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EXHIBIT 10.1
CMC SECURITIES CORPORATION III,
as Depositor
BANK OF AMERICA, FSB
and
CENDANT MORTGAGE CORPORATION
as Master Servicers
and
FIRST CHICAGO NATIONAL PROCESSING CORPORATION
as Custodian
and
THE FIRST NATIONAL BANK OF CHICAGO
as Certificate Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of March 1, 1998
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CMC Securities Corporation III
Collateralized Mortgage Obligations
Series 1998-1
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ARTICLE I- DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - CONVEYANCE OF MORTGAGE LOANS . . . . . . . . . . . . . . . . . . 18
Section 2.01. Conveyance of Mortgage Loans to Certificate Trustee . . 18
Section 2.02. Acceptance of Mortgage Loans by Certificate Trustee . . 21
Section 2.03. Representations, Warranties and Covenants of the
Master Servicers . . . . . . . . . . . . . . . . . . 23
Section 2.04 Assignment of Interest in the Mortgage Loan Purchase
Agreement . . . . . . . . . . . . . . . . . . . . . 24
Section 2.05 Substitution of Mortgage Loans . . . . . . . . . . . . 25
Section 2.06. Representations and Warranties Concerning the
Depositor . . . . . . . . . . . . . . . . . . . . . 26
Section 2.07. The Custodian . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE III - ADMINISTRATION AND SERVICING OF MORTGAGE LOANS . . . . . . . . 28
Section 3.01. Master Servicers to Master Service . . . . . . . . . . 28
Section 3.02. Delivery of Documents to Successor Master Servicers . . 28
Section 3.03. Collection of Mortgage Loan Payments . . . . . . . . . 29
Section 3.04. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts . . . . . . . . . . . . . . . . . 29
Section 3.05. Access to Certain Documentation and Information
Regarding the Mortgage Loans . . . . . . . . . . . . 30
Section 3.06. Maintenance of Primary Mortgage Insurance Policies;
Collection Thereunder . . . . . . . . . . . . . . . 31
Section 3.07. Maintenance of Hazard Insurance and Fidelity Coverage . 31
Section 3.08. Due-on-Sale Clauses; Assumption Agreements . . . . . . 32
Section 3.09. Realization upon Defaulted Mortgage Loans . . . . . . . 33
Section 3.10. Certificate Trustee to Cooperate; Release of Mortgage
Files . . . . . . . . . . . . . . . . . . . . . . . 34
Section 3.11. Master Servicing Compensation . . . . . . . . . . . . . 35
Section 3.12. Annual Statement of Compliance . . . . . . . . . . . . 36
Section 3.13. Annual Independent Public Accountants'
Servicing Report . . . . . . . . . . . . . . . . . . 36
Section 3.14. REMIC-Related Covenants . . . . . . . . . . . . . . . . 37
Section 3.15. Additional Information . . . . . . . . . . . . . . . . 37
Section 3.16. Master Servicer Reports . . . . . . . . . . . . . . . . 37
ARTICLE IV- ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 4.01. Protected Accounts . . . . . . . . . . . . . . . . . . 39
Section 4.02. Certificate Account . . . . . . . . . . . . . . . . . . 41
Section 4.03. Permitted Withdrawals and Transfers from the
Certificate Account . . . . . . . . . . . . . . . . 42
Section 4.04 Buydown Fund Accounts . . . . . . . . . . . . . . . . . 45
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ARTICLE V - CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.01. The Certificates . . . . . . . . . . . . . . . . . . . 46
Section 5.02. Certificates Issuable in Series; Authorized
Denominations . . . . . . . . . . . . . . . . . . . 46
Section 5.03. Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . 47
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates . . . 47
Section 5.05. Persons Deemed Owners . . . . . . . . . . . . . . . . . 48
Section 5.06. Office for Transfer of Certificates . . . . . . . . . . 48
ARTICLE VI - PAYMENTS TO CERTIFICATEHOLDERS . . . . . . . . . . . . . . . . . 48
Section 6.01. Distributions to Certificateholders . . . . . . . . . . 48
Section 6.02. Statements to Certificateholders . . . . . . . . . . . 48
Section 6.03. Monthly Advances . . . . . . . . . . . . . . . . . . . 50
Section 6.04. Compensating Interest Payments . . . . . . . . . . . . 51
Section 6.05. Reports of Foreclosures and Abandonment of
Mortgaged Property . . . . . . . . . . . . . . . . . 51
ARTICLE VII - THE MASTER SERVICERS . . . . . . . . . . . . . . . . . . . . . 51
Section 7.01. Liabilities of the Master Servicers . . . . . . . . . . 51
Section 7.02. Merger or Consolidation of a Master Servicer . . . . . 51
Section 7.03. Indemnification of the Certificate Trustee . . . . . . 51
Section 7.04. Limitation on Liability of the Master Servicer and
Others . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.05. No Master Servicer to Resign . . . . . . . . . . . . . 53
Section 7.06. Sale and Assignment of Master Servicing . . . . . . . . 53
ARTICLE VIII - DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 8.01. Events of Default . . . . . . . . . . . . . . . . . . . 54
Section 8.02. Certificate Trustee to Act; Appointment of Successor . 55
Section 8.03. Notification to Certificateholders . . . . . . . . . . 56
Section 8.04. Waiver of Defaults . . . . . . . . . . . . . . . . . . 56
Section 8.05. List of Certificateholders . . . . . . . . . . . . . . 57
ARTICLE IX - CONCERNING THE CERTIFICATE TRUSTEE . . . . . . . . . . . . . . . 57
Section 9.01. Duties of Certificate Trustee . . . . . . . . . . . . . 57
Section 9.02. Certain Matters Affecting the Certificate Trustee . . . 59
Section 9.03. Certificate Trustee Not Liable for Certificates or
Mortgage Loans . . . . . . . . . . . . . . . . . . . 60
Section 9.04. Certificate Trustee May Own Certificates . . . . . . . 61
Section 9.05. Certificate Trustee's Fees and Expenses . . . . . . . . 61
Section 9.06. Eligibility Requirements for Certificate Trustee . . . 61
Section 9.07. Insurance . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.08. Resignation and Removal of the Certificate Trustee . . 62
Section 9.09. Successor Certificate Trustee . . . . . . . . . . . . . 63
Section 9.10. Merger or Consolidation of Certificate Trustee . . . . 63
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Section 9.11. Appointment of Co-Certificate Trustee or Separate
Certificate Trustee . . . . . . . . . . . . . . . 63
Section 9.12. Master Servicers Shall Provide Information as
Reasonably Required . . . . . . . . . . . . . . . 65
ARTICLE X - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.01. Termination of a Series Upon Repurchase by
BSMCC or its Designee or the Depositor or
Liquidation of the Mortgage Loans . . . . . . . . 65
ARTICLE XI - MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . 67
Section 11.01. Amendment . . . . . . . . . . . . . . . . . . . . . 67
Section 11.02. Recordation of Agreement . . . . . . . . . . . . . . 68
Section 11.03. Limitation on Rights of Certificateholders . . . . . 68
Section 11.04. Acts of Certificateholders . . . . . . . . . . . . . 69
Section 11.05. Governing Law . . . . . . . . . . . . . . . . . . . 70
Section 11.06. Notices . . . . . . . . . . . . . . . . . . . . . . 70
Section 11.07. Severability of Provisions . . . . . . . . . . . . . 71
Section 11.08. Successors and Assigns . . . . . . . . . . . . . . . 71
Section 11.09. Article and Section Headings . . . . . . . . . . . . 71
Section 11.10. Counterparts . . . . . . . . . . . . . . . . . . . . 72
Section 11.11. Notice to Rating Agencies . . . . . . . . . . . . . 72
SCHEDULES
Schedule I - Schedule of Group 1 Loans
