FIRST, to the Component of the Class A-1 Certificates in
the related Component Group, until the Component Principal
Amount of such Component has been reduced to zero;
SECOND, to the Component of the Class A-2 Certificates in
the related Component Group, until the Component Principal
Amount of such Component has been reduced to zero;
THIRD, to the Component of the Class A-3 Certificates in
the related Component Group, until the Component Principal
Amount of such Component has been reduced to zero;
(2) to the Component of the Class M-1 Certificates in the
related Component Group, an amount equal to the lesser of (A) the
excess of (I) the Principal Distribution Amount for such Mortgage
Pool for such Distribution Date over (II) the amount distributed to
the Components of the Senior Certificates in the related Component
Group on such date pursuant to clause (1) above and (B) the M-1
Principal Distribution Amount for such Mortgage Pool for such date,
until the Component Principal Amount of such Component has been
reduced to zero;
(3) to the Component of the Class M-2 Certificates in the
related Component Group, an amount equal to the lesser of (A) the
excess of (I) the Principal Distribution Amount for such Mortgage
Pool for such Distribution Date over (II) the amount distributed to
the Components of the Senior Certificates and the Class M-1
Certificates in the related Component Group on such date pursuant to
clauses (1) and (2) above and (B) the M-2 Principal Distribution
Amount for such Mortgage Pool for such date, until the Component
Principal Amount of such Component has been reduced to zero;
(4) to the Component of the Class B Certificates in the related
Component Group, an amount equal to the lesser of (A) the excess of
(1) the Principal Distribution Amount for such Mortgage Pool for
such Distribution Date over (II) the amount distributed to the
Components of the Senior Certificates and the Class M-1 and Class
M-2 Certificates in the related Component Group on such date
pursuant to clauses (1), (2) and (3) above and (B) the B Principal
Distribution Amount for such Mortgage Pool for such date, until the
Component Principal Amount of such Component has been reduced to
zero; and
(5) for application as part of Monthly Excess Cashflow for such
Mortgage Pool for such Distribution Date, as provided in subsection
(d) of this Section, any Principal Distribution Amount for such
Mortgage Pool remaining after application pursuant to clauses (1)
through (4) above.
Notwithstanding the foregoing, on any Distribution Date on which the
Component Principal Amount of each Component in any Component Group
having a higher priority of distribution has been reduced to zero, any
remaining Principal Distribution Amount for the related Mortgage Pool
will be distributed to the remaining Components of such Component Group,
in the order of priority set forth above, until the Component Principal
Amount of each such Component has been reduced to zero.
(d) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow with respect to each Mortgage Pool for such date in the
following order of priority:
(i) to the Basis Risk Reserve Fund for such Mortgage Pool, and then,
concurrently, to the Components of the Senior Certificates in the related
Component Group, in proportion to any outstanding Basis Risk Shortfall
and Unpaid Basis Risk Shortfall with respect to each such Component, and
then to the Components of the Class M-1, Class M-2 and Class B
Certificates in the related Component Group, in that order, from the
Basis Risk Reserve Fund for such Mortgage Pool, in an amount equal to the
unpaid amount of any Basis Risk Shortfall for such Mortgage Pool for such
date and any Unpaid Basis Risk Shortfall for such Mortgage Pool for such
date, as required by Section 5.08 of this Agreement;
(ii) to the extent of Monthly Excess Interest for such Mortgage Pool
for such Distribution Date, to fund the Extra Principal Distribution
Amount for such Mortgage Pool for such date,
(iii) to the Component of the Class M-1 Certificates in the related
Component Group, any Carryforward Interest for such Component and such
date;
(iv) to the Component of the Class M-1 Certificates in the related
Component Group, any Deferred Amount for such Component and such date;
(v) to the Component of the Class M-2 Certificates in the related
Component Group, any Carryforward Interest for such Component and such
date;
(vi) to the Component of the Class M-2 Certificates in the related
Component Group, any Deferred Amount for such Component and such date;
(vii) to the Component of the Class B Certificates in the related
Component Group, any Carryforward Interest for such Component and such
date;
(viii) to the Component of the Class B Certificates in the related
Component Group, any Deferred Amount for such Component and such date;
(ix) to the Special Servicer, any Initial Loss Mitigation Fees, Loss
Mitigation Servicing Fees and Incentive Fees with respect to the related
Collection Period;
(x) to the Basis Risk Reserve Fund for such Mortgage Pool, an amount
equal to the Required Reserve Fund Deposit for such Mortgage Pool;
(xi) to the Class X Certificate related to such Mortgage Pool, the
Class X Distributable Amount for such Mortgage Pool for such Distribution
Date, together with any amounts withdrawn from the Basis Risk Reserve
Fund for such Mortgage Pool for distribution to such Class X Certificate
pursuant to Section 5.08(c) and (d) on such date;
(xii) to the Servicer, the Extra Servicing Fee for such Distribution
Date to the extent such Extra Servicing Fee is due and payable under
Section 5.07 of this Agreement; and
(xiii) to the Class R Certificate, any amount remaining on such date
after application pursuant to clauses (i) through (xii) above.
Section 5.03. Allocation of Losses. (a) On each Distribution Date, the
--------------------
Component Principal Amount of each Component of the Class M-1, Class M-2 and
Class B Certificates will be reduced by the amount of any Applied Loss Amount
for the related Mortgage Pool for such date, in the following order of
priority:
(i) to the Component of the Class B Certificates in the related
Component Group, until the Component Principal Amount thereof has been
reduced to zero;
(ii) to the Component of the Class M-2 Certificates in the related
Component Group, until the Component Principal Amount thereof has been
reduced to zero; and
(iii) to the Component of the Class M-1 Certificates in the related
Component Group, until the Component Principal Amount thereof has been
reduced to zero.
(b) Any allocation of an Applied Loss Amount to a Component pursuant to
Section 5.03(a) shall effect a corresponding reduction in the Class
Certificate Principal Amount of the related Class of Certificates. Any Applied
Loss Amount so allocated to a Class of Certificates shall be allocated among
the Certificates of such Class in proportion to their respective Certificate
Principal Amounts. Any allocation of an Applied Loss Amount pursuant to this
Section shall be accomplished by reducing the Certificate Principal Amount or,
in the case of any Component, the Component Principal Amount, of each related
Certificate or Component on the applicable Distribution Date.
Section 5.04. Advances by Master Servicer and Trustee. (a) Advances shall
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be made in respect of each Deposit Date as provided herein. If, on any
Determination Date, the Master Servicer determines that any Scheduled Payments
due during the related Collection Period (other than Balloon Payments) have
not been received, the Master Servicer shall, or cause the applicable Servicer
to, advance such amount, less an amount, if any, to be set forth in an
Officer's Certificate to be delivered to the Trustee on such Determination
Date, which if advanced the Master Servicer or the applicable Servicer has
determined would not be recoverable from amounts received with respect to such
Mortgage Loan, including late payments, Liquidation Proceeds, Insurance
Proceeds or otherwise. If the Master Servicer determines that an Advance is
required, it shall on the Deposit Date immediately following such
Determination Date either (i) remit to the Trustee from its own funds (or
funds advanced by the applicable Servicer) for deposit in the Certificate
Account immediately available funds in an amount equal to such Advance, (ii)
cause to be made an appropriate entry in the records of the Collection Account
that funds in such account being held for future distribution or withdrawal
have been, as permitted by this Section 5.04, used by the Master Servicer to
make such Advance, and remit such immediately available funds to the Trustee
for deposit in the Certificate Account or (iii) make Advances in the form of
any combination of clauses (i) and (ii) aggregating the amount of such
Advance. Any funds being held in the Collection Account for future
distribution to Certificateholders and so used shall be replaced by the Master
Servicer from its own funds by remittance to the Trustee for deposit in the
Certificate Account on or before any future Deposit Date to the extent that
funds in the Certificate Account on such Deposit Date shall be less than
payments to Certificateholders required to be made on the related Distribution
Date. The Master Servicer and each Servicer shall be entitled to be reimbursed
from the Collection Account for all Advances made by it as provided in Section
4.02.
(b) In the event that the Master Servicer fails for any reason to make an
Advance required to be made pursuant to Section 5.04 on or before the Deposit
Date, the Trustee, as successor Master Servicer pursuant to Section 6.14,
shall, on or before the related Distribution Date, deposit in the Certificate
Account an amount equal to the excess of (a) Advances required to be made by
the Master Servicer or any Servicer that would have been deposited in such
Certificate Account over (b) the amount of any Advance made by the Master
Servicer or any Servicer with respect to such Distribution Date; PROVIDED,
HOWEVER, that the Trustee shall be required to make such Advance only if it is
not prohibited by law from doing so and it has determined that such Advance
would be recoverable from amounts to be received with respect to such Mortgage
Loan, including late payments, Liquidation Proceeds, Insurance Proceeds, or
otherwise. The Trustee shall be entitled to be reimbursed from the Certificate
Account for Advances made by it pursuant to this Section 5.04 as if it were
the Master Servicer.
Section 5.05. Compensating Interest Payments. The amount of the Aggregate
------------------------------
Master Servicing Compensation payable to the Master Servicer in respect of any
Distribution Date shall be reduced by the amount of any Compensating Interest
Payment for such Distribution Date, but only to the extent such Compensating
Interest Payment is not actually made by a Servicer on the applicable
Remittance Date. Such amount shall not be treated as an Advance and shall not
be reimbursable to the Master Servicer.
Section 5.06. Pooling REMIC, REMIC 1, REMIC 2, REMIC 3, and REMIC 4
-----------------------------------------------------
Allocations.
-----------
(a) With respect to the Pooling REMIC and on each Distribution Date, all
collections and other recoveries allocable to principal of the Mortgage Loans
in the related Mortgage Pool shall be payable on the Class P-1, Class P-2,
Class P-3, or Class P-4 Interest, as the case may be, together with interest
thereon at the weighted average of the Net Mortgage Rates of the Mortgage
Loans in the related Mortgage Pool. With respect to each Mortgage Pool and
each Distribution Date, Realized Losses and Net Prepayment Interest Shortfalls
shall be allocated to the Class P-1, Class P-2, Class P-3, or Class P-4
Interest, as the case may be, to the extent such Realized Losses or Net
Prepayment Interest Shortfalls are experienced by the Mortgage Pool related to
such class of interest. With respect to the Pooling REMIC and on each
Distribution Date, principal shall be payable on the Class P-1PO, Class P-2PO,
Class P-3PO, or Class P-4PO, as the case may be, to the extent of the amount
transferred by the Trustee from the Collateralization Account to the
Certificate Account on such Distribution Date for the related Mortgage Pool as
provided in Section 4.07(b).
(b) With respect to each Mortgage Pool, the initial principal balances of
the Class T1-1, Class T1-2 and Class T1-3 Interests shall equal 98%%, 1% and
1%, respectively, of the Cut-off Date aggregate balance of the Pooling REMIC
Regular Interests related to such Mortgage Pool. With respect to each Mortgage
Pool and on each Distribution Date, 98% of all collections and other
recoveries allocable to principal of the Pooling REMIC Regular Interests will
be allocated to the Class T1-1 Interest. Remaining amounts allocable to
principal of the Mortgage Loans on such Distribution Date will be allocated
first to the Class T1-3 Interest up to an amount equal to 1% of any amount
that represents an Adjusted Overcollateralization Release Amount with respect
to such Distribution Date and then equally to the Class T1-2 and Class T1-3
Interests. Interest accruing on the Class T1-3 Interest in respect of each
Distribution Date in an amount equal to 1% of the increase in the Adjusted
Overcollateralization Amount from the immediately preceding Distribution Date
will be deferred and added to the principal balance of the Class T1-3
Interest. The amount of interest accrued and deferred on the Class T1-3
Interest in accordance with the preceding sentence in respect of each
Distribution Date shall be distributed as principal on such date to the Class
T1-2 Interest.
(c) With respect to each Mortgage Pool and on each Distribution Date, the
Realized Losses for such date shall be allocated 98% to the Class T1-1
Interest. The remaining 2% of such Realized Losses shall be allocated to the
Class T1-3 Interest to the extent that the principal balance of the Class T1-3
Interest exceeds 1% of the aggregate balance of the related Pooling REMIC
regular interests and then equally between the Class T1-2 Interest and the
Class T1-3 Interest.
(d) With respect to each Mortgage Pool and on each Distribution Date, Net
Prepayment Interest Shortfalls shall be allocated ratably among the Class
T1-1, Class T1-2 and Class T1-3 Interests in proportion to their rights to
receive interest on such Distribution Date, and prepayment premiums and
penalties shall be allocated to the Class T1-3 Interest and treated as
additional interest distributable with respect to the Class T1-3 Interest on
such Distribution Date.
(e) With respect to each Mortgage Pool, the initial principal balances of
the Class T2-1 Interest, Class T2-2 Interest and Class T2-3 Interest shall
equal 98%, 1% and 1%, respectively, of the Cut-off Date aggregate balance of
the Pooling REMIC Regular Interests related to such Mortgage Pool. The Class
T2-4 shall not have a principal balance. With respect to each Mortgage Pool
and on each Distribution Date, all collections and other recoveries allocable
to principal of the Mortgage Loans will be allocated 98% to the Class T1-1
Interest. Remaining amounts allocable to principal of the Mortgage Loans on
such Distribution Date will be allocated first to the Class T2-3 Interest up
to an amount equal to 1% of any amount that represents an Adjusted
Overcollateralization Release Amount for such Distribution Date and then
equally to the Class T2-2 and Class T2-3 Interests. Interest accruing on the
Class T2-3 Interest in respect of such Distribution Date in an amount equal to
1% of the increase in the Adjusted Overcollateralization Amount from the
immediately preceding Distribution Date will be deferred and added to the
principal balance of the Class T2-3 Interest. The amount of interest accrued
and deferred on the Class T2-3 Interest in accordance with the preceding
sentence in respect of each Distribution Date shall be distributed as
principal to the Class T2-2 Interest.
(f) With respect to each Mortgage Pool and on each Distribution Date, the
Realized Losses for such date shall be allocated 98% to the Class T2-1
Interest. The remaining 2% of such Realized Losses shall be allocated to the
Class T2-3 Interest to the extent that the principal balance of the Class T2-3
Interest exceeds 1% of the Aggregate Loan Balance and then equally between the
Class T2-2 Interest and the Class T2-3 Interest.
(g) With respect to each Mortgage Pool and on each Distribution Date, Net
Prepayment Interest Shortfalls shall be allocated ratably among the Class
T2-1, Class T2-2 and the Class T2-3 Interests in proportion to their rights to
receive interest on such Distribution Date, and prepayment premiums and
penalties shall be allocated to the Class T2-3 Interest and treated as
additional interest distributable with respect to the Class T2-3 Interest on
such Distribution Date.
(h) With respect to each Mortgage Pool and on each Distribution Date, the
Class T3-4, Class T3-5, Class T3-6, Class T3-7, Class T3-8, and Class T3-9
Interests shall be entitled to receive all collections and other recoveries
allocable to principal of the related Class T2-1, Class T2-2, and Class T2-3
Interests and such principal shall be distributed in a manner that correspond
to the distributions made with respect to the corresponding class of Interests
in REMIC 4 (the Class T4-1, Class T4-2, Class T4-3, Class T4-4, Class T4-5,
and T4-6 Interests, respectively).
(i) With respect to each Mortgage Pool and on each Distribution Date,
interest that accrues with respect to the Class T3-1, Class T3-2 and Class
T3-3 Interests during the related Accrual Period shall first be distributed
with respect to those interests to the extent of any amount transferred by the
Trustee from the Collateralization Account to the Certificate Account pursuant
to Section 4.07(b) on such Distribution Date with respect to such related
Mortgage Pool and then shall be distributed as principal on the Class T3-4.
Class T3-5, Class T3-6, Class T3-7, and Class T3-8 Interests to the extent
needed to achieve the Targeted Overcollateralization Amount for such
Distribution Date, and, to the extent not needed for this purpose, shall be
distributed with respect to the Class T3-1. Class T3-2, and Class T3-3
Interests in proportion to their entitlements to current and accrued
undistributed interest. Interest that accrues on the Class T3-1, Class T3-2,
and Class T3-3 Interests shall not itself bear interest.