Schedule II - Schedule of Group 2 Loans
Schedule III - Schedule of Group 3 Loans
EXHIBITS
Exhibit A - Form of Certificate
Exhibit B-1 - Group 1 Mortgage Loan Schedule
Exhibit B-2 - Group 2 Mortgage Loan Schedule
Exhibit B-3 - Group 3 Mortgage Loan Schedule
Exhibit C - Representations and Warranties of BSMCC Covering the
Mortgaged Loans
Exhibit D - Request for Release of Documents
Exhibit E - Form of Purchaser Representation Letter
Exhibit F - [Reserved]
Exhibit G - Form of Initial Certification
Exhibit H - Form of Final Certification
Exhibit I-1 - Master Servicer's Report (Cendant)
Exhibit I-2 - Master Servicer's Report (BAFSB)
Exhibit J - List of Mortgage Loans for Which Mortgage Notes are
Lost
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POOLING AND SERVICING AGREEMENT
This Pooling and Servicing Agreement dated as of March 1, 1998, is
executed by and between CMC Securities Corporation III, a Delaware corporation,
as the depositor (the "Depositor"), Bank of America, FSB ("BAFSB"), and Cendant
Mortgage Corporation ("Cendant" and, together with BAFSB, the "Master
Servicers"), as master servicers, First Chicago National Processing
Corporation, as custodian (the "Custodian"), The First National Bank of
Chicago, a national banking association, not in its individual capacity but
solely as certificate trustee (the "Certificate Trustee") and, solely as to
Sections 2.02, 2.04 and 2.05 and Article X, Bear ▇▇▇▇▇▇▇ Mortgage Capital
Corporation ("BSMCC").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Depositor has acquired the Mortgage
Loans from Capstead Capital Corporation ("CCC"), which, in turn, has acquired
the Mortgage Loans from Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation ("BSMCC").
On the Closing Date, the Depositor will sell the Mortgage Loans and certain
other property to the Certificate Trustee and receive in consideration therefor
Certificates evidencing the entire beneficial ownership interest in the Trusts.
The Certificates will be issued pursuant to this Agreement in three Series,
each of which shall evidence the entire beneficial ownership interest in a
Mortgage Loan Group consisting of Mortgage Loans.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of $593,796,661. The initial principal amount of the
Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
otherwise expressly provided or unless the context otherwise requires, shall
have the meanings specified in this Article.
Account: The Buydown Fund Accounts, the Certificate Account (including
each subaccount thereof), the Protected Accounts or the Servicing Accounts as
the context may require.
Adjustment Amount: As defined in the Series Supplement.
Affiliate: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to
direct the management and policies of a Person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise. "Controlled"
and "Controlling" have meanings correlative to the foregoing. The
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Certificate Trustee may conclusively presume that a Person is not an Affiliate
of another Person unless a Responsible Officer of the Certificate Trustee has
actual knowledge to the contrary.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
Applicable Credit Rating: A credit rating of "Aaa", in the case of
Moody's or a rating of "AAA", in the case of DCR, for any long-term deposit or
security or a rating of "Prime-1" in the case of Moody's or "D-1+" in the case
of DCR, for any short-term deposit or security.
Appraised Value: For any Mortgaged Property, the amount set forth as
the appraised value of such Mortgaged Property in an appraisal made for the
mortgage originator in connection with its origination of the related Mortgage
Loan.
Available Funds: With respect to any Distribution Date, the sum of the
Group 1 Available Funds, the Group 2 Available Funds and the Group 3 Available
Funds for such Distribution Date.
Assignment Agreement: The Assignment, Assumption and Recognition
Agreement dated as of March 31, 1998 by and among CCC, the Depositor and BSMCC.
Authorized Denominations: With respect to the Certificates, an initial
Certificate Principal Balance equal to $25,000 and integral multiples of $1 in
excess thereof, except that one Certificate of each Series may be issued in a
different amount.
BA Loan Sale Agreement: The Purchase, Warranties and Servicing
Agreement among BAFSB, BANTSA and BSMCC, dated as of February 26, 1998, and the
related Term Sheet dated March 25, 1998, as each may be amended or
supplemented from time to time, with respect to the BA Mortgage Loans.
BA Mortgage Loans: The Mortgage Loans that were originated or acquired
by BAFSB or BANTSA, as indicated on the Mortgage Loan Schedule relating to the
Group 1 Mortgage Loans, and sold to BSMCC pursuant to the BA Loan Sale
Agreement.
BAFSB: Bank of America, FSB, or its successors in interest.
Bankruptcy Code: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. Sections 101-1330.
BANTSA: Bank of America National Trust and Savings Association, or its
successors in interest.
Bonds: The bonds issued pursuant to the Indenture.
BSMCC: Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation.
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Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange is closed or on which banking
institutions in New York City or in the States of California, New Jersey or
Virginia are authorized or obligated by law or executive order to be closed.
Buydown Fund: A fund provided by the originator of a Mortgage Loan or
another Person with respect to a Buydown Loan which provides an amount
sufficient to subsidize regularly scheduled principal and interest payments due
on such Buydown Loan for a period. Buydown Funds are funded at the par values
of future payment subsidies. Buydown Funds may be held in a separate Buydown
Fund Account or may be held in a Protected Account.
Buydown Fund Account: A separate account or accounts created and
maintained pursuant to Section 4.04 with the corporate trust department of the
Certificate Trustee or another financial institution approved by the related
Master Servicer. Each Buydown Fund Account shall be a Rating Agency Eligible
Account.
Buydown Loan: A Mortgage Loan for which the Mortgage Interest Rate has
been subsidized through a Buydown Fund provided at the time of origination of
such Mortgage Loan.
CCC: Capstead Capital Corporation.
Cendant: Cendant Mortgage Corporation, or its successors in interest.
Cendant Loan Sale Agreement: The Seller's Warranties and Servicing
Agreements between Cendant and BSMCC, each dated as of March 1, 1998, as
amended or supplemented from time to time, with respect to the Cendant Mortgage
Loans.
Cendant Mortgage Loans: The Mortgage Loans that were originated or
acquired by Cendant, as indicated on the Mortgage Loan Schedule relating to the
Mortgage Loans, and sold to BSMCC pursuant to the Cendant Loan Sale Agreements.
Certificate: Any of the Certificates issued pursuant to this Agreement,
executed by the Certificate Trustee and authenticated by or on behalf of the
Certificate Trustee hereunder in substantially the form set forth in Exhibit A.
Certificate Account: The trust account or accounts created and
maintained pursuant to Section 4.02, which shall be denominated "The First
National Bank of Chicago, as Certificate Trustee f/b/o holders of CMC
Securities Corporation III Mortgage Pass-Through Certificates, Series 1998-1,
Certificate Account".