(j) With respect to each Mortgage Pool and on each Distribution Date, the
Realized Losses with respect to REMIC 3 shall be allocated as follows:
FIRST, to the Class T3-4 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T4-1 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
SECOND, to the Class T3-5 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T4-2 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
THIRD, to the Class T3-6 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T4-3 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
FOURTH, to the Class T3-7 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T4-4 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
FIFTH, to the Class T3-8 Interest, to the extent that its principal
balance exceeds the principal balance of the Class T4-5 Interest as of
such Distribution Date (after giving effect to any distributions made on
such date);
SIXTH, proportionately, to the accrued interest balances of the
Class T3-1, Class T3-2, and Class T3-3 Interests; and
SEVENTH, in a manner that will cause any amount due on each REMIC 3
Regular Interest to equal the amount due on the corresponding Class of
Regular interests in REMIC 4.
(k) With respect to each Mortgage Pool and on each Distribution Date, Net
Prepayment Interest Shortfalls shall be allocated ratably among the REMIC 3
Regular Interests according to their right to receive interest on such
Distribution Date, and prepayment premiums and penalties shall be allocated
ratably among the Class T3-1, Class T3-2 and Class T3-4 Interests in
proportion to the interest accruing on those Interests and shall be treated as
additional interest distributable with respect to those Interests on such
Distribution Date.
(l) With respect to each Mortgage Pool and on each Distribution Date, the
Class T4-1, Class T4-2, Class T4-3 and Class T4-4, Class T4-5, and Class T4-6
Interests shall be entitled to receive distributions of principal and interest
equal to the interest and principal distributions required to be paid with
respect to the corresponding Class of Components (determined as if the
distributions on the Components were computed without regard to amounts
distributed under Section 5.02(d)(i) hereof from the Basis Risk Reserve Fund).
On each Distribution Date, interest that accrues with respect to the T4-7,
Class T4-8, Class T4-9, Class T4-10, Class T4-11, and Class T4-12 Interests
during the related Accrual Period shall first be distributed with respect to
those interests to the extent of any amount transferred by the Trustee from
the Collateralization Account to the Certificate Account pursuant to Section
4.07(b) on such Distribution Date with respect to such related Mortgage Pool
and then shall be distributed as principal on the Class T4-1, Class T4-2,
Class T4-3, Class T4-4, and Class T4-5 Interests to the extent needed to fund
the Excess Principal Distribution Amount for the corresponding Classes of
Certificates, and, to the extent not needed for this purpose, shall be
distributed with respect to the Class T4-7, Class T4-8, Class T4-9, Class
T4-10, T4-11, and T4-12 Interests in proportion to their entitlement to
current and accrued undistributed interest. Interest that accrues on the Class
T4-7, Class T4-8, Class T4-9, Class T4-10, Class T4-11, and Class T4-12
Interests shall not itself bear interest.
(m) With respect to each Mortgage Pool and on each Distribution Date, the
Applied Loss Amount with respect to REMIC 4 and any Distribution Date shall be
allocated among the REMIC 4 Regular Interests in accordance with the
allocations provided in Section 5.03 hereof for the corresponding Classes of
Components.
(n) With respect to each Mortgage Pool and on each Distribution Date, Net
Prepayment Interest Shortfalls shall be allocated ratably among the Class
T4-7, Class T4-8, Class T4-9, Class T4-10, Class T4-11, and Class T4-12
Interests in proportion to the interest accruing on those Interests with
respect to such Distribution Date, and prepayment premiums and penalties shall
be allocated ratably among the Class T4-7, Class T4-8, Class T4-9, Class
T4-10, Class T4-11, and Class T4-12 Interests in proportion to the interest
accruing on those interests and shall be treated as additional interest
distributable with respect to those Interests on such Distribution Date.
Section 5.07. Extra Servicing Fee. With respect to each Mortgage Pool,
-------------------
REMIC 4 shall pay to the Servicer the Extra Servicing Fee as an additional fee
for services rendered as Servicer. Such fee shall be due and payable on any
Distribution Date only to the extent that there are amounts remaining after
all amounts required to be distributed with respect to the REMIC 4 Regular
Interests have been made for that Distribution Date. With respect to each
Distribution Date, the Extra Servicing Fee shall equal the sum of the
following:
(i) an amount equal to the product of the Class A-1 Component
Interest Rate for such Distribution Date and the excess of the Class T3-4
Interest principal balance over the Class T4-1 Interest principal balance
(before giving effect to any reductions of such balances on such
Distribution Date);
(ii) an amount equal to the product of the Class A-2 Component
Interest Rate for such Distribution Date and the excess of the Class T3-5
Interest principal balance over the Class T4-2 Interest principal balance
(before giving effect to any reductions of such balances on such
Distribution Date);
(iii) an amount equal to the product of the Class A-3 Component
Interest Rate for such Distribution Date and the excess of the Class T3-6
Interest principal balance over the Class T4-3 Interest principal balance
(before giving effect to any reductions of such balances on such
Distribution Date);
(iv) an amount equal to the product of the Class M-1 Component
Interest Rate for such Distribution Date and the excess of the Class T3-7
Interest principal balance over the Class T4-4 Interest principal balance
(before giving effect to any reductions of such balances on such
Distribution Date); and
(v) an amount equal to the product of the Class M-2 Component
Interest Rate for such Distribution Date and the excess of the Class T3-8
Interest principal balance over the Class T4-5 Interest principal balance
(before giving effect to any reductions of such balances on such
Distribution Date).
Section 5.08. Basis Risk Reserve Funds. (a) With respect to each Mortgage
------------------------
Pool, on the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of the holders of the Class A-1, Class X-0,
Xxxxx X-0, Class M-1, Class M-2 and Class B Certificates, a Basis Risk Reserve
Fund with respect to each Mortgage Pool, into each of which the Depositor
shall deposit $1,000. Each Basis Risk Reserve Fund shall be an Eligible
Account, and funds on deposit therein shall be held separate and apart from,
and shall not be commingled with, any other moneys, including, without
limitation, other moneys of the Trustee held pursuant to this Agreement.
(b) On each Distribution Date on which the Net Excess Spread for any
Mortgage Pool is less than 0.25%, the Trustee shall transfer the Required
Reserve Fund Deposit for such Mortgage Pool from the Certificate Account to
the Basis Risk Reserve Fund for such Mortgage Pool pursuant to Section
5.02(d)(x). The Trustee shall make withdrawals from such Basis Risk Reserve
Fund to make distributions pursuant to Section 5.02(d)(i).
(c) Funds in each Basis Risk Reserve Fund shall be invested in Permitted
Investments. Any earnings on such amounts shall be distributed to the related
Class X Certificate pursuant to Section 5.02(d)(xi). Each Class X Certificate
shall evidence ownership of the related Basis Risk Reserve Fund for federal
income tax purposes and the Holder thereof shall direct the Trustee, in
writing, as to investment of amounts on deposit therein. In the absence of
written instructions from any Class X Certificateholder as to investment of
funds on deposit in the related Basis Risk Reserve Fund, such funds shall be
invested in the VISTA Prime Money Market Fund.
(d) Upon termination of the Trust Fund, any amounts remaining in any
Basis Risk Reserve Fund shall be distributed to the related Class X
Certificateholder pursuant to Section 5.02(d)(xi).
ARTICLE VI
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Duties of Trustee. (a) The Trustee, except during the
-----------------
continuance of an Event of Default, undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement. Any permissive
right of the Trustee provided for in this Agreement shall not be construed as
a duty of the Trustee. If an Event of Default has occurred and has not
otherwise been cured or waived, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement and use the same degree of care and
skill in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs unless the Trustee
is acting as Master Servicer, in which case it shall use the same degree of
care and skill as the Master Servicer hereunder.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they are in the form required by this Agreement; PROVIDED, HOWEVER,
that the Trustee shall not be responsible for the accuracy or content of any
such resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer, to the Trustee pursuant to
this Agreement, and shall not be required to recalculate or verify any
numerical information furnished to the Trustee pursuant to this Agreement.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful misconduct.
Notwithstanding anything in this Agreement to the contrary, the Trustee shall
not be liable for special, indirect or consequential losses or damages of any
kind whatsoever (including, but not limited to, lost profits). No provision of
this Agreement shall be construed to relieve the Trustee from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct; PROVIDED, HOWEVER, that:
(i) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates as provided in
Section 6.19 hereof;
(ii) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any Event of Default (other than resulting from
a failure by the Master Servicer (i) to remit funds (or to make Advances)
or (ii) to furnish information to the Trustee when required to do so)
unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Holders of the Certificates and this Agreement;
(iii) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it; and
(iv) The Trustee shall not be responsible for any act or omission of
the Master Servicer.
(d) The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; PROVIDED,
HOWEVER, that the Trustee shall use its best efforts to remit to the Master
Servicer upon receipt any such complaint, claim, demand, notice or other
document (i) which is delivered to the Corporate Trust Office of the Trustee,
(ii) of which a Responsible Officer has actual knowledge, and (iii) which
contains information sufficient to permit the Trustee to make a determination
that the real property to which such document relates is a Mortgaged Property.
(e) The Trustee shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of Certificateholders of any Class holding Certificates which
evidence, as to such Class, Percentage Interests aggregating not less than 25%
as to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement.
(f) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability for the performance of any of its duties
hereunder or the exercise of any of its rights or powers if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of,
any of the obligations of the Master Servicer or any Servicer under this
Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Master Servicer in accordance with the terms of this Agreement.
(g) Subject to Section 4.04, the Trustee shall not be held liable by
reason of any insufficiency in any account (including without limitation the
Collection Amount) held by or on behalf of the Trustee resulting from any
investment loss on any Eligible Investment included therein (except to the
extent that the Trustee is the obligor and has defaulted thereon).
(h) Except as otherwise provided herein, the Trustee shall have no duty
(A) to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of any
such recording or filing or depositing or to any rerecording, refiling or
redepositing of any thereof, (B) to see to any insurance, (C) to see to the
payment or discharge of any tax, assessment, or other governmental charge or
any lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in the
Collection Account or the Certificate Account, or (D) to confirm or verify the
contents of any reports or certificates of the Master Servicer delivered to
the Trustee pursuant to this Agreement believed by the Trustee to be genuine
and to have been signed or presented by the proper party or parties.
(i) The Trustee shall pay, out of its own funds, but not to exceed in the
aggregate $6,000 per calendar year, any fees assessed by the Rating Agencies
after the Closing Date in connection with maintaining the ratings of the
Certificates. Any additional fees in excess of such amounts shall be paid by the
Depositor.
Section 6.02. Certain Matters Affecting the Trustee. Except as otherwise
-------------------------------------
provided in Section 6.01:
(i) The Trustee may request, and may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of its
counsel or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by
it hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
(iii) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) Unless an Event of Default shall have occurred and be
continuing, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document (provided the same appears regular on its
face), unless requested in writing to do so by Holders of at least a
majority in Class Certificate Principal Amount (or Percentage Interest)
of each Class of Certificates; PROVIDED, HOWEVER, that, if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such
expense or liability or payment of such estimated expenses as a condition
to proceeding. The reasonable expense thereof shall be paid by the
Holders requesting such investigation;
(v) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, which agents or attorneys shall have any or all of the rights,
powers, duties and obligations of the Trustee conferred on them by such
appointment, provided that the Trustee shall continue to be responsible for
its duties and obligations hereunder to the extent provided herein, and
provided further that the Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney
appointed with due care by the Trustee;
(vi) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto, in each case at
the request, order or direction of any of the Certificateholders pursuant
to the provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
(vii) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act; and
(viii) The Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder.
Section 6.03. Trustee Not Liable for Certificates. The Trustee makes no
-----------------------------------
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the
Certificates) or of any Mortgage Loan, or related document save that the
Trustee represents that, assuming due execution and delivery by the other
parties hereto, this Agreement has been duly authorized, executed and
delivered by it and constitutes its valid and binding obligation, enforceable
against it in accordance with its terms except that such enforceability may be
subject to (A) applicable bankruptcy and insolvency laws and other similar
laws affecting the enforcement of the rights of creditors generally, and (B)
general principles of equity regardless of whether such enforcement is
considered in a proceeding in equity or at law. The Trustee shall not be
accountable for the use or application by the Depositor of funds paid to the
Depositor in consideration of the assignment of the Mortgage Loans to the
Trust Fund by the Depositor or for the use or application of any funds
deposited into the Collection Account, the Certificate Account, any Escrow
Account or any other fund or account maintained with respect to the
Certificates. The Trustee shall not be responsible for the legality or
validity of this Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be
issued hereunder. Except as otherwise provided herein, the Trustee shall have
no responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to record this
Agreement.
Section 6.04. Trustee May Own Certificates. The Trustee and any Affiliate
----------------------------
or agent of the Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact banking and trust with the
other parties hereto with the same rights it would have if it were not Trustee
or such agent.
Section 6.05. Eligibility Requirements for Trustee. The Trustee hereunder
------------------------------------
shall at all times be (i) an institution insured by the FDIC and (ii) a
corporation or national banking association, organized and doing business
under the laws of any State or the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such corporation or national banking
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then, for the purposes of this Section, the combined capital and surplus of
such corporation or national banking association shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section
6.06.
Section 6.06. Resignation and Removal of Trustee. (a) The Trustee may at
----------------------------------
any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Depositor and the Master Servicer. Upon
receiving such notice of resignation, the Depositor will promptly appoint a
successor trustee by written instrument, one copy of which instrument shall be
delivered to the resigning Trustee, one copy to the successor trustee and one
copy to the Master Servicer. If no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.05 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, (iii)
a tax is imposed or threatened with respect to the Trust Fund by any state in
which the Trustee or the Trust Fund held by the Trustee is located, or (iv)
the continued use of the Trustee would result in a downgrading of the rating
by the Rating Agencies of any Class of Certificates with a rating, then the
Depositor shall remove the Trustee and appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the Trustee so
removed, one copy to the successor trustee and one copy to the Master
Servicer.
(c) The Holders of more than 50% of the Class Certificate Principal
Amount (or Percentage Interest) of each Class of Certificates may at any time
upon 30 days' written notice to the Trustee and to the Depositor remove the
Trustee by such written instrument, signed by such Holders or their
attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor, one copy to the Trustee so removed and one copy to
the Master Servicer; the Depositor shall thereupon use its best efforts to
appoint a mutually acceptable successor trustee in accordance with this
Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 6.07.
Section 6.07. Successor Trustee. (a) Any successor trustee appointed as
-----------------
provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor, the Master Servicer and to its predecessor trustee an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and
documents and statements related to each Mortgage Files held by it hereunder,
and shall duly assign, transfer, deliver and pay over to the successor trustee
the entire Trust Fund, together with all necessary instruments of transfer and
assignment or other documents properly executed necessary to effect such
transfer and such of the record or copies thereof maintained by the
predecessor trustee in the administration hereof as may be requested by the
successor trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Master Servicer and
the predecessor trustee shall execute and deliver such other instruments and
do such other things as may reasonably be required to more fully and certainly
vest and confirm in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.05.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown
in the Certificate Register and to the Rating Agencies. The expenses of such
mailing shall be borne by the Master Servicer.
Section 6.08. Merger or Consolidation of Trustee. Any Person into which
----------------------------------
the Trustee may be merged or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Persons succeeding to the business of the Trustee,
shall be the successor to the Trustee hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided that such
Person shall be eligible under the provisions of Section 6.05.
Section 6.09. Appointment of Co-Trustee, Separate Trustee or Custodian.
--------------------------------------------------------
(a) Notwithstanding any other provisions hereof, at any time, the Trustee, the
Depositor or the Certificateholders evidencing more than 50% of the Class
Certificate Principal Amount (or Percentage Interest) of each Class of
Certificates shall each have the power from time to time to appoint one or
more Persons to act either as co-trustees jointly with the Trustee, or as
separate trustees, or as custodians, for the purpose of holding title to,
foreclosing or otherwise taking action with respect to any Mortgage Loan
outside the state where the Trustee has its principal place of business where
such separate trustee or co-trustee is necessary or advisable (or the Trustee
has been advised by the Master Servicer that such separate trustee or
co-trustee is necessary or advisable) under the laws of any state in which a
property securing a Mortgage Loan is located or for the purpose of otherwise
conforming to any legal requirement, restriction or condition in any state in
which a property securing a Mortgage Loan is located or in any state in which
any portion of the Trust Fund is located. The separate Trustees, co-trustees,
or custodians so appointed shall be trustees or custodians for the benefit of
all the Certificateholders and shall have such powers, rights and remedies as
shall be specified in the instrument of appointment; PROVIDED, HOWEVER, that
no such appointment shall, or shall be deemed to, constitute the appointee an
agent of the Trustee. The obligation of the Trustee to make Advances pursuant
to Section 5.04 and 6.14 hereof shall not be affected or assigned by the
appointment of a co-trustee.