Certificate Account Advance: As of any Distribution Date, the amount on
deposit in a Protected Account which is not required to be transferred to the
Certificate Account for payment during the calendar month in which such
Distribution Date occurs but which is deposited in a subaccount of the
Certificate Account and used to make a distribution to Certificateholders
during such calendar month on account of Scheduled Payments on the Mortgage
Loans due on the Due Date
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for such month not being paid on or before such Determination Date except
insofar as such unpaid amounts are the result of application of the Relief Act.
Certificate Principal Balance: With respect to a Series of
Certificates, the Initial Certificate Principal Balance of such Series of
Certificates, reduced by all amounts of principal distributed in respect of
such Series of Certificates pursuant to the terms of this Agreement, and
further reduced by the principal portion of any Realized Losses allocated in
respect of such Series of Certificates pursuant to the terms of this Agreement.
Certificate Register: The register maintained pursuant to Section 5.03.
Certificate Trustee: The First National Bank of Chicago, or its
successor in interest, or any successor Certificate Trustee appointed as herein
provided.
Certificate Trustee's Fees: The amount to be paid to the Certificate
Trustee for performing its services hereunder. The Certificate Trustee's Fee
shall, as to any Distribution Date, be an amount equal to the investment
earnings, net of losses, on the amounts on deposit from time to time in the
Certificate Account maintained by the Certificate Trustee.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of
giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor, any Master Servicer or any Affiliate thereof shall
be deemed not to be outstanding and the Fractional Undivided Interest evidenced
thereby shall not be taken into account in determining whether the requisite
percentage of Fractional Undivided Interests necessary to effect any such
consent has been obtained; provided, however, that the Certificate Trustee may
conclusively rely upon an Officer's Certificate to determine whether any Person
is an Affiliate of the Depositor or any Master Servicer.
Closing Date: March 31, 1998.
Code: The Internal Revenue Code of 1986, as amended.
Compensating Interest Payments: As defined in Section 6.04.
Corporate Trust Office: The office of the Certificate Trustee at which
at any particular time its corporate trust business is administered, which
office, at the date of the execution of this Agreement, is located at ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attention: Corporate
Trust Department.
Custodial Agreement: Any agreement between the Certificate Trustee and
the entity named therein pursuant to which such entity agrees to act as
custodian of some or all of the Mortgage Files.
Custodian: First Chicago National Processing Corporation, or any
successor custodian appointed in accordance with this Agreement and any
applicable Custodial Agreement that has accepted such appointment in connection
therewith.
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Cut-off Date: March 1, 1998.
Cut-off Date Balance: (1) With respect to the Group 1 Mortgage Loans,
$415,921,869, (2) with respect to the Group 2 Mortgage Loans, $88,317,906 and
with respect to the Group 3 Mortgage Loans, $89,556,886.
DCR: Duff & ▇▇▇▇▇▇ Credit Rating Co.
Debt Service Reduction: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of
any proceeding under the Bankruptcy Code or any other similar state law or
other proceeding.
Debtor Relief Laws: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium,
reorganization, or similar debtor relief laws affecting the rights of creditors
generally from time to time in effect.
Defaulted Mortgage Loan: Any Mortgage Loan as to which the Mortgagor
has failed to make unexcused payment in full of three or more consecutive
Scheduled Payments.
Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
Depositor: CMC Securities Corporation III, a Delaware corporation, or
its successors in interest.
Designated Depository Institution: A depository institution, commercial
bank, federal savings bank, mutual savings bank or savings and loan association
(which may include BANTSA and BAFSB) or trust company (which may include the
Certificate Trustee), the deposits of which are fully insured by the FDIC to
the extent provided by law.
Determination Date: The 18th day of the month of the Distribution Date,
or if such day is not a Business Day, the preceding Business Day.
Discount Mortgage Loan: Any Group 1 Mortgage Loan with a Net Rate less
than 6.75% per annum and any Group 2 Mortgage Loan with a Net Rate less than
6.50% per annum.
Distribution Date: The 25th day of any month, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is
not a Business Day, the immediately following Business Day.
Due Date: With respect to each Mortgage Loan, the first day of each
calendar month.
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Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which the
Distribution Date occurs and ending at the close of business on the first day
of the month in which the Distribution Date occurs.
Event of Default: An event described in Section 8.01.
Excess Liquidation Proceeds: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed
the sum of (i) the Outstanding Principal Balance of such Mortgage Loan and
accrued but unpaid interest at the related Mortgage Interest Rate through the
last day of the month in which the related Liquidation Date occurs, plus (ii)
related Liquidation Expenses.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FNMA: Federal National Mortgage Association or any successor thereto.
Fractional Undivided Interest: With respect to any Certificate of a
Series, the fractional undivided interest in the related Trust Fund for such
Series as evidenced by such Certificate.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac, formerly the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Group Available Funds: Reference to any one of the Group 1 Available
Funds, Group 2 Available Funds or Group 3 Available Funds.
Group 1 Available Funds, Group 2 Available Funds, Group 3 Available
Funds: With respect to any Distribution Date, an amount equal to the aggregate
of the following amounts with respect to the Mortgage Loans in Mortgage Loan
Groups 1, 2 and 3, respectively: (a) all previously undistributed payments on
account of principal (including the principal portion of Scheduled Payments,
Principal Prepayments and the principal portion of Net Liquidation Proceeds)
and all previously undistributed payments on account of interest received after
the Cut-off Date and on or prior to the related Determination Date, (b) any
Monthly Advances (including Certificate Account Advances) and Compensating
Interest Payments by the Master Servicer with respect to such Distribution Date
and (c) any amount reimbursed by the Master Servicer pursuant to 4.01(a) in
connection with losses on Permitted Investments, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds received
after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
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(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances (including
Certificate Account Advances);
(v) amounts of Monthly Advances (including Certificate Account
Advances) determined to be Nonrecoverable Advances; and
(vi) amounts permitted to be withdrawn from the Certificate
Account pursuant to Section 4.03(a).
Group 1 Mortgage Loan Schedule: The schedule attached hereto as Exhibit
B-1 with respect to the Group 1 Mortgage Loans, as amended from time to time to
reflect the repurchase or substitution of Group 1 Mortgage Loans pursuant to
this Agreement.
Group 1 Mortgage Loans: The Mortgage Loans identified in the Group 1
Mortgage Loan Schedule.
Group 2 Mortgage Loan Schedule: The schedule attached hereto as Exhibit
B-2 with respect to the Group 2 Mortgage Loans, as amended from time to time to
reflect the repurchase or substitution of Group 2 Mortgage Loans pursuant to
this Agreement.
Group 2 Mortgage Loans: The Mortgage Loans identified in the Group 2
Mortgage Loan Schedule.
Group 3 Mortgage Loan Schedule: The schedule attached hereto as Exhibit
B-3 with respect to the Group 3 Mortgage Loans, as amended from time to time to
reflect the repurchase or substitution of Group 3 Mortgage Loans pursuant to
this Agreement.
Group 3 Mortgage Loans: The Mortgage Loans identified in the Group 3
Mortgage Loan Schedule.
Indemnified Persons: The Certificate Trustee, its officers, directors,
agents and employees and any separate Co-Certificate Trustee and its officers,
directors, agents and employees.