(b) Every separate trustee, co-trustee, and custodian shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of moneys shall be
exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee, co-trustee, or
custodian jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the
Trustee shall be incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations, including the
holding of title to the Trust Fund or any portion thereof in any such
jurisdiction, shall be exercised and performed by such separate trustee,
co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be personally liable
by reason of any act or omission of any other trustee or custodian
hereunder; and
(iv) the Trustee or the Certificateholders evidencing more than 50%
of the Aggregate Voting Interests of the Certificates may at any time
accept the resignation of or remove any separate trustee, co-trustee or
custodian, so appointed by it or them, if such resignation or removal
does not violate the other terms of this Agreement.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision
of this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed
with the Trustee.
(d) Any separate trustee, co-trustee or custodian may, at any time,
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.05 hereunder and no notice to Certificateholders of the appointment shall be
required under Section 6.07 hereof.
(f) The Trustee agrees to instruct the co-trustees, if any, to the extent
necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the co-trustees
to the extent, and in accordance with the standards, specified in Section 6.12
hereof (which compensation shall not reduce any compensation payable to the
Trustee under such Section).
Section 6.10. Authenticating Agents. (a) The Trustee may appoint one or
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more Authenticating Agents which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and
a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be a corporation
organized and doing business under the laws of the United States of America or
of any state, having a combined capital and surplus of at least $15,000,000,
authorized under such laws to do a trust business and subject to supervision
or examination by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any Person succeeding to the corporate agency business of
any Authenticating Agent, shall continue to be the Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least 30
days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent
by giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.10, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment
to the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.10.
No Authenticating Agent shall have responsibility or liability for any action
taken by it as such at the direction of the Trustee. Any Authenticating Agent
shall be entitled to reasonable compensation for its services and, if paid by
the Trustee, it shall be a reimbursable expense pursuant to Section 6.12.
Section 6.11. Indemnification of Trustee. The Trustee and its directors,
--------------------------
officers, employees and agents shall be entitled to indemnification from the
Trust Fund for any loss, liability or expense incurred in connection with any
legal proceeding and incurred without negligence or willful misconduct on
their part, arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder, including the costs and
expenses of defending themselves against any claim in connection with the
exercise or performance of any of their powers or duties hereunder, provided
that:
(i) with respect to any such claim, the Trustee shall have given the
Depositor, the Master Servicer and the Holders written notice thereof
promptly after the Trustee shall have knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Depositor in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section 6.11,
the Trust Fund shall not be liable for settlement of any such claim by
the Trustee entered into without the prior consent of the Depositor,
which consent shall not be unreasonably withheld.
The provisions of this Section 6.11 shall survive any termination of this
Agreement and the resignation or removal of the Trustee and shall be construed
to include, but not be limited to any loss, liability or expense under any
environmental law.
Section 6.12. Fees and Expenses of Trustee. In addition to the Trustee
----------------------------
Fee, to the extent provided herein, the Trustee shall be entitled to receive,
and is authorized to pay to itself the amount of income or gain earned from
the investment of funds in the Certificate Account.
Section 6.13. Collection of Monies. Except as otherwise expressly
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provided in this Agreement, the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The Trustee shall hold
all such money and property received by it as part of the Trust Fund and shall
distribute it as provided in this Agreement. If the Trustee shall not have
timely received amounts to be remitted with respect to the Mortgage Loans from
the Master Servicer, the Trustee shall request the Master Servicer to make
such distribution as promptly as practicable or legally permitted. If the
Trustee shall subsequently receive any such amount, it may withdraw such
request.
Section 6.14. Trustee To Act; Appointment of Successor. (a) The
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occurrence of any one or more of the following events shall constitute an
"Event of Default"):
(i) Any failure by the Master Servicer to furnish the Trustee the
Mortgage Loan data sufficient to prepare the reports described in Section
4.03(a) which continues unremedied for a period of one Business Day after
the date upon which written notice of such failure shall have been given
to such Master Servicer by the Trustee or to such Master Servicer and the
Trustee by the Holders of not less than 25% of the Class Certificate
Principal Amount (or Percentage Interest) of each Class of Certificates
affected thereby; or
(ii) Any failure on the part of the Master Servicer duly to observe
or perform in any material respect any other of the covenants or
agreements on the part of such Master Servicer contained in this
Agreement which continues unremedied for a period of 30 days (or 15 days,
in the case of a failure to maintain any Insurance Policy required to be
maintained pursuant to this Agreement) after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to such Master Servicer by the Trustee, or to such Master
Servicer and the Trustee by the Holders of not less than 25% of the Class
Certificate Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby; or
(iii) A decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer, and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days or any Rating
Agency reduces or withdraws or threatens to reduce or withdraw the rating
of the Certificates because of the financial condition or loan servicing
capability of such Master Servicer; or
(iv) The Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, voluntary liquidation or
similar proceedings of or relating to such Master Servicer or of or
relating to all or substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets, or consolidate with or merge into
another entity or shall permit another entity to consolidate or merge
into it, such that the resulting entity does not meet the criteria for a
successor servicer as specified in Section 9.27 hereof; or
(vii) If a representation or warranty set forth in Section 9.14
hereof shall prove to be incorrect as of the time made in any respect
that materially and adversely affects the interests of the
Certificateholders, and the circumstance or condition in respect of which
such representation or warranty was incorrect shall not have been
eliminated or cured within 60 days after the date on which written notice
of such incorrect representation or warranty shall have been given to the
Master Servicer by the Trustee, or to the Master Servicer and the Trustee
by the Holders of not less than 25% of the Aggregate Certificate
Principal Amount of each Class of Certificates; or
(viii) A sale or pledge of the any of the rights of the Master
Servicer hereunder or an assignment of this Agreement by the Master
Servicer or a delegation of the rights or duties of the Master Servicer
hereunder shall have occurred in any manner not otherwise permitted
hereunder and without the prior written consent of the Trustee and
Certificateholders holding more than 50% of the Class Certificate
Principal Amount (or Percentage Interest) of each Class of Certificates;
or
(ix) Any Servicer at any time is not either an FNMA- or FHLMC-
approved servicer, and the Master Servicer has not terminated the rights
and obligations of such Servicer under the applicable Servicing Agreement
and replaced such Servicer with an FNMA- or FHLMC-approved servicer
within 45 days of the absence of such approval; or
(x) Any failure of the Master Servicer to remit to the Trustee any
payment required to be made to the Trustee for the benefit of
Certificateholders under the terms of this Agreement, including any
Advance, on any Deposit Date.
If an Event of Default described in clauses (i) through (ix) of this
Section 6.14 shall occur, then, in each and every case, subject to applicable
law, so long as any such Event of Default shall not have been remedied within
any period of time prescribed by this Section 6.14, the Trustee, by notice in
writing to the Master Servicer may, and shall, if so directed by
Certificateholders evidencing more than 50% of the Class Certificate Principal
Amount (or Percentage Interest) of each Class of Certificates affected
thereby, terminate all of the rights and obligations of the Master Servicer
hereunder and in and to the Mortgage Loans and the proceeds thereof. If an
Event of Default described in clause (x) of this Section 6.14 shall occur,
then, in each and every case, subject to applicable law, the Trustee, by
notice in writing to the Master Servicer, shall promptly terminate all of the
rights and obligations of the Master Servicer hereunder and in and to the
Mortgage Loans and the proceeds thereof. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master
Servicer, and only in its capacity as Master Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under the terms of this Agreement; and
the Trustee is hereby authorized and empowered to execute and deliver, on
behalf of the defaulting Master Servicer as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, whether to complete the transfer and endorsement or assignment
of the Mortgage Loans and related documents or otherwise. The defaulting
Master Servicer agrees to cooperate with the Trustee in effecting the
termination of the defaulting Master Servicer's responsibilities and rights
hereunder as Master Servicer including, without limitation, notifying
Mortgagors of the assignment of the master servicing function and providing
the Trustee or its designee all documents and records in electronic or other
form reasonably requested by it to enable the Trustee or its designee to
assume the defaulting Master Servicer's functions hereunder and the transfer
to the Trustee for administration by it of all amounts which shall at the time
be or should have been deposited by the defaulting Master Servicer in the
Collection Account maintained by such defaulting Master Servicer and any other
account or fund maintained with respect to the Certificates or thereafter
received with respect to the Mortgage Loans. The Master Servicer being
terminated shall bear all costs of a master servicing transfer, including but
not limited to those of the Trustee reasonably allocable to specific employees
and overhead, legal fees and expenses, accounting and financial consulting
fees and expenses, and costs of amending the Agreement, if necessary.
Notwithstanding the termination of its activities as Master Servicer,
each terminated Master Servicer shall continue to be entitled to reimbursement
to the extent provided in Section 4.02(i), (ii), (iii), (iv), (v), (vi), (vii)
and (ix) to the extent such reimbursement relates to the period prior to such
Master Servicer's termination.
If any Event of Default shall occur, the Trustee shall promptly notify
the Rating Agencies of the nature and extent of such Event of Default. The
Trustee shall immediately give written notice to the Master Servicer upon such
Master Servicer's failure to remit funds on the Deposit Date.
(b) On and after the time the Master Servicer receives a notice of
termination from the Trustee pursuant to Section 6.14(a) or the Trustee
receives the resignation of the Master Servicer evidenced by an Opinion of
Counsel pursuant to Section 9.29, the Trustee, unless another master servicer
shall have been appointed, shall be the successor in all respects to the
Master Servicer in its capacity as such under this Agreement and the
transactions set forth or provided for herein and shall have all the rights
and powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Master Servicer
hereunder, including the obligation to make Advances; PROVIDED, HOWEVER, that
any failure to perform such duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In addition, the Trustee
shall have no responsibility for any act or omission of the Master Servicer
prior to the issuance of any notice of termination and shall have no liability
relating to the representations and warranties of the Master Servicer set
forth in Section 9.14. In the Trustee's capacity as such successor, the
Trustee shall have the same limitations on liability herein granted to the
Master Servicer. As compensation therefor, the Trustee shall be entitled to
receive all compensation payable to the Master Servicer under this Agreement,
including the Master Servicing Fee.
(c) Notwithstanding the above, the Trustee may, if it shall be unwilling
to continue to so act, or shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution servicer, master servicer, servicing or mortgage
servicing institution having a net worth of not less than $15,000,000 and
meeting such other standards for a successor master servicer as are set forth
in this Agreement, as the successor to such Master Servicer in the assumption
of all of the responsibilities, duties or liabilities of a master servicer,
like the Master Servicer. Any entity designated by the Trustee as a successor
master servicer may be an Affiliate of the Trustee; PROVIDED, HOWEVER, that,
unless such Affiliate meets the net worth requirements and other standards set
forth herein for a successor master servicer, the Trustee, in its individual
capacity shall agree, at the time of such designation, to be and remain liable
to the Trust Fund for such Affiliate's actions and omissions in performing its
duties hereunder. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree; PROVIDED,
HOWEVER, that no such compensation shall be in excess of that permitted to the
Master Servicer hereunder. The Trustee and such successor shall take such
actions, consistent with this Agreement, as shall be necessary to effectuate
any such succession and may make other arrangements with respect to the
servicing to be conducted hereunder which are not inconsistent herewith. The
Master Servicer shall cooperate with the Trustee and any successor master
servicer in effecting the termination of the Master Servicer's
responsibilities and rights hereunder including, without limitation, notifying
Mortgagors of the assignment of the master servicing functions and providing
the Trustee and successor master servicer, as applicable, all documents and
records in electronic or other form reasonably requested by it to enable it to
assume the Master Servicer's functions hereunder and the transfer to the
Trustee or such successor master servicer, as applicable, all amounts which
shall at the time be or should have been deposited by the Master Servicer in
the Collection Account and any other account or fund maintained with respect
to the Certificates or thereafter be received with respect to the Mortgage
Loans. Neither the Trustee nor any other successor master servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any
delay in making, any distribution hereunder or any portion thereof caused by
(i) the failure of the Master Servicer to deliver, or any delay in delivering,
cash, documents or records to it, (ii) the failure of the Master Servicer to
cooperate as required by this Agreement, (iii) the failure of the Master
Servicer to deliver the Mortgage Loan data to the Trustee as required by this
Agreement or (iv) restrictions imposed by any regulatory authority having
jurisdiction over the Master Servicer.
Section 6.15. Additional Remedies of Trustee Upon Event of Default.
----------------------------------------------------
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Section 6.14, shall have the right, in its own name and as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no
remedy provided for by this Agreement shall be exclusive of any other remedy,
and each and every remedy shall be cumulative and in addition to any other
remedy, and no delay or omission to exercise any right or remedy shall impair
any such right or remedy or shall be deemed to be a waiver of any Event of
Default.
Section 6.16. Waiver of Defaults. 35% or more of the Aggregate Voting
------------------
Interests of Certificateholders may waive any default or Event of Default by
the Master Servicer in the performance of its obligations hereunder, except
that a default in the making of any required deposit to the Certificate
Account that would result in a failure of the Trustee to make any required
payment of principal of or interest on the Certificates may only be waived
with the consent of 100% of the affected Certificateholders. Upon any such
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 6.17. Notification to Holders. Upon termination of the Master
-----------------------
Servicer or appointment of a successor to the Master Servicer, in each case as
provided herein, the Trustee shall promptly mail notice thereof by first class
mail to the Certificateholders at their respective addresses appearing on the
Certificate Register. The Trustee shall also, within 45 days after the
occurrence of any Event of Default known to the Trustee, give written notice
thereof to Certificateholders, unless such Event of Default shall have been
cured or waived prior to the issuance of such notice and within such 45-day
period.
Section 6.18. Directions by Certificateholders and Duties of Trustee
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During Event of Default. Subject to the provisions of Section 8.01 hereof,
-----------------------
during the continuance of any Event of Default, Holders of Certificates
evidencing not less than 25% of the Class Certificate Principal Amount (or
Percentage Interest) of each Class of Certificates affected thereby may direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement; PROVIDED, HOWEVER, that the Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the
trusts or powers vested in it by this Agreement (including, without
limitation, (i) the conducting or defending of any administrative action or
litigation hereunder or in relation hereto and (ii) the terminating of the
Master Servicer or any successor master servicer from its rights and duties as
master servicer hereunder) at the request, order or direction of any of the
Certificateholders, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the cost, expenses and
liabilities which may be incurred therein or thereby; and, provided further,
that, subject to the provisions of Section 8.01, the Trustee shall have the
right to decline to follow any such direction if the Trustee, in accordance
with an Opinion of Counsel, determines that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith determines
that the action or proceeding so directed would involve it in personal
liability or be unjustly prejudicial to the non-assenting Certificateholders.
Section 6.19. Action Upon Certain Failures of the Master Servicer and
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Upon Event of Default. In the event that the Trustee shall have actual
---------------------
knowledge of any action or inaction of the Master Servicer that would become
an Event of Default upon the Master Servicer's failure to remedy the same
after notice, the Trustee shall give notice thereof to the Master Servicer.
ARTICLE VII
PURCHASE OF MORTGAGE LOANS AND
TERMINATION OF THE TRUST FUND
Section 7.01. Purchase of Mortgage Loans; Termination of Trust Fund Upon
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Purchase or Liquidation of All Mortgage Loans. (a) The respective obligations
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and responsibilities of the Trustee and the Master Servicer created hereby
(other than the obligation of the Trustee to make payments to
Certificateholders as set forth in Section 7.02, the obligation of the Master
Servicer to make a final remittance to the Trustee for deposit into the
Certificate Account pursuant to Section 4.01 and the obligations of the Master
Servicer to the Trustee pursuant to Sections 9.10 and 9.14) shall terminate on
the earlier of (i) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the sale of the property held by the Trust Fund in accordance with
Section 7.01(b) or (c); PROVIDED, HOWEVEr, that in no event shall the Trust
Fund created hereby continue beyond the earlier of (i) the expiration of 21
years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof, and (ii) the Latest Possible Maturity Date. Any
termination of the Trust Fund shall be carried out in such a manner so that
the termination of each REMIC included therein shall qualify as a "qualified
liquidation" under the REMIC Provisions.
(b) On any Distribution Date occurring on or after the Distribution Date
on which the Pool Balance for any Mortgage Pool is less than 10% of the Pool
Balance thereof as of the Cut-off Date, each Holder of a Class X Certificate
has the option to purchase all, but not less than all, of the Mortgage Loans,
REO Property and any other related property in the related Mortgage Pool for
the Purchase Price, and, upon exercise of such option, such Mortgage Loans and
related property shall be sold to the Holder of the related Class X
Certificate. If any Class X Certificateholder has not exercised such option by
the close of business on the third Distribution Date following the
Distribution Date specified above, the Servicer (or, if Aurora is not the
Servicer, then the Master Servicer) shall have the option to purchase all, but
not less than all, of the Mortgage Loans, REO Property and any other related
property in the related Mortgage Pool for the Purchase Price, and, upon
exercise of such option, such Mortgage Loans and related property shall be
sold to the Servicer (or the Master Servicer). If the Servicer (or the Master
Servicer) elects to exercise such right as to any Mortgage Pool, then upon
receipt of notice thereof the Trustee shall promptly notify the related Class
X Certificateholder thereof, in writing, and shall effect the transfer of the
related Mortgage Loans and related property to the Servicer (or the Master
Servicer) as provided herein only if the Trustee does not receive notification
from such Class X Certificateholder within ten Business Days of the sending of
such notice that such Certificateholder intends to promptly exercise its
option to purchase such Mortgage Loans and related property.
When each Holder of a Class X Certificate, or the Servicer (or the Master
Servicer), has exercised such option as to all Mortgage Pools, the Trust Fund
shall adopt a plan of complete liquidation pursuant to Section 7.03(a)(i)
hereof to sell all of its property. If the Holders of Class X Certificates or
the Servicer (or the Master Servicer) exercise such options as to all Mortgage
Pools, the aggregate of the Purchase Prices shall equal the Termination Price.
Section 7.02. Procedure Upon Termination of Trust Fund. (a) Notice of any
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termination pursuant to the provisions of Section 7.01, specifying the
Distribution Date upon which the final distribution shall be made, shall be
given promptly by the Trustee by first class mail to Certificateholders mailed
upon (x) the sale of all of the property of the Trust Fund by the Trustee
pursuant to Section 7.01(b) or (y) upon the final payment or other liquidation
of the last Mortgage Loan or REO Property in the Trust Fund. Such notice shall
specify (A) the Distribution Date upon which final distribution on the
Certificates of all amounts required to be distributed to Certificateholders
pursuant to Section 5.02 will be made upon presentation and surrender of the
Certificates at the Corporate Trust Office, and (B) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distribution
being made only upon presentation and surrender of the Certificates at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Master Servicer and the Certificate Registrar at the time such
notice is given to Holders of the Certificates. Upon any such termination, the
duties of the Certificate Registrar with respect to the Certificates shall
terminate and the Trustee shall terminate, or request the Master Servicer to
terminate, the Collection Account it maintains, the Certificate Account and
any other account or fund maintained with respect to the Certificates, subject
to the Trustee's obligation hereunder to hold all amounts payable to
Certificateholders in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to
contact the remaining Certificateholders concerning surrender of such
Certificates, and the cost thereof shall be paid out of the amounts
distributable to such Holders. If within two years after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee
shall, subject to applicable state law relating to escheatment, hold all
amounts distributable to such Holders for the benefit of such Holders. No
interest shall accrue on any amount held by the Trustee and not distributed to
a Certificateholder due to such Certificateholder's failure to surrender its
Certificate(s) for payment of the final distribution thereon in accordance
with this Section.
Section 7.03. Additional Trust Fund Termination Requirements. (a) Any
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termination of the Trust Fund shall be effected in accordance with the
following additional requirements, unless the Trustee seeks (at the request of
the Master Servicer), and subsequently receives, an Opinion of Counsel (at the
expense of the Master Servicer), addressed to the Trustee to the effect that
the failure of the Trust Fund to comply with the requirements of this Section
7.03 will not (i) result in the imposition of taxes on any REMIC under the
REMIC Provisions or (ii) cause any REMIC established hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 89 days prior to the time of the making of the final
payment on the Certificates (or, if the Holders of the Class X
Certificates or the Servicer or the Master Servicer have exercised their
options as provided in Section 7.01(b) as to all but one Mortgage Pool,
upon notification by the remaining Class X Certificateholder (or the
Servicer or the Master Servicer) that it intends to exercise such option
as to such remaining Mortgage Pool and thus cause the termination of the
Trust Fund), the Trustee shall adopt a plan of complete liquidation of
the Trust Fund on behalf of each REMIC, meeting the requirements of a
qualified liquidation under the REMIC Provisions;
(ii) The sale of the assets of the Trust Fund pursuant to Section
7.02 shall be a sale for cash and shall occur at or after the time of
adoption of such a plan of complete liquidation and prior to the time of
making of the final payment on the Certificates;
(iii) On the date specified for final payment of the Certificates,
the Trustee shall make final distributions of principal and interest on
the Certificates in accordance with Section 5.02 and, after payment of,
or provision for any outstanding expenses, distribute or credit, or cause
to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand after such final payment (other than cash
retained to meet claims), and the Trust Fund (and each REMIC) shall
terminate at that time; and
(iv) In no event may the final payment on the Certificates or the
final distribution or credit to the Holders of the Residual Certificates
be made after the 89th day from the date on which the plan of complete
liquidation is adopted.
(b) By its acceptance of a Residual Certificate, each Holder thereof
hereby (i) authorizes the Trustee to take such action as may be necessary to
adopt a plan of complete liquidation of the related REMIC and (ii) agrees to
take such other action as may be necessary to adopt a plan of complete
liquidation of the related REMIC, which authorization shall be binding upon
all successor Residual Certificateholders.
ARTICLE VIII
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders. (a) The death or
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incapacity of any Certificateholder shall not operate to terminate this
Agreement or this Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or
proceeding in any court for a partition or winding up of this Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them. Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder,
shall have any right to vote or in any manner otherwise control the Master
Servicer or the operation and management of the Trust Fund, or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in
the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association,
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates evidencing not less than 25% of the
Class Certificate Principal Amount (or Percentage Interest) of Certificates of
each Class affected thereby shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as
it may require against the cost, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for sixty days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent
with such written request has been given such Trustee during such sixty-day
period by such Certificateholders; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the benefit
of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 8.02. Access to List of Holders. (a) If the Trustee is not acting
-------------------------
as Certificate Registrar, the Certificate Registrar will furnish or cause to
be furnished to the Trustee, within fifteen days after receipt by the
Certificate Registrar of a request by the Trustee in writing, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Certificateholders of each Class as of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter referred
to as "Applicants") apply in writing to the Trustee, and such application
states that the Applicants desire to communicate with other Holders with
respect to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt
of such application, afford such Applicants reasonable access during the
normal business hours of the Trustee to the most recent list of
Certificateholders held by the Trustee or shall, as an alternative, send, at
the Applicants' expense, the written communication proffered by the Applicants
to all Certificateholders at their addresses as they appear in the Certificate
Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Master Servicer, the Certificate Registrar and the Trustee that neither the
Depositor, the Master Servicer, the Certificate Registrar nor the Trustee
shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 8.03. Acts of Holders of Certificates. (a) Any request, demand,
-------------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Holders or Certificate Owner, if the
Holder is a Clearing Agency, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where expressly required herein,
to the Master Servicer. Such instrument or instruments (as the action embodies
therein and evidenced thereby) are herein sometimes referred to as an "Act" of
the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agents shall be sufficient
for any purpose of this Agreement and conclusive in favor of the Trustee and
Master Servicer, if made in the manner provided in this Section. Each of the
Trustee and Master Servicer shall promptly notify the other of receipt of any
such instrument by it, and shall promptly forward a copy of such instrument to
the other.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments or deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership,
such certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the individual executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates shall
be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee, the Master Servicer, nor the
Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Master Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
ARTICLE IX
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01. Duties of the Master Servicer. The Certificateholders, by
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their purchase and acceptance of the Certificates, appoint Norwest Bank
Minnesota, National Association, as Master Servicer. For and on behalf of the
Depositor, the Trustee and the Certificateholders, the Master Servicer shall
master service the Mortgage Loans in accordance with the provisions of this
Agreement and the provisions of the applicable Servicing Agreement.
Section 9.02. Master Servicer Fidelity Bond and Master Servicer Errors
--------------------------------------------------------
and Omissions Insurance Policy. (a) The Master Servicer, at its expense, shall
------------------------------
maintain in effect a Master Servicer Fidelity Bond and a Master Servicer
Errors and Omissions Insurance Policy, affording coverage with respect to all
directors, officers, employees and other Persons acting on such Master
Servicer's behalf, and covering errors and omissions in the performance of the
Master Servicer's obligations hereunder. The Master Servicer Errors and
Omissions Insurance Policy and the Master Servicer Fidelity Bond shall be in
such form and amount that would meet the requirements of FNMA or FHLMC if it
were the purchaser of the Mortgage Loans. The Master Servicer shall (i)
require each Servicer to maintain an Errors and Omissions Insurance Policy and
a Servicer Fidelity Bond in accordance with the provisions of the applicable
Servicing Agreement, (ii) cause each Servicer to provide to the Master
Servicer certificates evidencing that such policy and bond is in effect and to
furnish to the Master Servicer any notice of cancellation, non-renewal or
modification of the policy or bond received by it, as and to the extent
provided in the applicable Servicing Agreement, and (iii) furnish copies of
the certificates and notices referred to in clause (ii) to the Trustee upon
its request.
(b) The Master Servicer shall promptly report to the Trustee any material
changes that may occur in the Master Servicer Fidelity Bond or the Master
Servicer Errors and Omissions Insurance Policy and shall furnish to the
Trustee, on request, certificates evidencing that such bond and insurance
policy are in full force and effect. The Master Servicer shall promptly report
to the Trustee all cases of embezzlement or fraud, if such events involve
funds relating to the Mortgage Loans. The total losses, regardless of whether
claims are filed with the applicable insurer or surety, shall be disclosed in
such reports together with the amount of such losses covered by insurance. If
a bond or insurance claim report is filed with any of such bonding companies
or insurers, the Master Servicer shall promptly furnish a copy of such report
to the Trustee. Any amounts relating to the Mortgage Loans collected by the
Master Servicer under any such bond or policy shall be promptly remitted by
the Master Servicer to the Trustee for deposit into the Certificate Account.
Any amounts relating to the Mortgage Loans collected by any Servicer under any
such bond or policy shall be remitted to the Master Servicer to the extent
provided in the applicable Servicing Agreement.
Section 9.03. Master Servicer's Financial Statements and Related
--------------------------------------------------
Information. For each year this Agreement is in effect, the Master Servicer
-----------
shall submit to the Trustee, each Rating Agency and the Depositor a copy of
its annual unaudited financial statements on or prior to May 31 of each year,
beginning May 31, 1999. Such financial statements shall include a balance
sheet, income statement, statement of retained earnings, statement of
additional paid-in capital, statement of changes in financial position and all
related notes and schedules and shall be in comparative form, certified by a
nationally recognized firm of Independent Accountants to the effect that such
statements were examined and prepared in accordance with generally accepted
accounting principles applied on a basis consistent with that of the preceding
year.
Section 9.04. Power to Act; Procedures. (a) The Master Servicer shall
------------------------
master service the Mortgage Loans and shall have full power and authority,
subject to the REMIC Provisions and the provisions of Article X hereof, and
each Servicer shall have full power and authority (to the extent provided in
the applicable Servicing Agreement) to do any and all things that it may deem
necessary or desirable in connection with the servicing and administration of
the Mortgage Loans, including but not limited to the power and authority (i)
to execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided that the Master Servicer shall
not take, or knowingly permit any Servicer to take, any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Master Servicer shall represent and protect the interests of the Trust Fund 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 Servicer to make any modification, waiver or
amendment of any term of any Mortgage Loan that would cause the Trust Fund to
fail to qualify as a REMIC or result in the imposition of any tax under
Section 860F(a) or Section 860G(d) of the Code. Without limiting the
generality of the foregoing, the Master Servicer in its own name or in the
name of a Servicer, and each Servicer, to the extent such authority is
delegated to such Servicer by the Master Servicer under the applicable
Servicing Agreement, is hereby authorized and empowered by the Trustee when
the Master Servicer or a Servicer, as the case may be, believes it appropriate
in its best judgment and in accordance with Accepted Servicing Practices and
the applicable Servicing Agreement, to execute and deliver, on behalf of
itself and the Certificateholders, the Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties. The Trustee shall furnish
the Master Servicer, upon request, with any powers of attorney empowering the
Master Servicer or any Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
to foreclose upon or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in any court action relating to the Mortgage Loans or the
Mortgaged Property, in accordance with the applicable Servicing Agreement and
this Agreement, and the Trustee shall execute and deliver such other
documents, as the Master Servicer may request, necessary or appropriate to
enable the Master Servicer to master service and administer the Mortgage Loans
and carry out its duties hereunder, in each case in accordance with Accepted
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer or any Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of
the state in which action is to be taken prohibit such action if taken in the
name of the Trustee or that the Trustee would be adversely affected under the
"doing business" or tax laws of such state if such action is taken in its
name, then upon request of the Trustee, the Master Servicer shall join with
the Trustee in the appointment of a co-trustee pursuant to Section 6.09
hereof. In the performance of its duties hereunder, the Master Servicer shall
be an independent contractor and shall not, except in those instances where it
is taking action in the name of the Trustee, be deemed to be the agent of the
Trustee.
(b) In master servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures, and shall cause each Servicer to employ
procedures (including, but not limited to, collection procedures), consistent
with the applicable Servicing Agreement. Consistent with the foregoing, the
Master Servicer may, and may permit any Servicer to, in its discretion (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due
dates for payments due on a Mortgage Note for a period not greater than 120
days; PROVIDED, HOWEVER, that the maturity of any Mortgage Loan shall not be
extended 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 extension
described in clause (ii) above, the Master Servicer shall make or cause to be
made Advances on the related Mortgage Loan in accordance with the provisions
of Section 5.04 on the basis of the amortization schedule of such Mortgage
Loan without modification thereof by reason of such extension. Notwithstanding
anything to the contrary in this Agreement, the Master Servicer shall not,
unless default by the related Mortgagor is, in the reasonable judgment of the
Master Servicer, imminent, permit any modification, waiver or amendment of any
material term of any Mortgage Loan (including but not limited to the interest
rate, the principal balance, the amortization schedule, or any other term
affecting the amount or timing of payments on the Mortgage Loan or the
collateral therefor) unless the Master Servicer shall have provided or caused
to be provided to the Trustee an Opinion of Counsel in writing to the effect
that such modification, waiver or amendment would not be treated as giving
rise to a new debt instrument for federal income tax purposes and would not
adversely affect the status of the REMIC.
Section 9.05. Servicing Agreements Between the Master Servicer and
----------------------------------------------------
Servicers; Enforcement of Servicers' Obligations. (a) Each Servicing Agreement
------------------------------------------------
requires the applicable Servicer to service the Mortgage Loans in accordance
with the provisions thereof. References in this Agreement to actions taken or
to be taken by the Master Servicer include actions taken or to be taken by a
Servicer on behalf of the Master Servicer. Any fees and other amounts payable
to such Servicers shall be deducted from amounts remitted to the Master
Servicer by the applicable Servicer and shall not be an obligation of the
Trust.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of each Servicer under the
related Servicing Agreement, and shall, in the event that a Servicer fails to
perform its obligations in accordance with the related Servicing Agreement,
terminate the rights and obligations of such Servicer thereunder and either
act as servicer of the related Mortgage Loans or enter into a Servicing
Agreement with a successor Servicer. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor initially (i)
from a general recovery resulting from such enforcement only to the extent, if
any, that such recovery exceeds all amounts due in respect of the related
Mortgage Loans or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party against whom such enforcement is directed,
and then, to the extent that such amounts are insufficient to reimburse the
Master Servicer for the costs of such enforcement, (iii) from the Collection
Account.