Indenture: The Indenture, dated as of March 1, 1998, by and between the
Depositor and the Indenture Trustee, as supplemented by the Series Supplement.
Indenture Trustee: The First National Bank of Chicago, or its
successors and assigns, as indenture trustee under the Indenture.
Independent: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Depositor, or the
applicable Master Servicer and of any Affiliate of the Depositor or the
applicable Master Servicer, (b) does not have any direct financial interest or
any material indirect financial interest in the Depositor or such Master
Servicer, or any Affiliate of the Depositor or such Master Servicer, and (c) is
not connected with the Depositor or
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such Master Servicer, or any Affiliate of the Depositor or such Master Servicer
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Initial Certificate Principal Balance: With respect to the Series 1998-
1A Certificates, $415,921,869, with respect to the Series 1998-1B Certificates,
$88,317,906, and with respect to the Series 1998-1C Certificates, $89,556,886.
Insurance Policy: With respect to any Mortgage Loan, any Primary
Mortgage Insurance Policy, standard hazard insurance policy, flood insurance
policy or title insurance policy.
Insurance Proceeds: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.
Insured Expenses: Expenses covered by any Insurance Policy.
Insurer: Any issuer of an Insurance Policy.
Interest Shortfall: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Voluntary Principal Prepayment, or constitutes a Relief Act Mortgage Loan, an
amount determined as follows:
(a) partial principal prepayments received during the relevant
Prepayment Period: The difference between (i) one month's interest at
the applicable Net Rate on the amount of such prepayment and (ii) the
amount of interest for the calendar month of such prepayment (adjusted
to the applicable Net Rate) received at the time of such prepayment;
(b) principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at
the applicable Net Rate on the Scheduled Principal Balance of such
Mortgage Loan immediately prior to such prepayment and (ii) the amount
of interest for the calendar month of such prepayment (adjusted to the
applicable Net Rate) received at the time of such prepayment;
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage
Loan, the excess of (i) one month's interest at the applicable Net Rate
on the Scheduled Principal Balance thereof, over (ii) one month's
interest on such Scheduled Principal Balance at the Net Rate required to
be paid by the Mortgagor as limited by application of the Relief Act.
Liquidated Mortgage Loan: Any Defaulted Mortgage Loan as to which the
related Master Servicer has determined that all amounts it expects to recover
from or on account of such Mortgage Loan have been recovered.
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Liquidation Date: With respect to any Liquidated Mortgage Loan, the
date on which the related Master Servicer has certified that such Mortgage Loan
has become a Liquidated Mortgage Loan.
Liquidation Expenses: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the related
Master Servicer and not recovered by the Master Servicer under any Primary
Mortgage Insurance Policy for reasons other than the Master Servicer's failure
to ensure the maintenance of or compliance with a Primary Mortgage Insurance
Policy, such expenses including (a) property protection expenses, (b) property
sales expenses, (c) foreclosure and sale costs, including court costs and
reasonable attorneys' fees, and (d) similar expenses reasonably paid or
incurred in connection with liquidation.
Liquidation Proceeds: Cash received in connection with the liquidation
of a Defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related
Mortgaged Property.
Lost Notes: The original Mortgage Notes that have been lost, as
indicated on Exhibit J hereto.
Master Servicer: With respect to the BA Mortgage Loans, BAFSB, or its
successor in interest, or any successor master servicer with respect to the BA
Mortgage Loans appointed as herein provided, and with respect to the Cendant
Mortgage Loans, Cendant, or its successor in interest, or any successor master
servicer with respect to the Cendant Mortgage Loans appointed as herein
provided.
Master Servicer Remittance Date: The 18th day of any month, beginning
in the month immediately following the month of the Closing Date, or, if such
18th day is not a Business Day, the immediately following Business Day.
Master Servicer Report: With respect to the Cendant Mortgage Loans, a
report delivered by Cendant, and with respect to the BA Mortgage Loans, a
report delivered by BAFSB, in each case pursuant to Section 3.16 hereof.
Master Servicing Fee: As to any Mortgage Loan and any Distribution Date,
an amount equal to 1/12 of the product of (1) the related Master Servicing Fee
Rate and (2) the Scheduled Principal Balance as of the related Due Date, before
reduction by payments due on such date.
Master Servicing Fee Rate: With respect to any BA Mortgage Loan, 0.25%,
and with respect to any Cendant Mortgage Loan the per annum rate set forth for
such Cendant Mortgage Loan in the applicable Mortgage Loan Schedule.
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Monthly Advance: The advance required to be made by a Master Servicer
on the related Master Servicer Remittance Date pursuant to Section 6.03.
Monthly Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month
on such Mortgage Loan which either is payable by a Mortgagor in such month
under the related Mortgage Note or, in the case of REO Property, would
otherwise have been payable under the related Mortgage Note.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
Mortgage File: The mortgage documents listed in Section 2.01(c)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan transferred and assigned to the
Certificate Trustee pursuant to Section 2.01 or Section 2.05 and held as a part
of the related Trust Fund, as identified in the related Mortgage Loan Schedule,
including a mortgage loan, the Mortgaged Property securing which has become an
REO Property.
Mortgage Loan Group: The Group 1 Mortgage Loans, the Group 2 Mortgage
Loans or the Group 3 Mortgage Loans, as applicable.
Mortgage Loan Group 1: The Group 1 Mortgage Loans.
Mortgage Loan Group 2: The Group 2 Mortgage Loans.
Mortgage Loan Group 3: The Group 3 Mortgage Loans.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of March 31, 1998, between BSMCC, as seller, and CCC, as purchaser.
Mortgage Loan Schedule(s): One or more of the Group 1 Mortgage Loan
Schedule, the Group 2 Mortgage Loan Schedule or the Group 3 Mortgage Loan
Schedule.
Mortgage Note: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
Mortgaged Property: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
Mortgagor: The obligor or obligors on a Mortgage Note.
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Net Interest Shortfall: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
Net Liquidation Proceeds: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable
therefrom to the related Master Servicer in accordance with this Agreement and
(ii) unreimbursed advances by the related Master Servicer and Monthly Advances
and Certificate Account Advances.
Net Rate: With respect to each Mortgage Loan, the Mortgage Interest
Rate in effect from time to time less the applicable Master Servicing Fee Rate.
Non-Discount Mortgage Loan: Any Group 1 Mortgage Loan with a Net Rate
equal to or greater than 6.75%, any Group 2 Mortgage Loans with a Net Rate
equal to or greater than 6.50% or any Group 3 Mortgage Loan.
Nonrecoverable Advance: Any advance (i) which was previously made or is
proposed to be made by a Master Servicer and (ii) which, in the good faith
judgment of such Master Servicer, as evidenced by an Officer's Certificate,
will not or, in the case of a proposed advance, would not, be ultimately
recoverable by such Master Servicer from Liquidation Proceeds, Insurance
Proceeds or future payments on the Mortgage Loan for which such advance was
made.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President or
Assistant Vice President or other authorized officer of a Master Servicer or,
if applicable, BSMCC and delivered to the Certificate Trustee or the Custodian,
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel who is or are
acceptable to the Certificate Trustee and who, unless required to be
Independent (an "Opinion of Independent Counsel"), may be internal counsel for
a Master Servicer.
Original Value: The lesser of (i) the Appraised Value or (ii) sales
price of a Mortgaged Property at the time of origination of a purchase money
Mortgage Loan, except that in instances where either (i) or (ii) is
unavailable, the other may be used to determine Original Value, or if both (i)
and (ii) are unavailable, Original Value may be determined from other sources
reasonably acceptable to the Certificate Trustee.
Outstanding Mortgage Loan: With respect to any Due Date, a Mortgage Loan
which, prior to such Due Date, was not the subject of a Principal Prepayment in
full, did not become a Liquidated Mortgage Loan and was not purchased pursuant
to Sections 2.02 or 2.04.
Outstanding Principal Balance: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time
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such property was acquired by the related Trust less any Insurance Proceeds
with respect thereto to the extent applied to principal.
Permitted Investments: Any one or more of the following obligations or
securities held in the name of the Certificate Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment of
which are fully guaranteed 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;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof or the District of Columbia (including the Certificate Trustee
acting in its commercial banking capacity) and subject to supervision
and examination by federal and/or state banking authorities, provided
that the commercial paper and/or the short-term debt rating and/or the
long-term unsecured debt obligations of such depository institution or
trust company at the time of such investment or contractual commitment
providing for such investment have the Applicable Credit Rating or
better from each Rating Agency and (b) any other demand or time deposit
or certificate of deposit that is fully insured by the FDIC;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an 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, in either case entered into with
a depository institution or trust company (acting as principal)
described in clause (ii)(a) above where the Certificate Trustee holds
the security therefor;
(iv) securities bearing interest or sold at a discount issued by
any corporation (including the Certificate Trustee) incorporated under
the laws of the United States of America or any state thereof that have
the Applicable Credit Rating or better from each Rating Agency at the
time of such investment or contractual commitment providing for such
investment; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that
investments therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Trust Fund
to exceed 10% of the aggregate Outstanding Principal Balances and
amounts of all the Mortgage Loans and Permitted Investments,
respectively, held as part of the Trust Fund;
(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 one year after the date of issuance
thereof) having the Applicable Credit Rating or better from each Rating
Agency at the time of such investment;
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(vi) a Reinvestment Agreement;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating
Agency as evidenced in writing by each Rating Agency to the Certificate
Trustee; and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including
any such fund for which either Master Servicer, the Certificate Trustee
or any affiliate of any of them acts as a manager or an advisor;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Prepayment Period: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month of such Distribution
Date.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the related
Mortgagor under such Mortgage Note or the related Security Instrument, or any
replacement policy therefor.
Principal Prepayment: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not intended by the Mortgagor to be
Scheduled Principal and is not accompanied by an amount as to interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment, including Insurance Proceeds and the
purchase price in connection with any purchase of a Mortgage Loan, any cash
deposit in connection with the substitution of a Mortgage Loan, and the
principal portion of Net Liquidation Proceeds.
Protected Account: An account established and maintained in the name of
the Certificate Trustee for the benefit of Certificateholders by either Master
Servicer with respect to the Mortgage Loans and with respect to REO Property in
a Designated Depository Institution for receipt of principal and interest and
other amounts as described in Section 4.01.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it
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is engaged and approved as an insurer by the applicable Master Servicer, so
long as the claims paying ability of which is acceptable to the Rating Agencies
for collateralized mortgage obligations having the same rating as the highest
rating given to any Bonds rated by the Rating Agencies as of the Closing Date.
Rating Agencies: Moody's and DCR.
Rating Agency Eligible Account: An account, including one maintained
with the Certificate Trustee, which either (i) is a trust account maintained
with the corporate trust department of a depository institution or trust
company (including, without limitation, the Certificate Trustee) organized
under the laws of the United States of America or any one of the states thereof
or the District of Columbia which is not affiliated with either Master Servicer
or any other master servicer other than the Certificate Trustee or (ii) is
maintained with an entity which is an institution whose deposits are insured by
the FDIC, the unsecured and uncollateralized long-term debt obligations of
which shall be rated "A" or higher by Moody's and "A" or higher by DCR, or one
of the two highest short-term ratings by each Rating Agency, and which is
either (a) a federal savings association duly organized, validly existing and
in good standing under the federal banking laws, (b) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state or the District of Columbia, (c) a national banking
association under the federal banking laws, or (d) a principal subsidiary of a
bank holding company.
Realized Loss: Any (i) Deficient Valuation or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated
Mortgage Loan plus accrued and unpaid interest thereon at the Mortgage Interest
Rate through the last day of the month of such liquidation less (y) the related
Net Liquidation Proceeds with respect to such Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
Reinvestment Agreement: One or more reinvestment agreements, acceptable
to the Certificate Trustee and the Rating Agencies, from a bank, insurance
company or other corporation or entity (including the Certificate Trustee).
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
Relief Act Mortgage Loan: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: As defined in the Series Supplement.
REMIC II: As defined in the Series Supplement.
REMIC III: As defined in the Series Supplement.
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REMIC Opinion: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions,
(i) cause a Series REMIC to fail to qualify as a REMIC while any regular
interest in any Series REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to any Series REMIC or (iii) constitute a taxable
contribution to any Series REMIC after the Startup Day.
REMIC Provisions: The provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of the Code, and related
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Property: A Mortgaged Property acquired in the name of the
Certificate Trustee, for the benefit of the Certificateholders, by foreclosure
or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Section
2.02 or 2.04, an amount equal to the sum of (i) 100% of the Outstanding
Principal Balance of such Mortgage Loan as of the date of repurchase (or if the
related Mortgaged Property was acquired with respect thereto, 100% of the
Outstanding Principal Balance at the date of the acquisition) plus (ii) accrued
but unpaid interest on the Outstanding Principal Balance at the related
Mortgage Interest Rate, through and including the last day of the month of
repurchase reduced by (ii) any portion of the Master Servicing Fee or advances
payable to the purchaser of the Mortgage Loan.
Request for Release: A request for release in the form attached hereto
as Exhibit D.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under
this Agreement with respect to such Mortgage Loan.
Residual Bonds: The Class R-1, Class R-2 and R-3 Bonds.
Responsible Officer: Any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or
any other officer of the Certificate Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Agreement.
Scheduled Payment: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month
on such Mortgage Loan which either is payable by a Mortgagor (or payable from
Buydown Funds, in the case of a Buydown Loan) in such month under the related
Mortgage Note or, in the case of REO Property, would otherwise have been
payable under the related Mortgage Note.
Scheduled Principal: The principal portion of any Scheduled Payment.
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Scheduled Principal Balance: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
Scheduled Principal to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any Debt Service Reduction occurring after the Cut-off Date (other
than a Deficient Valuation) or any moratorium or similar waiver or grace
period) less (ii) any Principal Prepayments (including the principal portion of
Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
Securities Act: The Securities Act of 1933, as amended.
Security Instrument: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed,
including any riders or addenda thereto.
Series: A Series of Certificates (which may consist of a single
Certificate) evidencing a beneficial interest in the Trust for such Series.
The Series is indicated on the face of a Certificate. The Series issued
pursuant to this Agreement are designated as Series 1998-1A, Series 1998-1B and
Series 1998-1C.
Series REMIC: Any of REMIC I, REMIC II or REMIC III.