Section 9.06. Collection of Taxes, Assessments and Similar Items. (a) To
--------------------------------------------------
the extent provided in the applicable Servicing Agreement, the Master Servicer
shall cause each Servicer to establish and maintain one or more custodial
accounts at a depository institution (which may be a depository institution
with which the Master Servicer or any Servicer establishes accounts in the
ordinary course of its servicing activities), the accounts of which are
insured to the maximum extent permitted by the FDIC (each, an "Escrow
Account") and to deposit therein any collections of amounts received with
respect to amounts due for taxes, assessments, water rates, Standard Hazard
Insurance Policy premiums or any comparable items for the account of the
Mortgagors. Withdrawals from any Escrow Account may be made (to the extent
amounts have been escrowed for such purpose) only in accordance with the
applicable Servicing Agreement. Each Servicer shall be entitled to all
investment income not required to be paid to Mortgagors on any Escrow Account
maintained by such Servicer. The Master Servicer shall make (or cause to be
made) to the extent provided in the applicable Servicing Agreement advances to
the extent necessary in order to effect timely payment of taxes, water rates,
assessments, Standard Hazard Insurance Policy premiums or comparable items in
connection with the related Mortgage Loan (to the extent that the Mortgagor is
required, but fails, to pay such items), provided that it has determined that
the funds so advanced are recoverable from escrow payments, reimbursement
pursuant to Section 4.02(v) or otherwise.
(b) Costs incurred by the Master Servicer or by Servicers in effecting
the timely payment of taxes and assessments on the properties subject to the
Mortgage Loans may be added to the amount owing under the related Mortgage
Note where the terms of the Mortgage Note so permit; PROVIDED, HOWEVER, that
the addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders. Such costs, to
the extent that they are unanticipated, extraordinary costs, and not ordinary
or routine costs shall be recoverable by the Master Servicer pursuant to
Section 4.02(v).
Section 9.07. Termination of Servicing Agreements; Successor Servicers.
--------------------------------------------------------
(a) The Master Servicer shall be entitled to terminate the rights and
obligations of any Servicer under the applicable Servicing Agreement in
accordance with the terms and conditions of such Servicing Agreement and
without any limitation by virtue of this Agreement; PROVIDED, HOWEVER, that in
the event of termination of Servicing Agreement by the Master Servicer or the
related Servicer, the Master Servicer shall provide for the servicing of the
related Mortgage Loans as follows: (i) upon any such termination of Aurora as
Servicer, servicing of the related Mortgage Loans shall be transferred to the
Special Servicer, provided that the Special Servicer exercises its option to
acquire such servicing as provided below; and (ii) upon any such termination
of the Special Servicer, a successor special servicer shall be appointed as
provided in the Special Servicing Agreement. In each such case, servicing of
the related Mortgage Loans shall be performed by the applicable successor in
accordance with the provisions of the Servicing Agreement to which such
successor is a party. In the event that any such successor servicer fails to
notify the Master Servicer within 15 days of such proposed transfer described
in clause (i) or (ii) above of its intention to exercise its option to acquire
such servicing and to service the related Mortgage Loans in accordance with
the terms of the applicable Servicing Agreement, the Master Servicer shall
appoint a successor servicer or special servicer or shall itself (or through
an Affiliate) act as servicer or special servicer of the related Mortgage
Loans.
Notwithstanding the foregoing provisions to the extent applicable to
termination of the rights and obligations of the Special Servicer, the
Directing Holder, if any, shall have the rights accorded to it under the
Special Servicing Agreement.
(b) If the Master Servicer acts as Servicer, it will not assume liability
for the representations and warranties of the Servicer, if any, that it
replaces. The Master Servicer shall use reasonable efforts to have the
successor Servicer assume liability for the representations and warranties
made by the terminated Servicer in respect of the related Mortgage Loans, and
in the event of any such assumption by the successor Servicer, the Trustee or
the Master Servicer, as applicable, may, in the exercise of its business
judgment, release the terminated Servicer from liability for such
representations and warranties.
Section 9.08. Master Servicer Liable for Enforcement. Notwithstanding any
--------------------------------------
Servicing Agreement, the Master Servicer shall remain obligated and liable to
the Trustee and the Certificateholders in accordance with the provisions of
this Agreement, to the extent of its obligations hereunder, without diminution
of such obligation or liability by virtue of such Servicing Agreements or
arrangements. The Master Servicer shall ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall enforce
the provisions of each Servicing Agreement for the benefit of the
Certificateholders. The Master Servicer shall be entitled to enter into any
agreement with its Servicers for indemnification of the Master Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 9.09. No Contractual Relationship Between Servicers and Trustee
---------------------------------------------------------
or Depositor. Any Servicing Agreement that may be entered into and any other
------------
transactions or services relating to the Mortgage Loans involving a Servicer
in its capacity as such and not as an originator shall be deemed to be between
such Servicer, Xxxxxx Capital and the Master Servicer, and the Trustee and the
Depositor shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to such Servicer
except as set forth in Section 9.10 hereof.
Section 9.10. Assumption of Servicing Agreement by Trustee. (a) In the
--------------------------------------------
event the Master Servicer shall for any reason no longer be the Master
Servicer (including by reason of any Event of Default under this Agreement),
the Trustee shall thereupon assume all of the rights and obligations of such
Master Servicer hereunder and under each Servicing Agreement entered into with
respect to the Mortgage Loans. The Trustee, its designee or any successor
master servicer appointed by the Trustee shall be deemed to have assumed all
of the Master Servicer's interest herein and therein to the same extent as if
such Servicing Agreement had been assigned to the assuming party, except that
the Master Servicer shall not thereby be relieved of any liability or
obligations of the Master Servicer under such Servicing Agreement accruing
prior to its replacement as Master Servicer, and shall be liable to the
Trustee, and hereby agrees to indemnify and hold harmless the Trustee from and
against all costs, damages, expenses and liabilities (including reasonable
attorneys' fees) incurred by the Trustee as a result of such liability or
obligations of the Master Servicer and in connection with the Trustee's
assumption (but not its performance, except to the extent that costs or
liability of the Trustee are created or increased as a result of negligent or
wrongful acts or omissions of the Master Servicer prior to its replacement as
Master Servicer) of the Master Servicer's obligations, duties or
responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of
the Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to each Servicing Agreement
and the related Mortgage Loans and an accounting of amounts collected and held
by it and otherwise use its best efforts to effect the orderly and efficient
transfer of each Servicing Agreement to the assuming party.
Section 9.11. "Due-on-Sale" Clauses; Assumption Agreements. To the extent
--------------------------------------------
provided in the applicable Servicing Agreement, to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall cause the
Servicers to enforce such clauses in accordance with the applicable Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the applicable
Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the
original Mortgagor may be released from liability in accordance with the
applicable Servicing Agreement.
Section 9.12. Release of Mortgage Files. (a) Upon becoming aware of the
-------------------------
payment in full of any Mortgage Loan, or the receipt by the Master Servicer of
a notification that payment in full has been escrowed in a manner customary
for such purposes for payment to Certificateholders on the next Distribution
Date, the Master Servicer will, or will cause the applicable Servicer to,
promptly notify the Trustee (or the applicable Custodian) by a certification
(which certification shall include a statement to the effect that all amounts
received in connection with such payment that are required to be deposited in
the Collection Account maintained by the Master Servicer pursuant to Section
4.01 have been or will be so deposited) of a Servicing Officer and shall
request the Trustee or the applicable Custodian, to deliver to the applicable
Servicer the related Mortgage File. Upon receipt of such certification and
request, the Trustee or the applicable Custodian (with the consent, and at the
direction of the Trustee), shall promptly release the related Mortgage File to
the applicable Servicer and the Trustee shall have no further responsibility
with regard to such Mortgage File. Upon any such payment in full, the Master
Servicer is authorized, and each Servicer, to the extent such authority is
delegated to such Servicer by the Master Servicer under the applicable
Servicing Agreement, is authorized, to give, as agent for the Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of
satisfaction (or assignment of mortgage without recourse) regarding the
Mortgaged Property subject to the Mortgage, which instrument of satisfaction
or assignment, as the case may be, shall be delivered to the Person or Persons
entitled thereto against receipt therefor of such payment, it being understood
and agreed that no expenses incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the
Collection Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with Accepted Servicing Practices and
the applicable Servicing Agreement, the Trustee shall execute such documents
as shall be prepared and furnished to the Trustee by the Master Servicer, or
by a Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Trustee or the
applicable Custodian, shall, upon request of the Master Servicer, or of a
Servicer, and delivery to the Trustee or the applicable Custodian, of a trust
receipt signed by a Servicing Officer substantially in the form of Exhibit C,
release the related Mortgage File held in its possession or control to the
Master Servicer (or the applicable Servicer). Such trust receipt shall
obligate the Master Servicer or applicable Servicer to return the Mortgage
File to the Trustee or applicable Custodian, as applicable, when the need
therefor by the Master Servicer or applicable Servicer no longer exists unless
the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
trust receipt shall be released by the Trustee or the applicable Custodian, as
applicable, to the Master Servicer (or the applicable Servicer).
Section 9.13. Documents, Records and Funds in Possession of Master
----------------------------------------------------
Servicer To Be Held for Trustee. (a) The Master Servicer shall transmit, or
-------------------------------
cause the applicable Servicer to transmit, to the Trustee such documents and
instruments coming into the possession of the Master Servicer or such Servicer
from time to time as are required by the terms hereof to be delivered to the
Trustee. Any funds received by the Master Servicer or by a Servicer in respect
of any Mortgage Loan or which otherwise are collected by the Master Servicer
or by a Servicer as Liquidation Proceeds or Insurance Proceeds in respect of
any Mortgage Loan shall be held for the benefit of the Trustee and the
Certificateholders subject to the Master Servicer's right to retain or
withdraw from the Collection Account the Master Servicing Fee and other
amounts provided in this Agreement, and to the right of each Servicer to
retain its Servicing Fee as provided in the applicable Servicing Agreement.
The Master Servicer shall, and shall (to the extent provided in the applicable
Servicing Agreement) cause each Servicer to, provide access to information and
documentation regarding the Mortgage Loans to the Trustee, its agents and
accountants at any time upon reasonable request and during normal business
hours, and to Certificateholders that are savings and loan associations, banks
or insurance companies, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners
of any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or
other regulatory authority, such access to be afforded without charge but only
upon reasonable request in writing and during normal business hours at the
offices of the Master Servicer designated by it. In fulfilling such a request
the Master Servicer shall not be responsible for determining the sufficiency
of such information.
(b) All Mortgage Files and funds collected or held by, or under the
control of, the Master Servicer, or any Servicer, in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master
Servicer, or by any Servicer, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee; PROVIDED, HOWEVER, that the Master Servicer and each Servicer
shall be entitled to setoff against, and deduct from, any such funds any
amounts that are properly due and payable to the Master Servicer or such
Servicer under this Agreement or the applicable Servicing Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with the
execution of this Agreement, the Trustee shall own or, to the extent that a
court of competent jurisdiction shall deem the conveyance of the Mortgage
Loans from Xxxxxx Capital to the Depositor not to constitute a sale, the
Trustee shall have a security interest in the Mortgage Loans and in all
Mortgage Files representing such Mortgage Loans and in all funds now or
hereafter held by, or under the control of, a Servicer or the Master Servicer
that are collected by any Servicer or the Master Servicer in connection with
the Mortgage Loans, whether as scheduled installments of principal and
interest or as full or partial prepayments of principal or interest or as
Liquidation Proceeds or Insurance Proceeds or otherwise, and in all proceeds
of the foregoing and proceeds of proceeds (but excluding any fee or other
amounts to which a Servicer is entitled under its Servicing Agreement, or the
Master Servicer or the Depositor is entitled to hereunder); and the Master
Servicer agrees that so long as the Mortgage Loans are assigned to and held by
the Trustee, all documents or instruments constituting part of the Mortgage
Files, and such funds relating to the Mortgage Loans which come into the
possession or custody of, or which are subject to the control of, the Master
Servicer or any Servicer shall be held by the Master Servicer or such Servicer
for and on behalf of the Trustee as the Trustee's agent and bailee for
purposes of perfecting the Trustee's security interest therein as provided by
the applicable Uniform Commercial Code or other laws.
(d) The Master Servicer agrees that it shall not, and shall not authorize
any Servicer to, create, incur or subject any Mortgage Loans, or any funds
that are deposited in any custodial account, Escrow Account or the Collection
Account, or any funds that otherwise are or may become due or payable to the
Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on,
or in connection with, a Mortgage Loan.
Section 9.14. Representations and Warranties of the Master Servicer. (a)
-----------------------------------------------------
The Master Servicer hereby represents and warrants to the Depositor and the
Trustee, for the benefit of the Certificateholders, as of the Closing Date
that:
(i) it is validly existing and in good standing under the laws of
the United States of America as a national banking association, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized by
all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under,
or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation, default
or breach would materially and adversely affect the Master Servicer's
ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default
would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement
or instrument or subject to any charter provision, bylaw or any other
corporate restriction or any judgment, order, writ, injunction, decree,
law or regulation that may materially and adversely affect its ability as
Master Servicer to perform its obligations under this Agreement or that
requires the consent of any third person to the execution of this
Agreement or the performance by the Master Servicer of its obligations
under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage
loans, is an FNMA- and FHLMC-approved seller/servicer;
(viii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer;
and
(x) the Master Servicer has obtained an Errors and Omissions
Insurance Policy and a Fidelity Bond, each of which is in full force and
effect, and each of which provides at least such coverage as is required
hereunder.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 9.14 shall survive the execution and delivery of
this Agreement. The Master Servicer shall indemnify the Depositor and the
Trustee and hold them harmless against any loss, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in Section 9.14(a). It is understood
and agreed that the enforcement of the obligation of the Master Servicer set
forth in this Section to indemnify the Depositor and the Trustee as provided
in this Section constitutes the sole remedy (other than as set forth in
Section 6.14) of the Depositor and the Trustee, respecting a breach of the
foregoing representations and warranties. Such indemnification shall survive
any termination of the Master Servicer as Master Servicer hereunder, and any
termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising
out of the breach of any representations and warranties made in this Section
shall accrue upon discovery of such breach by either the Depositor, the Master
Servicer or the Trustee or notice thereof by any one of such parties to the
other parties.
(c) It is understood and agreed that the representations and warranties
of the Depositor set forth in Sections 2.03(a) through (f) shall survive the
execution and delivery of this Agreement. The Depositor shall indemnify the
Master Servicer and hold it harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs
and expenses resulting from any claim, demand, defense or assertion based on
or grounded upon, or resulting from, a breach of the Depositor's
representations and warranties contained in Sections 2.03(a) through (f)
hereof. It is understood and agreed that the enforcement of the obligation of
the Depositor set forth in this Section to indemnify the Master Servicer as
provided in this Section constitutes the sole remedy of the Master Servicer
respecting a breach by the Depositor of the representations and warranties in
Sections 2.03(a) through (f) hereof.
Any cause of action against the Depositor relating to or arising out of
the breach of the representations and warranties made in Sections 2.03(a)
through (f) hereof shall accrue upon discovery of such breach by either the
Depositor or the Master Servicer or notice thereof by any one of such parties
to the other parties.
Section 9.15. Closing Certificate and Opinion. On or before the Closing
-------------------------------
Date, the Master Servicer shall cause to be delivered to the Depositor, Xxxxxx
Brothers Inc. and the Trustee an Opinion of Counsel, dated the Closing Date,
in form and substance reasonably satisfactory to the Depositor and Xxxxxx
Brothers Inc., as to the due authorization, execution and delivery of this
Agreement by the Master Servicer and the enforceability thereof.
Section 9.16. Standard Hazard and Flood Insurance Policies. For each
--------------------------------------------
Mortgage Loan, the Master Servicer shall maintain or cause to be maintained
standard fire and casualty insurance and, where applicable, flood insurance,
all in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable. It is understood and agreed that such
insurance shall be with insurers meeting the eligibility requirements set
forth in the applicable Servicing Agreement and that no earthquake or other
additional insurance is to be required of any Mortgagor or to be maintained on
property acquired in respect of a defaulted loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.
Pursuant to Section 4.01, any amounts collected by the Master Servicer,
or by any Servicer, under any insurance policies maintained pursuant to this
Section 9.16 (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or released to the Mortgagor in
accordance with the applicable Servicing Agreement) shall be deposited into
the Collection Account, subject to withdrawal pursuant to Section 4.02. Any
cost incurred by the Master Servicer or any Servicer in maintaining any such
insurance if the Mortgagor defaults in its obligation to do so shall be added
to the amount owing under the Mortgage Loan where the terms of the Mortgage
Loan so permit; PROVIDED, HOWEVER, that the addition of any such cost shall
not be taken into account for purposes of calculating the distributions to be
made to Certificateholders and shall be recoverable by the Master Servicer or
such Servicer pursuant to Section 4.02(v).