Series Supplement: The Series 1998-1 Supplement, dated as of March 31,
1998, to the Indenture, by and between the Depositor and the Indenture
Trustee.
Servicing Account: The separate trust account(s) created and maintained
by each Master Servicer pursuant to this Agreement with respect to the related
Mortgage Loans or REO Property in a Designated Depository Institution for
collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.04.
Servicing Advances: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by a Master Servicer of its servicing
obligations, including, but not limited to, the cost of (i) the preservation,
restoration and protection of the Mortgaged Property, (ii) any enforcement or
judicial proceedings, including foreclosures, (iii) the management and
liquidation of the REO Property, including reasonable fees paid to any
independent contractor in connection therewith, (iv) compliance with the
obligations under Section 3.04 or 3.07, and (v) in connection with the
liquidation of a Mortgage Loan, expenditures relating to the purchase or
maintenance of the first lien on the Mortgaged Property pursuant to Section
3.09, all of which reasonable and customary out-of-pocket costs and expenses
are reimbursable to such Master Servicer to the extent provided in Sections
4.02 and 4.03(a).
Servicing Officer: Any officer of a Master Servicer or of an agent or
independent contractor through which all or part of such Master Servicer's
servicing responsibilities are carried out, involved in, or responsible for,
the administration and servicing of the Mortgage Loans whose name
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and specimen signature appear on a list of servicing officers furnished to the
Certificate Trustee by such Master Servicer as such list may from time to time
be amended in accordance with the foregoing.
Special Hazard Loss: (i) A Realized Loss suffered by a Mortgaged
Property on account of direct physical loss, exclusive of (a) any loss covered
by a hazard policy or a flood insurance policy required to be maintained in
respect of such Mortgaged Property under Section 3.07 and (b) any loss caused
by or resulting from:
(1) normal wear and tear;
(2) conversion or other dishonest act on the part of the Certificate
Trustee, a Master Servicer or any of their agents or employees;
or
(3) errors in design, faulty workmanship or faulty materials, unless
the collapse of the property or a part thereof ensues;
or (ii) any Realized Loss suffered by the related Trust arising from or related
to the presence or suspected presence of hazardous wastes or hazardous
substances on a Mortgage Property as reported by a Master Servicer to the
Certificate Trustee unless such loss to a Mortgaged Property is covered by a
hazard policy or a flood insurance policy required to be maintained in respect
of such Mortgage Property under Section 3.07.
Startup Day: March 31, 1998.
Substitute Mortgage Loan: A mortgage loan tendered to the Custodian on
behalf of the Certificate Trustee pursuant to Section 2.05, in each case, (i)
which has an Outstanding Principal Balance not materially greater nor
materially less than the Mortgage Loan for which it is to be substituted; (ii)
which has a Mortgage Interest Rate and Net Rate not less than, and not
materially greater than, such Mortgage Loan; (iii) which has a maturity date
not materially earlier or later than such Mortgage Loan and not later than the
latest maturity date of any Mortgage Loan in the related Mortgage Loan Group;
(iv) which is of the same property type and occupancy type as such Mortgage
Loan; (v) which has a Loan-to-Value Ratio not greater than the Loan-to-Value
Ratio of such Mortgage Loan; (vi) which is current in payment of principal and
interest as of the date of substitution; and (vii) as to which the payment
terms do not vary in any material respect from the payment terms of the
Mortgage Loan for which it is to be substituted.
Trust: As defined in Section 2.01(a).
Trust Estate: As defined in the Indenture.
Trust Fund: With respect to a Series, the pool of assets subject hereto
in which the Certificates of such Series represent a beneficial interest,
constituting the related Trust created hereby and to be administered hereunder
with respect to such Series, consisting of: (i) the related Mortgage Loans and
all rights pertaining thereto including all interest and principal due with
respect to such
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Mortgage Loans after the Cut-off Date, but excluding any payments of principal
or interest due on or prior to the Cut-off Date; (ii) such assets as from time
to time shall be credited or are required by the terms of this Agreement to be
credited to the Certificate Account with respect to such Series; (iii) such
assets as from time to time may be held by a Master Servicer in Protected
Accounts (excluding any income to such Master Servicer from Permitted
Investments under Section 4.01(a)) or in Buydown Fund Accounts with respect to
such Series; (iv) any Servicing Accounts with respect to such Series (to the
extent the mortgagee has a claim thereto and excluding any income to the
applicable Master Servicer or interest payable to Mortgagors pursuant to
applicable law); (v) any REO Property with respect to such Series; (vi) the
Required Insurance Policies and any amounts paid or payable by the insurer
under any Insurance Policy (to the extent the mortgagee has a claim thereto)
with respect to such Series; (vii) the Mortgage Loan Purchase Agreement and the
Assignment Agreement to the extent provided in Section 2.04(a); and (viii) any
and all proceeds of the foregoing. The Trust Fund relating to Series 1998-1A
shall include the Mortgage Loans identified on the Group 1 Mortgage Loan
Schedule, the Trust Fund relating to Series 1998-1B shall include the Mortgage
Loans identified the Group 2 Mortgage Loan Schedule, and the Trust Fund
relating to Series 1998-1C shall include the Mortgage Loans identified the
Group 3 Mortgage Loan Schedule. Reference to holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than a certain
percentage of the Trust of a particular Series means holders of Certificates
the aggregate Fractional Undivided Interests of such Series of which, as
indicated on the face thereof, is not less than such percentage.
Uninsured Cause: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.07, without regard to whether or not such
policy is maintained.
Voluntary Principal Prepayment: With respect to any Prepayment Period,
any Principal Prepayment received from the related Mortgagor on a Mortgage
Loan.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Conveyance of Mortgage Loans to Certificate Trustee.
(a) Three trusts (each, a "Trust") of which the Certificate Trustee
is the trustee are hereby created under the laws of the State of New York for
the benefit of the Holders of the related Series of Certificates. The purpose
of each Trust is to hold the related Trust Fund and provide for the issuance,
execution, authentication and delivery of the related Certificates. The assets
of each Trust shall consist of the related Trust Fund. Each Trust shall be
irrevocable.
The assets of each Trust shall remain in the custody of the Custodian on
behalf of the Certificate Trustee, on behalf of the related Trust, and shall be
kept in the related Trust. Moneys to the credit of each Trust shall be held by
the Certificate Trustee and invested as provided herein. All assets received
and held in each Trust will not be subject to any right, charge, security
interest, lien
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or claim of any kind in favor of The First National Bank of Chicago in its own
right, or any Person claiming through it. The Certificate Trustee, on behalf
of each Trust, shall not have the power or authority to transfer, assign,
hypothecate, pledge or otherwise dispose of any of the assets of such Trust to
any Person, except as permitted herein. No creditor of a beneficiary of a
Trust, of the Certificate Trustee, of a Master Servicer, or of the Depositor
shall have any right to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of a Trust, except in
accordance with the terms of this Agreement.
(b) The Depositor concurrently with the execution and delivery of
this Agreement, sells, transfers and assigns to the Certificate Trustee,
without recourse, all its right, title and interest in and to the Trust Funds,
including but not limited to:
(i) the related Mortgage Loans and all rights pertaining
thereto including all interest and principal due with respect to such
Mortgage Loans after the Cut-off Date, but excluding any payments of
principal or interest due on or prior to the Cut-off Date;
(ii) such assets as shall from time to time be credited, or are
required by the terms of this Agreement to be credited, to the
Certificate Account,
(iii) such assets relating to the Mortgage Loans as from time to
time may be held by a Master Servicer in Protected Accounts (excluding
any income to such Master Servicer from Permitted Investments under
Section 4.01(a)) or in Buydown Fund Accounts;
(iv) any Servicing Accounts (to the extent the mortgagee has a
claim thereto and excluding any income to the applicable Master Servicer
or interest payable to Mortgagors pursuant to applicable law);
(v) any REO Property;
(vi) the Required Insurance Policies and any amounts paid or
payable by the insurer under any Insurance Policy (to the extent the
mortgagee has a claim thereto);
(vii) the Mortgage Loan Purchase Agreement to the extent
provided in Section 2.04(a); and
(viii) any proceeds of the foregoing.
Although it is the intent of the parties to this Agreement that the conveyance
of the Depositor's right, title and interest in and to the Mortgage Loans and
other assets in the Trust Funds pursuant to this Agreement shall constitute a
purchase and sale and not a loan, in the event that such conveyance is deemed
to be a loan, it is the intent of the parties to this Agreement that the
Depositor shall be deemed to have granted to the Certificate Trustee a first
priority perfected security interest in all of the Depositor's right, title and
interest in, to and under the Mortgage Loans and other assets in the Trust
Funds, and that this Agreement shall constitute a security agreement under
applicable law.
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(c) In connection with the above transfer and assignment, the
Depositor hereby deposits with the Custodian on behalf of the Certificate
Trustee, with respect to each Mortgage Loan (i) the original Mortgage Note,
endorsed without recourse to the order of the Certificate Trustee and showing
an unbroken chain of endorsements from the original payee thereof to the Person
endorsing it to the Certificate Trustee, (ii) the original Security Instrument,
which shall have been recorded, with evidence of such recording indicated
thereon, (iii) a certified copy of the assignment (which may be in the form of
a blanket assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to the Certificate Trustee of the Security Instrument,
with evidence of recording with respect to each Mortgage Loan in the name of
the Certificate Trustee thereon (or if (vii) below applies, shall be in
recordable form), (iv) all intervening assignments of the Security Instrument,
if applicable and only to the extent available to the Depositor with evidence
of recording thereon, (v) the original or a copy of the policy or certificate
of primary mortgage guaranty insurance, to the extent available, if any, (vi)
the original policy of title insurance or mortgagee's certificate of title
insurance or commitment or binder for title insurance, (vii) the originals of
each assumption, modification or substitution agreement, if any, relating to
the Mortgage Loan, and (viii) the certificate of primary mortgage insurance, if
applicable; provided, however, that in lieu of the foregoing, the Depositor may
deliver the following documents, under the circumstances set forth below:
(A) in lieu of the original Security Instrument, assignments
to the Certificate Trustee or intervening assignments thereof which have
been delivered, are being delivered or will, upon receipt of recording
information relating to the Security Instrument required to be included
thereon, be delivered to recording offices for recording and have not
been returned to the Depositor in time to permit their delivery as
specified above, the Depositor may deliver a true copy thereof with a
certification by BSMCC or the applicable Master Servicer, on the face of
such copy, substantially as follows: "Certified to be a true and
correct copy of the original, which has been transmitted for recording";
(B) in lieu of the Security Instrument, assignment to the
Certificate Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as
evidenced by a certification from BSMCC or the applicable Master
Servicer to such effect) the Depositor may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were
recorded; and
(C) in lieu of the original Mortgage Notes relating to five BA
Mortgage Loans and six Cendant Mortgage Loans, with an aggregate
Scheduled Principal Balance as of the Cut-off Date of $3,953,828.96,
each as identified in the list delivered by the Depositor to the
Certificate Trustee on the Closing Date and set forth in Exhibit J
hereto, the Depositor may deliver a lost note affidavit and, if
available, a copy of the original Mortgage Note;
and provided further, however, that in the case of Mortgage Loans which 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, may deliver to the
Custodian and to the Certificate Trustee a certification of a Servicing Officer
to such effect and shall deposit all amounts paid in respect of such Mortgage
Loans in the
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Certificate Account on the Closing Date. The Depositor shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the Custodian on behalf of the
Certificate Trustee promptly after they are received. As to each Mortgage Loan
master serviced by it, the applicable Master Servicer shall cause, at its
expense, the Security Instrument and intervening assignments, if any, and the
assignment of the Security Instrument to the Certificate Trustee to be recorded
not later than one year after the Closing Date.
Section 2.02. Acceptance of Mortgage Loans by Certificate Trustee.
(a) The Certificate Trustee acknowledges receipt of, subject to
further review and the exceptions which may be noted pursuant to the procedures
described below, and declares that the Custodian holds on behalf of the
Certificate Trustee the documents (or certified copies thereof) delivered to it
pursuant to Section 2.01 and declares that the Custodian on behalf of the
Certificate Trustee will continue to hold those documents and any amendments,
replacements or supplements thereto and all other assets of each Trust Fund
delivered to it as Certificate Trustee or to the Custodian in trust for the use
and benefit of all present and future Holders of the Certificates. No later
than 45 days after the Closing Date (or, with respect to any Substitute
Mortgage Loan, within five Business Days after the receipt thereof by the
Custodian on behalf of the Certificate Trustee), the Certificate Trustee
agrees, for the benefit of the Certificateholders, to cause the Custodian to
review each Mortgage File delivered to it and to execute and deliver, or cause
to be executed and delivered, to the Depositor and the applicable Master
Servicer an Initial Certification substantially in the form annexed hereto as
Exhibit G. In conducting such review, the Certificate Trustee will cause the
Custodian to ascertain whether all required documents have been executed and
received and whether those documents relate, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans it has received, as identified in the related Mortgage Loan Schedule
(provided, however, that with respect to those documents described in
subclauses (c)(iv), (c)(v) and (c)(vi) of Section 2.01, the Custodian's
obligations shall extend only to documents actually delivered pursuant to such
subsections). In performing any such review, the Custodian may conclusively
rely on the purported due execution and genuineness of any such document and on
the purported genuineness of any signature thereon. If the Custodian finds any
document constituting part of the Mortgage File not to have been executed or
received, or to be unrelated to the Mortgage Loans identified in the related
Mortgage Loan Schedule or to appear to be defective on its face, the Custodian
shall promptly notify BSMCC. BSMCC shall correct or cure any such defect
within 90 days from the date of notice from the Custodian of the defect and if
BSMCC fails to correct or cure the defect within such period, and such defect
materially and adversely affects the interests of the Certificateholders in the
related Mortgage Loan, BSMCC will, subject to Section 2.05, within 120 days
from the Certificate Trustee's notification purchase such Mortgage Loan at the
Repurchase Price; provided, however, that if such defect relates solely to the
inability of BSMCC to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy, because the originals of such
documents, or a certified copy, have not been returned by the applicable
jurisdiction, BSMCC shall not be required to purchase such Mortgage Loan if
BSMCC delivers such original documents or certified copy promptly upon receipt,
but in no event later than 360 days after the Closing Date. The foregoing
repurchase obligation shall not apply in the event that BSMCC cannot deliver
such original or copy of any document submitted for recording to the
appropriate recording office in the applicable jurisdiction because such
document
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has not been returned by such office; provided further, however, that BSMCC
shall instead deliver a recording receipt of such recording office or, if such
receipt is not available, a certificate of a Servicing Officer confirming that
such documents have been accepted for recording, and delivery to the Custodian
shall be effected by BSMCC within 30 days after its receipt of the original
recorded document.