Section 9.17. Presentment of Claims and Collection of Proceeds. The
------------------------------------------------
Master Servicer shall, or shall cause each Servicer (to the extent provided in
the applicable Servicing Agreement) to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under the Insurance Policies
with respect to the Mortgage Loans, and take such actions (including the
negotiation, settlement, compromise or enforcement of the insured's claim) as
shall be necessary to realize recovery under such policies. Any proceeds
disbursed to the Master Servicer (or disbursed to a Servicer and remitted to
the Master Servicer) in respect of such policies or bonds shall be promptly
deposited in the Collection Account upon receipt, except that any amounts
realized that are to be applied to the repair or restoration of the related
Mortgaged Property as a condition requisite to the presentation of claims on
the related Mortgage Loan to the insurer under any applicable Insurance Policy
need not be so deposited (or remitted).
Section 9.18. Maintenance of the Primary Mortgage Insurance Policies. (a)
------------------------------------------------------
The Master Servicer shall not take, or permit any Servicer (consistent with
the applicable Servicing Agreement) to take, any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of such Master Servicer or Servicer, would have
been covered thereunder. The Master Servicer shall use its best reasonable
efforts to keep in force and effect, or to cause each Servicer to keep in
force and effect (to the extent that the Mortgage Loan requires the Mortgagor
to maintain such insurance), primary mortgage insurance applicable to each
Mortgage Loan in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable. The Master Servicer shall not, and
shall not permit any Servicer to, cancel or refuse to renew any such Primary
Mortgage Insurance Policy that is in effect at the date of the initial
issuance of the Certificates and is required to be kept in force hereunder
except in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to present, or to cause each Servicer to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or any
Servicer under any Primary Mortgage Insurance Policies shall be deposited in
the Collection Account, subject to withdrawal pursuant to Section 4.02.
Section 9.19. Trustee To Retain Possession of Certain Insurance Policies
----------------------------------------------------------
and Documents. The Trustee (or its custodian, if any, as directed by the
-------------
Trustee), shall retain possession and custody of the originals of the Primary
Mortgage Insurance Policies or certificate of insurance if applicable and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect
of the Certificates have been distributed in full and the Master Servicer
otherwise has fulfilled its obligations under this Agreement, the Trustee (or
its custodian, if any, as directed by the Trustee) shall also retain
possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee (or its custodian, if any, as
directed by the Trustee), upon the execution or receipt thereof the originals
of the Primary Mortgage Insurance Policies and any certificates of renewal
thereof, and such other documents or instruments that constitute portions of
the Mortgage File that come into the possession of the Master Servicer from
time to time.
Section 9.20. Realization Upon Defaulted Mortgage Loans. Subject to the
-----------------------------------------
provisions of the Special Servicing Agreement, the Master Servicer shall use
its reasonable best efforts to, or to cause the Special Servicer to, foreclose
upon, repossess 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, all in accordance with the applicable
Servicing Agreement.
Section 9.21. Compensation to the Master Servicer. The Master Servicer
-----------------------------------
shall (i) be entitled, at its election, either (a) to pay itself the Master
Servicing Fee, as reduced pursuant to Section 5.05, in respect of the Mortgage
Loans out of any Mortgagor payment on account of interest prior to the deposit
of such payment in the Collection Account it maintains or (b) to withdraw from
the Collection Account, subject to Section 5.05, the Master Servicing Fee to
the extent permitted by Section 4.02(iv). The Master Servicer shall also be
entitled, at its election, either (a) to pay itself the Master Servicing Fee
in respect of each delinquent Mortgage Loan master serviced by it out of
Liquidation Proceeds in respect of such Mortgage Loan or other recoveries with
respect thereto to the extent permitted in Section 4.02 or (b) to withdraw
from the Collection Account it maintains the Master Servicing Fee in respect
of each Liquidated Mortgage Loan to the extent of such Liquidation Proceeds or
other recoveries, to the extent permitted by Section 4.02. Servicing
compensation in the form of assumption fees, if any, late payment charges, as
collected, if any, or otherwise (but not including any prepayment premium or
penalty) shall be retained by the Master Servicer (or the applicable Servicer)
and shall not be deposited in the Collection Account. If the Master Servicer
does not retain or withdraw the Master Servicing Fee from the Collection
Account as provided herein, the Master Servicer shall be entitled to direct
the Trustee to pay the Master Servicing Fee to such Master Servicer by
withdrawal from the Certificate Account to the extent that payments have been
received with respect to the applicable Mortgage Loan. The Master Servicer
shall be required to pay all expenses incurred by it in connection with its
activities hereunder and shall not be entitled to reimbursement therefor
except as provided in this Agreement. Pursuant to Section 4.01(e), all income
and gain realized from any investment of funds in the Collection Account shall
be for the benefit of the Master Servicer as additional compensation. The
provisions of this Section 9.21 are subject to the provisions of Section
6.14(b).
Section 9.22. REO Property. (a) In the event the Trust Fund acquires
------------
ownership of any REO Property in respect of any Mortgage Loan, the deed or
certificate of sale shall be issued to the Trustee, or to its nominee, on
behalf of the Certificateholders. Subject to the provisions of the Special
Servicing Agreement, the Master Servicer shall use its reasonable best efforts
to sell, or, to the extent provided in the applicable Servicing Agreement,
cause the Special Servicer to sell, any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement and the
related Servicing Agreement, as applicable, but in all events within the time
period, and subject to the conditions set forth in Article X hereof. Pursuant
to its efforts to sell such REO Property, the Master Servicer shall protect
and conserve, or cause the Special Servicer to protect and conserve, such REO
Property in the manner and to such extent required by the applicable Servicing
Agreement, subject to Article X hereof.
(b) The Master Servicer shall deposit or cause to be deposited all funds
collected and received in connection with the operation of any REO Property in
the Collection Account it maintains.
(c) The Master Servicer and the applicable Servicer, upon the final
disposition of any REO Property, shall be entitled to reimbursement for any
related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Master Servicing Fees or Servicing Fees from Liquidation Proceeds
received in connection with the final disposition of such REO Property;
provided, that any such unreimbursed Advances as well as any unpaid Master
Servicing Fees or Servicing Fees may be reimbursed or paid, as the case may
be, prior to final disposition, out of any net rental income or other net
amounts derived from such REO Property.
(d) The Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the applicable
Servicer as provided above and in the Special Servicing Agreement, shall be
deposited in the Collection Account on or prior to the Determination Date in
the month following receipt thereof (and the Master Servicer shall provide
prompt written notice to the Trustee upon such deposit) and be remitted by
wire transfer in immediately available funds to the Trustee for deposit into
the Certificate Account on the next succeeding Deposit Date.
Section 9.23. Preparation of Tax Returns and Other Reports. (a) The
--------------------------------------------
Master Servicer shall prepare or cause to be prepared on behalf of the Trust
Fund, based upon information calculated in accordance with this Agreement
pursuant to instructions given by the Depositor, and the Trustee shall file,
federal tax returns and appropriate state income tax returns and such other
returns as may be required by applicable law relating to the Trust Fund, and the
Trustee shall forward copies to the Depositor of all such returns and Form 1099
information and such other information within the control of the Trustee as the
Depositor may reasonably request in writing, and shall forward to each
Certificateholder such forms and furnish such information within the control of
the Trustee as are required by the Code and the REMIC Provisions to be furnished
to them, and the Master Servicer or the Trustee will prepare, to the extent that
they are familiar with applicable state requirements, and the Trustee will file,
annual reports (other than tax returns), if any, required by applicable state
authorities, will file copies of this Agreement with the appropriate state
authorities as may be required by applicable law, and will prepare and
disseminate to Certificateholders Form 1099 (or otherwise furnish information
within the control of the Trustee) to the extent required by applicable law. The
Master Servicer will indemnify the Trustee for any liability of or assessment
against the Trustee resulting from any error in any of such tax or information
returns resulting from errors in the information provided by such Master
Servicer (other than any such information that is derived solely from
information provided by a Servicer).
(b) The Master Servicer shall prepare and file with the Internal Revenue
Service ("IRS"), on behalf of the Trust Fund, an application on IRS Form SS-4.
The Master Servicer, upon receipt from the IRS of the Notice of Taxpayer
Identification Number Assigned, shall promptly forward a copy of such notice
to the Trustee and the Depositor.
(c) The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K and thereafter the Master Servicer will prepare or
cause to be prepared Form 10-Ks and Form 10-Qs (if necessary), or monthly
current reports on Form 8-K, on behalf of the Trust Fund, as may be required
by applicable law, for filing with the Securities and Exchange Commission (the
"SEC"). The Trustee will sign each such report on behalf of the Trust Fund.
The Master Servicer will forward a copy of each such report to the Depositor
promptly after such report has been filed with the SEC. The Master Servicer
agrees to use its best efforts to seek to terminate such filing obligation
promptly after the period during which such filings are required under the
Securities Exchange Act of 1934. Promptly after filing a Form 15 or other
applicable form with the SEC in connection with such termination, the Master
Servicer shall deliver to the Depositor a copy of such form together with
copies of confirmations of receipt by the SEC of each report filed therewith
on behalf of the Trust Fund.
Section 9.24. Reports to the Trustee. (a) Not later than 30 days after
----------------------
each Distribution Date, the Master Servicer shall forward to the Trustee a
statement, deemed to have been certified by a Servicing Officer, setting forth
the status of the Collection Account maintained by the Master Servicer as of
the close of business on the related Distribution Date, indicating that all
distributions required by this Agreement to be made by the Master Servicer
have been made (or if any required distribution has not been made by the
Master Servicer, specifying the nature and status thereof) and showing, for
the period covered by such statement, the aggregate of deposits into and
withdrawals from the Collection Account maintained by the Master Servicer.
Copies of such statement shall be provided by the Master Servicer to the
Depositor, Attention: Contract Finance, and, upon request, to any
Certificateholders (or by the Trustee at the Master Servicer's expense if the
Master Servicer shall fail to provide such copies to the Certificateholders
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement)).
(b) Not later than two Business Days following each Distribution Date,
the Master Servicer shall deliver to the Person designated by the Depositor,
in a format consistent with other electronic loan level reporting supplied by
the Master Servicer in connection with similar transactions, "loan level"
information with respect to the Mortgage Loans as of the related Determination
Date, to the extent that such information has been provided to the Master
Servicer by the Servicers or by the Depositor.
Section 9.25. Annual Officer's Certificate as to Compliance. (a) The
---------------------------------------------
Master Servicer shall deliver to the Trustee and the Rating Agencies on or
before May 31 of each year, commencing on May 31, 1999, an Officer's
Certificate, certifying that with respect to the period ending on the
immediately preceding December 31: (i) such Servicing Officer has reviewed the
activities of such Master Servicer during the preceding calendar year or
portion thereof and its performance under this Agreement, (ii) to the best of
such Servicing Officer's knowledge, based on such review, such Master Servicer
has performed and fulfilled its duties, responsibilities and obligations under
this Agreement in all material respects throughout such year, or, if there has
been a default in the fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, (iii) nothing has come to the attention of such
Servicing Officer to lead such Servicing Officer to believe that any Servicer
has failed to perform any of its duties, responsibilities and obligations
under its Servicing Agreement in all material respects throughout such year,
or, if there has been a material default in the performance or fulfillment of
any such duties, responsibilities or obligations, specifying each such default
known to such Servicing Officer and the nature and status thereof, and (iv)
the Master Servicer has received from each Servicer such Servicer's annual
certificate of compliance and a copy of such Servicer's annual audit report,
in each case to the extent required under the applicable Servicing Agreement,
or, if any such certificate or report has not been received by the Master
Servicer, the Master Servicer is using its best reasonable efforts to obtain
such certificate or report.
(b) Copies of such statements shall be provided to any Certificateholder
upon request, by the Master Servicer or by the Trustee at the Master
Servicer's expense if the Master Servicer failed to provide such copies
(unless (i) the Master Servicer shall have failed to provide the Trustee with
such statement or (ii) the Trustee shall be unaware of the Master Servicer's
failure to provide such statement).
Section 9.26. Annual Independent Accountants' Servicing Report. If the
------------------------------------------------
Master Servicer has, during the course of any fiscal year, directly serviced
any of the Mortgage Loans, then the Master Servicer at its expense shall cause
a nationally recognized firm of independent certified public accountants to
furnish a statement to the Trustee, the Rating Agencies and the Depositor on
or before May 31 of each year, commencing on May 31, 1999 to the effect that,
with respect to the most recently ended fiscal year, such firm has examined
certain records and documents relating to the Master Servicer's performance of
its servicing obligations under this Agreement and pooling and servicing and
trust agreements in material respects similar to this Agreement and to each
other and that, on the basis of such examination conducted substantially in
compliance with the audit program for mortgages serviced for FHLMC or the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Master Servicer's activities have been conducted in
compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by
FHLMC requires it to report. Copies of such statements shall be provided to
any Certificateholder upon request by the Master Servicer, or by the Trustee
at the expense of the Master Servicer if the Master Servicer shall fail to
provide such copies. If such report discloses exceptions that are material,
the Master Servicer shall advise the Trustee whether such exceptions have been
or are susceptible of cure, and will take prompt action to do so.
Section 9.27. Merger or Consolidation. Any Person into which the Master
-----------------------
Servicer may be merged or consolidated, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
PROVIDED, HOWEVER, that the successor or resulting Person to the Master
Servicer shall be a Person that shall be qualified and approved to service
mortgage loans for FNMA or FHLMC and shall have a net worth of not less than
$15,000,000.
Section 9.28. Resignation of Master Servicer. Except as otherwise
------------------------------
provided in Sections 9.27 and 9.29 hereof, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it unless it or the
Trustee determines that the Master Servicer's duties hereunder are no longer
permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be cured.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel that shall be Independent to such effect
delivered to the Trustee. No such resignation shall become effective until the
Trustee shall have assumed, or a successor master servicer shall have been
appointed by the Trustee and until such successor shall have assumed, the
Master Servicer's responsibilities and obligations under this Agreement.
Notice of such resignation shall be given promptly by the Master Servicer to
the Depositor.
Section 9.29. Assignment or Delegation of Duties by the Master Servicer.
---------------------------------------------------------
Except as expressly provided herein, the Master Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed
by the Master Servicer hereunder; PROVIDED, HOWEVER, that the Master Servicer
shall have the right without the prior written consent of the Trustee, the
Depositor or the Rating Agencies to delegate or assign to or subcontract with
or authorize or appoint an Affiliate of the Master Servicer to perform and
carry out any duties, covenants or obligations to be performed and carried out
by the Master Servicer hereunder. In no case, however, shall any such
delegation, subcontracting or assignment to an Affiliate of the Master
Servicer relieve the Master Servicer of any liability hereunder. Notice of
such permitted assignment shall be given promptly by the Master Servicer to
the Depositor and the Trustee. If, pursuant to any provision hereof, the
duties of the Master Servicer are transferred to a successor master servicer,
the entire amount of the Master Servicing Fees and other compensation payable
to the Master Servicer pursuant hereto, including amounts payable to or
permitted to be retained or withdrawn by the Master Servicer pursuant to
Section 9.21 hereof, shall thereafter be payable to such successor master
servicer.
Section 9.30. Limitation on Liability of the Master Servicer and Others.
---------------------------------------------------------
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Trustee or
the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the Master
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement. The Master Servicer and any
director, officer, employee or agent of the Master Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted
by any Person respecting any matters arising hereunder. The Master Servicer
shall be under no obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties to master service the Mortgage
Loans in accordance with this Agreement and that in its opinion may involve it
in any expenses or liability; PROVIDED, HOWEVER, that the Master Servicer may
in its sole discretion undertake any such action that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund and the
Master Servicer shall be entitled to be reimbursed therefor out of the
Collection Account it maintains as provided by Section 4.02.
The Master Servicer shall not be liable for any acts or omissions of any
Servicer. In particular, the Master Servicer shall not be liable for any
servicing errors or interruptions resulting from any failure of any Servicer
to maintain computer and other information systems that are year-2000
compliant.
Section 9.31. Indemnification; Third-Party Claims. The Master Servicer
-----------------------------------
agrees to indemnify the Depositor and the Trustee, and hold them harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liability, fees and
expenses that the Depositor and the Trustee may sustain as a result of the
failure of the Master Servicer to perform its duties and master service the
Mortgage Loans in compliance with the terms of this Agreement. The Depositor
and the Trustee shall immediately notify the Master Servicer if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans
entitling the Depositor or the Trustee to indemnification hereunder, whereupon
the Master Servicer shall assume the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it
or them in respect of such claim.
Section 9.32. Alternative Index. In the event that the Index for any
-----------------
Mortgage Loan, as specified in the related Mortgage Note, becomes unavailable
for any reason, the Master Servicer shall select an alternative index, which
in all cases shall be an index that constitutes a qualified rate on a regular
interest under the REMIC Provisions, in accordance with the terms of such
Mortgage Note or, if such Mortgage Note does not make provision for the
selection of an alternative index in such event, the Master Servicer shall,
subject to applicable law, select an alternative index based on information
comparable to that used in connection with the original Index and, in either
case, such alternative index shall thereafter be the Index for such Mortgage
Loan.
ARTICLE X
REMIC ADMINISTRATION
Section 10.01. REMIC Administration. (a) REMIC elections as set forth in
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the Preliminary Statement shall be made by the Trustee on Forms 1066 or other
appropriate federal tax or information return for the taxable year ending on
the last day of the calendar year in which the Certificates are issued. The
regular interests and residual interest in each REMIC shall be as designated
in the Preliminary Statement.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of section 86OG(a)(9) of the Code.
(c) The Master Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial
proceedings with respect to such REMIC that involve the Internal Revenue
Service or state tax authorities, but only to the extent that (i) such
expenses are ordinary or routine expenses, including expenses of a routine
audit but not expenses of litigation (except as described in (ii)); or (ii)
such expenses or liabilities (including taxes and penalties) are attributable
to the negligence or willful misconduct of the Master Servicer in fulfilling
its duties hereunder (including its duties as tax return preparer). The Master
Servicer shall be entitled to reimbursement of expenses to the extent provided
in clause (i) above from the Collection Account.
(d) The Master Servicer shall prepare, and the Trustee shall sign and
file, all of each REMIC's federal and state tax and information returns as
such REMIC's direct representative. The expenses of preparing and filing such
returns shall be borne by the Master Servicer.
(e) The Master Servicer shall act as Tax Matters Person for each REMIC.
The Master Servicer or its designee shall perform on behalf of each REMIC all
reporting and other tax compliance duties that are the responsibility of such
REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, if required by the Code, the REMIC Provisions, or
other such guidance, the Master Servicer shall provide (i) to the Treasury or
other governmental authority such information as is necessary for the
application of any tax relating to the transfer of a Residual Certificate to
any disqualified person or organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions.
(f) The Trustee, the Master Servicer and the Holders of Certificates
shall take any action or cause the REMIC to take any action necessary to
create or maintain the status of such REMIC as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain such
status. Neither the Trustee, the Master Servicer nor the Holder of any
Residual Certificate shall take any action, cause the REMIC to take any action
or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of such REMIC as a REMIC or (ii) result in the imposition
of a tax upon such REMIC (including but not limited to the tax on prohibited
transactions as defined in Code Section 860F(a)(2) and the tax on prohibited
contributions set forth on Section 860G(d) of the Code) (either such event, an
"Adverse REMIC Event") unless the Trustee and the Master Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger such
status or result in the imposition of such a tax. In addition, prior to taking
any action with respect to the REMIC or the assets therein, or causing such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, any Holder of a Residual Certificate will consult with the
Trustee and the Master Servicer, or their respective designees, in writing,
with respect to whether such action could cause an Adverse REMIC Event to
occur with respect to such REMIC, and no such Person shall take any such
action or cause such REMIC to take any such action as to which the Trustee or
the Master Servicer has advised it in writing that an Adverse REMIC Event
could occur.
(g) Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on the related REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in such REMIC or, if no such amounts are available, out
of other amounts held in the Collection Account, and shall reduce amounts
otherwise payable to holders of regular interests in such REMIC, as the case
may be.
(h) The Master Servicer shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in this Agreement with respect to eligible
substitute mortgage loans.
(j) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15 of each calendar year beginning in 1999, the
Master Servicer shall deliver to the Trustee and each Rating Agency an
Officer's Certificate stating the Master Servicer's compliance with the
provisions of this Section 10.01.
(l) The Trustee shall treat each of the four Basis Risk Reserve Funds as
an outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Holder of the Class X Certificate related to
the Mortgage Pool in connection with which such Basis Risk Reserve Fund was
established and that is not an asset of the REMIC. The Trustee shall treat the
rights of the Class X-0, Xxxxx X-0, Class A-3, Class M-1, Class M-2, and Class
B Certificateholders to receive payments from any Basis Risk Reserve Fund in
the event of a Basis Risk Shortfall as rights in an interest rate cap contract
written by the related Class X Certificateholder in favor of the Class A-1,
Class X-0, Xxxxx X-0, Class M-1, Class M-2, and Class B Certificateholders.
Thus, each Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, and Class B
Certificate shall be treated as representing not only ownership of regular
interests in REMIC 4, but also ownership of an interest in four discrete
interest rate cap contracts. For purposes of determining the issue prices of
the REMIC 4 regular interests, the Trustee shall assume that the interest rate
cap contracts have only a nominal value.
Section 10.02. Prohibited Transactions and Activities. Neither the
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Depositor, the Master Servicer nor the Trustee shall sell, dispose of, or
substitute for any of the Mortgage Loans, except in a disposition pursuant to
(i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the Trust Fund,
(iii) the termination of each REMIC pursuant to Article VII of this Agreement,
(iv) a substitution pursuant to Article II of this Agreement or (v) a
repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for any REMIC, nor sell or dispose of any investments in
the Certificate Account for gain, nor accept any contributions to the REMIC
after the Closing Date, unless it has received an Opinion of Counsel (at the
expense of the party causing such sale, disposition, or substitution) that
such disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of such REMIC as a REMIC or of the interests therein
other than the Residual Certificates as the regular interests therein, (b)
affect the distribution of interest or principal on the Certificates, (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Fund (except pursuant to the provisions of this Agreement) or (d) cause such
REMIC to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 10.03. Indemnification with Respect to Certain Taxes and Loss of
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REMIC Status. (a) In the event that any REMIC fails to qualify as a REMIC,
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loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Master Servicer of its
duties and obligations set forth herein, the Master Servicer shall indemnify
the Holder of the related Residual Certificate against any and all losses,
claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; PROVIDED, HOWEVER, that the Master Servicer shall not be liable
for any such Losses attributable to the action or inaction of the Trustee, the
Depositor, the Class X Certificateholder or the Holder of such Residual
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Certificate on which
the Master Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Residual Certificate
now or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Master Servicer have any liability (1) for any
action or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent
performance by the Master Servicer of its duties and obligations set forth
herein, and (3) for any special or consequential damages to Certificateholders
(in addition to payment of principal and interest on the Certificates).
(b) If the Internal Revenue Service determines that one of the REMICs
established hereunder recognized income from a prohibited transaction within
the meaning of Section 860F(a)(2) of the Code as a result of the lapse of the
Class X Certificateholder's right to effect a Special Termination of the Trust
Fund by purchasing the assets of the Trust Fund, then Xxxxxx Capital shall
indemnify the Trust Fund for any such tax.
Section 10.04. REO Property. (a) Notwithstanding any other provision of
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this Agreement, the Master Servicer, acting on behalf of the Trustee
hereunder, shall not, and shall, to the extent provided in the applicable
Servicing Agreement, not permit any Servicer to, rent, lease, or otherwise
earn income on behalf of any REMIC with respect to any REO Property which
might cause such REO Property to fail to qualify as "foreclosure" property
within the meaning of section 860G(a)(8) of the Code or result in the receipt
by any REMIC of any "income from non-permitted assets" within the meaning of
section 860F(a)(2) of the Code or any "net income from foreclosure property"
which is subject to tax under the REMIC Provisions unless the Master Servicer
has advised, or has caused the applicable Servicer to advise, the Trustee in
writing to the effect that, under the REMIC Provisions, such action would not
adversely affect the status of the REMIC as a REMIC and any income generated
for such REMIC by the REO Property would not result in the imposition of a tax
upon such REMIC.
(b) The Master Servicer shall make, or shall cause the Special Servicer
to make, reasonable efforts to sell any REO Property for its fair market
value. In any event, however, the Master Servicer shall, or shall cause the
Special Servicer to, dispose of any REO Property within three years of its
acquisition by the Trust Fund unless the Trustee has received a grant of
extension from the Internal Revenue Service to the effect that, under the
REMIC Provisions and any relevant proposed legislation and under applicable
state law, the REMIC may hold REO Property for a longer period without
adversely affecting the REMIC status of such REMIC or causing the imposition
of a Federal or state tax upon such REMIC. If the Trustee has received such an
extension, then the Trustee, or the Master Servicer, acting on its behalf
hereunder, shall, or shall cause the Special Servicer to, continue to attempt
to sell the REO Property for its fair market value for such period longer than
three years as such extension permits (the "Extended Period"). If the Trustee
has not received such an extension and the Trustee, or the Master Servicer
acting on behalf of the Trustee hereunder, or the Special Servicer is unable
to sell the REO Property within 33 months after its acquisition by the Trust
Fund or if the Trustee has received such an extension, and the Trustee, or the
Master Servicer acting on behalf of the Trustee hereunder, is unable to sell
the REO Property within the period ending three months before the close of the
Extended Period, the Master Servicer shall, or shall cause the Special
Servicer to, before the end of the three year period or the Extended Period,
as applicable, (i) purchase such REO Property at a price equal to the REO
Property's fair market value or (ii) auction the REO Property to the highest
bidder (which may be the Master Servicer or the Special Servicer) in an
auction reasonably designed to produce a fair price prior to the expiration of
the three-year period or the Extended Period, as the case may be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Binding Nature of Agreement; Assignment. This Agreement
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shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 11.02. Entire Agreement. This Agreement contains the entire
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agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject matter
hereof. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms
hereof.
Section 11.03. Amendment. (a) This Agreement may be amended from time to
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time by the Depositor, the Master Servicer and the Trustee, without notice to
or the consent of any of the Holders, (i) to cure any ambiguity, (ii) to cause
the provisions herein to conform to or be consistent with or in furtherance of
the statements made with respect to the Certificates, the Trust Fund or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein, (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or (iv) to add, delete, or amend any provisions to the extent
necessary or desirable to comply with any requirements imposed by the Code and
the REMIC Provisions. No such amendment effected pursuant to the preceding
sentence shall, as evidenced by an Opinion of Counsel, adversely affect the
status of any REMIC created pursuant to this Agreement, nor shall such
amendment effected pursuant to clause (iii) of such sentence adversely affect
in any material respect the interests of any Holder. Prior to entering into
any amendment without the consent of Holders pursuant to this paragraph, the
Trustee may require an Opinion of Counsel (at the expense of the party
requesting such amendment) to the effect that such amendment is permitted
under this paragraph. Any such amendment shall be deemed not to adversely
affect in any material respect any Holder, if the Trustee receives written
confirmation from each Rating Agency that such amendment will not cause such
Rating Agency to reduce the then current rating assigned to the Certificates
(and any Opinion of Counsel requested by the Trustee in connection with any
such amendment may rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor, the Master Servicer and the Trustee with the consent of the Holders
of not less than 66-2/3% of the Class Certificate Principal Amount (or
Percentage Interest) of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders; PROVIDED, HOWEVER, that no such amendment shall be made
unless the Trustee receives an Opinion of Counsel, at the expense of the party
requesting the change, that such change will not adversely affect the status
of any REMIC as a REMIC or cause a tax to be imposed on such REMIC; and
provided further, that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which
are required to be distributed on any Certificate, without the consent of the
Holder of such Certificate or (ii) reduce the aforesaid percentages of Class
Certificate Principal Amount (or Percentage Interest) of Certificates of each
Class, the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of the Class Certificate Principal
Amount (or Percentage Interest) of each Class of Certificates affected
thereby. For purposes of this paragraph, references to "Holder" or "Holders"
shall be deemed to include, in the case of any Class of Book-Entry
Certificates, the related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations
as the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing Agreement,
the Trustee shall not consent to any amendment of any Servicing Agreement
except pursuant to the standards provided in this Section with respect to
amendment of this Agreement.
Section 11.04. Voting Rights. Except to the extent that the consent of
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all affected Certificateholders is required pursuant to this Agreement, with
respect to any provision of this Agreement requiring the consent of
Certificateholders representing specified percentages of aggregate outstanding
Certificate Principal Amount (or Percentage Interest), Certificates owned by
the Depositor, the Master Servicer, the Trustee or any Servicer or Affiliates
thereof are not to be counted so long as such Certificates are owned by the
Depositor, the Master Servicer, the Trustee or any Servicer or any Affiliate
thereof.
Section 11.05. Provision of Information. (a) For so long as any of the
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Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, each of the Depositor and the Trustee
agree to cooperate with each other to provide to any Certificateholders and to
any prospective purchaser of Certificates designated by such
Certificateholder, upon the request of such Certificateholder or prospective
purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act. Any reasonable, out-of-pocket expenses incurred by the Trustee
in providing such information shall be reimbursed by the Depositor.
(b) The Trustee will provide to any person to whom a Prospectus was
delivered, upon the request of such person specifying the document or
documents requested, (i) a copy (excluding exhibits) of any report on Form 8-K
or Form 10-K filed with the Securities and Exchange Commission pursuant to
Section 9.23(c) and (ii) a copy of any other document incorporated by
reference in the Prospectus. Any reasonable out-of-pocket expenses incurred by
the Trustee in providing copies of such documents shall be reimbursed by the
Depositor.
(c) On each Distribution Date, the Trustee shall deliver or cause to be
delivered by first class mail to the Depositor, Attention: Contract Finance, a
copy of the report delivered to Certificateholders pursuant to Section 4.03.
Section 11.06. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 11.07. Notices. All demands, notices and communications hereunder
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shall be in writing and shall be deemed to have been duly given when received
by (a) in the case of the Depositor, Structured Asset Securities Corporation,
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxx,
(b) in the case of the Trustee, The Chase Manhattan Bank, 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Structured Finance Services,
and (c) in the case of the Master Servicer, Norwest Bank Minnesota, National
Association, 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxx 00000; Attention:
Master Servicing, or as to each party such other address as may hereafter be
furnished by such party to the other parties in writing. Any notice required
or permitted to be mailed to a Holder shall be given by first class mail,
postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice.
Section 11.08. Severability of Provisions. If any one or more of the
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covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 11.09. Indulgences; No Waivers. Neither the failure nor any delay
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on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other
or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
Section 11.10. Headings Not To Affect Interpretation. The headings
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contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement. Nothing in this Agreement or in the
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Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of
the Certificates, any benefit or any legal or equitable right, power, remedy
or claim under this Agreement, except to the extent specified in Section
11.14.
Section 11.12. Special Notices to the Rating Agencies. (a) The Depositor
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shall give prompt notice to the Rating Agencies of the occurrence of any of
the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) any Assignment by the Master Servicer of its rights hereunder
or delegation of its duties hereunder;
(iii) the occurrence of any Event of Default described in Section
6.14;
(iv) any notice of termination given to the Master Servicer pursuant
to Section 6.14 and any resignation of the Master Servicer hereunder;
(v) the appointment of any successor to any Master Servicer pursuant
to Section 6.14; and
(vi) the making of a final payment pursuant to Section 7.02. (vii)
any termination of the rights and obligations of any Servicer under the
applicable Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section shall be
in writing and sent by first class mail, telecopy or overnight courier, as
follows:
If to DCR, to:
Duff & Xxxxxx Credit Rating Co.
00 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
If to Fitch, to:
Fitch IBCA, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Residential Mortgage Surveillance
If to S&P, to:
Standard & Poor's Rating Services
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
(c) The Trustee shall deliver to the Rating Agencies reports prepared
pursuant to Section 4.03.
Section 11.13. Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
Section 11.14. Transfer of Servicing. Xxxxxx Capital agrees that it shall
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provide written notice to the Trustee and the Master Servicer thirty days
prior to any transfer or assignment by Xxxxxx Capital of its rights under any
Servicing Agreement or of the servicing thereunder or delegation of its rights
or duties thereunder or any portion thereof to any Person other than the
initial Servicer under such Servicing Agreement. In addition, the ability of
Xxxxxx Capital to transfer or assign its rights and delegate its duties under
any Servicing Agreement or to transfer the servicing thereunder to a successor
servicer shall be subject to the following conditions:
(i) Such successor servicer must be qualified to service loans for
FNMA or FHLMC;
(ii) Such successor servicer must satisfy the seller/servicer
eligibility standards in the applicable Servicing Agreement, exclusive of
any experience in mortgage loan origination, and must be reasonably
acceptable to the Master Servicer, whose approval shall not be
unreasonably withheld;
(iii) Such successor servicer must execute and deliver to the
Trustee and the Master Servicer an agreement, in form and substance
reasonably satisfactory to the Trustee and the Master Servicer, that
contains an assumption by such successor servicer of the due and punctual
performance and observance of each covenant and condition to be performed
and observed by the Servicer under the applicable Servicing Agreement;
(iv) There must be delivered to the Trustee a letter from each
Rating Agency to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates;
(v) Xxxxxx Capital shall, at its cost and expense, take such steps,
or cause the terminated Servicer to take such steps, as may be necessary
or appropriate to effectuate and evidence the transfer of the servicing
of the Mortgage Loans to such successor servicer, including, but not
limited to, the following: (A) to the extent required by the terms of the
Mortgage Loans and by applicable federal and state laws and regulations,
Xxxxxx Capital shall cause the prior Servicer to timely mail to each
obligor under a Mortgage Loan any required notices or disclosures
describing the transfer of servicing of the Mortgage Loans to the
successor servicer; (B) prior to the effective date of such transfer of
servicing, Xxxxxx Capital shall cause the prior Servicer to transmit to
any related insurer notification of such transfer of servicing; (C) on or
prior to the effective date of such transfer of servicing, Xxxxxx Capital
shall cause the prior Servicer to deliver to the successor servicer all
Mortgage Loan Documents and any related records or materials; (D) on or
prior to the effective date of such transfer of servicing, Xxxxxx Capital
shall cause the prior Servicer to transfer to the successor servicer, or,
if such transfer occurs after a Remittance Date but before the next
succeeding Deposit Date, to the Master Servicer, all funds held by the
Servicer in respect of the Mortgage Loans; (E) on or prior to the
effective date of such transfer of servicing, Xxxxxx Capital shall cause
the prior Servicer to, after the effective date of the transfer of
servicing to the successor servicer, continue to forward to such
successor servicer, within one Business Day of receipt, the amount of any
payments or other recoveries received by the prior Servicer, and to
notify the successor servicer of the source and proper application of
each such payment or recovery; and (F) Xxxxxx Capital shall cause the
prior Servicer to, after the effective date of transfer of servicing to
the successor servicer, continue to cooperate with the successor servicer
to facilitate such transfer in such manner and to such extent as the
successor servicer may reasonably request.
IN WITNESS WHEREOF, the Depositor, the Trustee and the Master Servicer
have caused their names to be signed hereto by their respective officers
hereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET SECURITIES
CORPORATION, as Depositor
By:/s/ Xxxxxxx Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: Authorized Signatory
THE CHASE MANHATTAN BANK,
as Trustee
By:/s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Title: Assistant Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Master Servicer
By:/s/ Xxx Xxxx
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Name: Xxx Xxxx
Title: Assistant Vice President
Solely for purposes of Section 11.14,
accepted and agreed to by:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
EXHIBIT A
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FORMS OF CERTIFICATES
EXHIBIT B-1
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FORM OF INITIAL CERTIFICATION
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Date
Structured Asset Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of July 1,
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1998 among Structured Asset Securities Corporation, as
Depositor, The Chase Manhattan Bank, as Trustee, and Norwest
Bank Minnesota, National Association, as Master Servicer, with
respect to Structured Asset Securities Corporation Mortgage
Pass-Through Certificates, Series 1998-8
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Trust Agreement, subject to
review of the contents thereof, the undersigned, as [Custodian on behalf of
the] Trustee, hereby certifies that it (or its custodian) has received the
documents listed in Section 2.01(b) of the Trust Agreement for each Mortgage
File pertaining to each Mortgage Loan listed on Schedule A, to the Trust
Agreement, subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in the Trust
Agreement. This Certificate is subject in all respects to the terms of Section
2.02 of the Trust Agreement and the Trust Agreement sections cross-referenced
therein.
[[Custodian], on behalf of]
THE CHASE MANHATTAN BANK,
as Trustee
By:
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Name:
Title:
EXHIBIT B-2
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FORM OF INTERIM CERTIFICATION
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Date
Structured Asset Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of July 1, 1998
among Structured Asset Securities Corporation, as Depositor, The
Chase Manhattan Bank, as Trustee, and Norwest Bank Minnesota,
National Association, as Master Servicer, with respect to
Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1998-8
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Trust Agreement, the
undersigned, as [Custodian on behalf of the] Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2.01(b) of
the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule
I hereto, it has reviewed the documents identified above and has determined
that each such document appears regular on its face and appears to relate to
the Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement including, but
not limited to, Section 2.02(b).
[[Custodian], on behalf of]
THE CHASE MANHATTAN BANK,
as Trustee
By:
-------------------------------
Name:
Title:
EXHIBIT B-3
-----------
FORM OF FINAL CERTIFICATION
-----------------------------
Date
Structured Asset Securities Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Trust Agreement (the "Trust Agreement"), dated as of July 1, 1998
among Structured Asset Securities Corporation, as Depositor, The
Chase Manhattan Bank, as Trustee, and Norwest Bank Minnesota,
National Association, as Master Servicer, with respect to Structured
Asset Securities Corporation Mortgage Pass-Through Certificates,
Series 1998-8
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Trust Agreement, the
undersigned, as [Custodian on behalf of the] Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on Schedule I hereto) it (or its
custodian) has received the applicable documents listed in Section 2.01(b) of
the Trust Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule
I hereto, it has reviewed the documents listed above and has determined that
each such document appears to be complete and, based on an examination of such
documents, the information set forth in the Mortgage Loan Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Trust Agreement. This Certificate is
qualified in all respects by the terms of said Trust Agreement.
[[Custodian], on behalf of]
THE CHASE MANHATTAN BANK,
as Trustee
By:
--------------------------------
Name:
Title:
EXHIBIT B-4
-----------
FORM OF ENDORSEMENT
Pay to the order of The Chase Manhattan Bank, as trustee (the "Trustee")
under the Trust Agreement dated as of July 1, 1998, among Structured Asset
Securities Corporation, as Depositor, the Trustee and the Master Servicer
relating to Structured Asset Securities Corporation Mortgage Pass-Through
Certificates, Series 1998-8, without recourse.
----------------------------------
[current signatory on note]
By:
-------------------------------
Name:
Title:
EXHIBIT C
---------
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
-----------------------------
Date
[Addressed to Trustee
or, if applicable, custodian]
In connection with the administration of the mortgages held by you as
Trustee under a certain Trust Agreement dated as of July 1, 1998 among
Structured Asset Securities Corporation, as Depositor, Norwest Bank Minnesota,
National Association, as Master Servicer, and you, as Trustee (the "Trust
Agreement"), the undersigned Master Servicer hereby requests a release of the
Mortgage File held by you as Trustee with respect to the following described
Mortgage Loan for the reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
1. Mortgage Loan paid in full. (The Master Servicer hereby certifies
that all amounts received in connection with the loan have been or will be
credited to the Collection Account or the Certificate Account (whichever is
applicable) pursuant to the Trust Agreement.)
2. The Mortgage Loan is being foreclosed.
3. Mortgage Loan substituted. (The Master Servicer hereby certifies
that a Qualifying Substitute Mortgage Loan has been assigned and delivered to
you along with the related Mortgage File pursuant to the Trust Agreement.)
4. Mortgage Loan purchased. (The Master Servicer hereby certifies
that the Purchase Price has been credited to the Collection Account or the
Certificate Account (whichever is applicable) pursuant to the Trust
Agreement.)
5. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Trust Agreement and
will be returned to you within ten (10) days of our receipt of the Mortgage
File, except if the Mortgage Loan has been paid in full, or repurchased or
substituted for a Qualifying Substitute Mortgage Loan (in which case the
Mortgage File will be retained by us permanently) and except if the Mortgage
Loan is being foreclosed (in which case the Mortgage File will be returned
when no longer required by us for such purpose).
Capitalized terms used herein shall have the meanings ascribed to them in
the Trust Agreement.
----------------------------------
[Name of Master Servicer]
By:
-------------------------------
Name:
Title: Servicing Officer
EXHIBIT D-1
-----------
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and
-----------------
says:
1. That he [she] is [title of officer] of [name
------------------------
of Purchaser] (the "Purchaser"), a
-----------------------------------------
[description of type of entity] duly organized and
-----------------------
existing under the laws of the [State of ] [United States], on
----------
behalf of which he [she] makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is not a "disqualified organization" within the
meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code") and will not be a "disqualified organization" as of [date of
transfer], and that the Purchaser is not acquiring a Residual Certificate (as
defined in the Agreement) for the account of, or as agent (including a broker,
nominee, or other middleman) for, any person or entity from which it has not
received an affidavit substantially in the form of this affidavit. For these
purposes, a "disqualified organization" means the United States, any state or
political subdivision thereof, any foreign government, any international
organization, any agency or instrumentality of any of the foregoing (other
than an instrumentality if all of its activities are subject to tax and a
majority of its board of directors is not selected by such governmental
entity), any cooperative organization furnishing electric energy or providing
telephone service to persons in rural areas as described in Code Section
1381(a)(2)(C), or any organization (other than a farmers' cooperative
described in Code Section 521) that is exempt from federal income tax unless
such organization is subject to the tax on unrelated business income imposed
by Code Section 511.
4. That the Purchaser is not, and on [insert date of transfer
----------
of Residual Certificate to Purchaser] will not be, and is not and on such date
will not be investing the assets of, an employee benefit plan subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
plan subject to Code Section 4975 or a person or entity that is using the
assets of any employee benefit plan or other plan to acquire a Residual
Certificate.
5. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among Structured Asset Securities
Corporation, The Chase Manhattan Bank, as Trustee and Norwest Bank Minnesota,
National Association, as Master Servicer, dated as of July 1, 1998, no
transfer of the Residual Certificates shall be permitted to be made to any
person unless the Trustee has received a certificate from such transferee to
the effect that such transferee is not an employee benefit plan subject to
ERISA or a plan subject to Section 4975 of the Code and is not using the
assets of any employee benefit plan or other plan to acquire Residual
Certificates.
6. That the Purchaser does not hold REMIC residual securities as nominee
to facilitate the clearance and settlement of such securities through
electronic book-entry changes in accounts of participating organizations (such
entity, a "Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to such Residual Certificate.
8. That the Purchaser will not transfer a Residual Certificate to any
person or entity (i) as to which the Purchaser has actual knowledge that the
requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof are
not satisfied or that the Purchaser has reason to believe does not satisfy the
requirements set forth in paragraph 7 hereof, and (ii) without obtaining from
the prospective Purchaser an affidavit substantially in this form and
providing to the Trustee a written statement substantially in the form of
Exhibit D-2 to the Agreement.
9. That the Purchaser understands that, as the holder of a Residual
Certificate, the Purchaser may incur tax liabilities in excess of any cash
flows generated by the interest and that it intends to pay taxes associated
with holding such Residual Certificate as they become due.
10. That the Purchaser (i) is not a Non-U.S. Person or (ii) is a Non-U.S.
Person that holds a Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor
and the Trustee with an effective Internal Revenue Service Form 4224 or
successor form at the time and in the manner required by the Code or (iii) is
a Non-U.S. Person that has delivered to both the transferor and the Trustee an
opinion of a nationally recognized tax counsel to the effect that the transfer
of such Residual Certificate to it is in accordance with the requirements of
the Code and the regulations promulgated thereunder and that such transfer of
a Residual Certificate will not be disregarded for federal income tax
purposes. "Non-U.S. Person" means an individual, corporation, partnership or
other person other than a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate
or trust that is subject to U.S. federal income tax regardless of the source
of its income.
11. That the Purchaser agrees to such amendments of the Trust Agreement
as may be required to further effectuate the restrictions on transfer of any
Residual Certificate to such a "disqualified organization," an agent thereof,
a Book-Entry Nominee, or a person that does not satisfy the requirements of
paragraph 7 and paragraph 10 hereof.
12. That the Purchaser consents to the designation of the Master Servicer
as its agent to act as "tax matters person" of the Trust Fund pursuant to the
Trust Agreement.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by
its [title of officer] this day of , 19 .
----- ---------- --
---------------------------------
[name of Purchaser]
By:
------------------------------
Name:
Title:
Personally appeared before me the above-named [name of officer]
, known or proved to me to be the same person who executed the
----------------
foregoing instrument and to be the [title of officer] of the
-----------------
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this day of , 19 .
----- ---------- --
NOTARY PUBLIC
------------------------------
COUNTY OF
--------------------
STATE OF
---------------------
My commission expires the day of , 19 .
----- ---------- --
EXHIBIT D-2
-----------
RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
----------------------------
Date
Re: Structured Asset Securities Corporation
Mortgage Pass-Through Certificates
---------------------------------------
(the "Transferor") has reviewed the attached
-----------------------
affidavit of (the "Transferee"), and has no
-----------------------------
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to a Residual Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
-------------------------------
Name:
Title:
EXHIBIT E
---------
SERVICING AGREEMENTS
EXHIBIT F
---------
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: Structured Asset Securities Corporation
Mortgage Pass-Through Certificates
Series 1998-8
---------------------------------------
Reference is hereby made to the Trust Agreement dated as of July 1, 1998
(the "Trust Agreement") among Structured Asset Securities Corporation, as
Depositor, Norwest Bank Minnesota, National Association, as Master Servicer
and The Chase Manhattan Bank, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Trust Agreement.
This letter relates to $[ ] initial Certificate Balance of Class
---
Certificates which are held in the form of Definitive Certificates registered
in the name of (the "Transferor"). The Transferor has requested
-------------
a transfer of such Definitive Certificates for Definitive Certificates of such
Class registered in the name of [insert name of transferee].
In connection with such request, and in respect of such Certificates, the
Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Trust Agreement
and the Certificates and (ii) Rule 144A under the Securities Act to a
purchaser that the Transferor reasonably believes is a "qualified
institutional buyer" within the meaning of Rule 144A purchasing for its own
account or for the account of a "qualified institutional buyer," which
purchaser is aware that the sale to it is being made in reliance upon Rule
144A, in a transaction meeting the requirements of Rule 144A and in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Placement Agent and the Depositor.
-------------------------------------
[Name of Transferor]
By:
----------------------------------
Name:
Title:
Dated: ,
----------- ----
EXHIBIT G
---------
RESERVED
EXHIBIT H
---------
[FORM OF ERISA TRANSFER AFFIDAVIT]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the of (the "Investor"), a
----------------------
[corporation duly organized] and existing under the laws of , on
----------
behalf of which he makes this affidavit.
2. The Investor either (x) is not an employee benefit plan subject to
Section 406 or Section 407 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), the Trustee of any such plan or a person acting
on behalf of any such plan nor a person using the assets of any such plan or
(2) if the Investor is an insurance company, such Investor is purchasing such
Certificates with funds contained in an "Insurance Company General Account"
(as such term is defined in Section v(e) of the Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60; or (y) shall deliver to the Trustee
and the Depositor an opinion of counsel (a "Benefit Plan Opinion")
satisfactory to the Trustee and the Depositor, and upon which the Trustee and
the Depositor shall be entitled to rely, to the effect that the purchase or
holding of such Certificate by the Investor will not result in the assets of
the Trust Fund being deemed to be plan assets and subject to the prohibited
transaction provisions of ERISA or the Code and will not subject the Trustee
or the Depositor to any obligation in addition to those undertaken by such
entities in the Trust Agreement, which opinion of counsel shall not be an
expense of the Trustee or the Depositor.
3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among Structured Asset Securities Corporation, as
Depositor, Norwest Bank Minnesota, National Association, as Master Servicer,
and The Chase Manhattan Bank, as Trustee, dated as of July 1, 1998, no
transfer of the ERISA-Restricted Certificates shall be permitted to be made to
any person unless the Depositor and Trustee have received a certificate from
such transferee in the form hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this day of , 199 .
---- --------------- --
---------------------------------
[Investor]
By:
------------------------------
Name:
Title:
EXHIBIT I
---------
MONTHLY REMITTANCE ADVICE
EXHIBIT J
---------
MONTHLY ELECTRONIC DATA TRANSMISSION
EXHIBIT K
---------
CUSTODIAL AGREEMENTS
EXHIBIT L
---------
SPECIAL SERVICING COMPENSATION AGREEMENT
SCHEDULE A
----------
MORTGAGE LOAN SCHEDULE