(b) No later than one year after the Closing Date, the Certificate
Trustee will cause the Custodian to review, for the benefit of the
Certificateholders, the Mortgage Files delivered to it and will execute and
deliver or cause to be executed and delivered to the Depositor and each Master
Servicer, a Final Certification substantially in the form annexed hereto as
Exhibit H. In conducting such review, the Certificate Trustee will cause the
Custodian to ascertain whether an original of each document required to be
recorded has been returned from the recording office with evidence of recording
thereon or a certified copy has been obtained from the recording office. If
the Custodian finds that any document constituting part of the Mortgage File
has not been received, or is unrelated, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in the related Mortgage Loan Schedule or appears defective on
its face, the Custodian shall promptly notify BSMCC (provided, however, that
with respect to those documents described in subsection (c)(iv), (c)(v) and
(c)(vi) of Section 2.01, the Custodian's obligations shall extend only to the
documents actually delivered pursuant to such subsections). BSMCC shall
correct or cure any such defect or shall deliver to the Certificate Trustee and
the Custodian an Opinion of Counsel to the effect that such defect does not
materially or adversely affect the interests of Certificateholders in such
Mortgage Loan within 90 days after the date of notice from the Certificate
Trustee of the defect, and if BSMCC is unable to cure such defect or deliver
such Opinion of Counsel within such period, and if such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, BSMCC shall, subject to Section 2.05, within 120 days after the
Certificate Trustee's notification purchase such Mortgage Loan at the
Repurchase Price; provided, however, that if such defect relates solely to the
inability of BSMCC to deliver the original Security Instrument or intervening
assignments thereof, or a certified copy, because the originals of such
documents, or a certified copy, have not been returned by the applicable
jurisdiction, BSMCC shall not be required to purchase such Mortgage Loan, if
BSMCC delivers such original documents or certified copy promptly upon receipt,
but in no event later than 360 days after the Closing Date.
(c) Notwithstanding the foregoing and the provisions of Section 2.04,
if a Mortgage Loan is discovered to have a defect which, had such defect been
discovered before the Startup Day, would have prevented the Mortgage Loan from
being a "qualified mortgage" within the meaning of Section 860G(a)(3) of the
Code, BSMCC shall, within 90 days after the date such defect is discovered,
purchase such Mortgage Loan at the applicable Repurchase Price, unless BSMCC
delivers to the Certificate Trustee an Opinion of Counsel to the effect that
continuing to hold such Mortgage Loan will not adversely affect the status of
each of REMIC I, REMIC II and REMIC III as a REMIC for federal income tax
purposes.
(d) In the event that a Mortgage Loan is purchased by BSMCC in
accordance with Subsections 2.02(a), (b) or (c) above, BSMCC shall provide the
Repurchase Price to the Certificate Trustee for deposit in the Certificate
Account and shall provide to the Certificate Trustee written
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notification detailing the components of the Repurchase Price. Upon deposit of
the Repurchase Price in the Certificate Account, the Certificate Trustee shall
cause the Custodian to release to BSMCC the related Mortgage File and shall
execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by BSMCC as are necessary to vest in BSMCC title to
and rights under the Mortgage Loan. Such purchase shall be deemed to have
occurred on the date on which the Repurchase Price in available funds is
received by the Certificate Trustee. The Certificate Trustee shall amend the
applicable Mortgage Loan Schedule, which was previously delivered to it by the
Depositor in a form agreed to between the Depositor and the Certificate
Trustee, to reflect such repurchase and shall promptly notify the applicable
Master Servicer and the Rating Agencies of such amendment. The obligation of
BSMCC to repurchase (or substitute a Substitute Mortgage Loan, pursuant to
Section 2.04, for) any Mortgage Loan as to which such a defect in a constituent
document exists shall be the sole remedy respecting such defect available to
the Certificateholders or to the Certificate Trustee on their behalf.
Section 2.03. Representations, Warranties and Covenants of the Master
Servicers.
(a) Each Master Servicer hereby represents and warrants to the
Certificate Trustee as of the Closing Date that:
(i) (A) in the case of BAFSB, it is a federal savings bank duly
organized, validly existing and in good standing under the laws of the
United States of America and throughout the term of this Agreement will
remain a federal savings bank duly organized, validly existing and in
good standing under the laws of the United States of America, and (B) in
the case of Cendant, it is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey
and is in compliance with the laws of each State in which a Mortgaged
Property related to a Cendant Mortgage Loan is located to the extent
necessary to enable it to perform its obligations hereunder and is in
good standing as a foreign corporation in each jurisdiction in which the
nature of its business or the properties owned or leased by it make such
qualification necessary, except where any failure to qualify would not
have a material adverse effect on Cendant, the Trusts, the Certificates
or the Certificateholders, and throughout the term of this Agreement
will remain a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey and in compliance
with the laws of such states and in good standing as a foreign
corporation in each such jurisdiction; and in the case of each Master
Servicer, it has the corporate power and authority to perform its
obligations under this Agreement;
(ii) The execution and delivery of this Agreement have been duly
authorized by all requisite corporate action;
(iii) This Agreement, assuming due authorization, execution, and
delivery by the other parties hereto, will constitute its legal, valid
and binding obligation, enforceable in accordance with its terms, except
only as such enforcement may be limited by applicable Debtor Relief Laws
and that certain equitable remedies may not be available regardless of
whether enforcement is sought in equity or at law;
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(iv) Its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not (A)
violate its charter or articles of incorporation, as applicable, or
bylaws (B) to its knowledge, violate any law or regulation, or any
administrative or judicial 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 it is a
party or which may be applicable to it or any of its assets;
(v) To its best knowledge, after reasonable investigation, it is
not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or
governmental agency, which default would reasonably be expected to have
consequences that would materially and adversely affect its financial
condition or operations or its performance hereunder;
(vi) It does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in
this Agreement to be performed by it;
(vii) The consummation of the transactions contemplated by this
Agreement is in the ordinary course of its business; and
(viii) No litigation is pending or, to its best knowledge,
threatened against it, which could be reasonably expected to materially
and adversely affect its entering into this Agreement or performing its
obligations under this Agreement or which would have a material adverse
effect on its financial condition.
Section 2.04 Assignment of Interest in the Mortgage Loan Purchase
Agreement.
(a) The Depositor hereby assigns to the Certificate Trustee all of
its right, title and interest in the Mortgage Loan Purchase Agreement and the
Assignment Agreement, provided that the Depositor retains a joint and several
right in the event of breach of the representations, warranties and covenants
of BSMCC under the Mortgage Loan Purchase Agreement, to enforce the provisions
thereof and to seek all or any available remedies; and provided further that
this shall not be deemed an agreement or requirement on the part of the
Depositor to pursue any such remedies; provided, further, that the obligations
of BSMCC to substitute or repurchase a Mortgage Loan shall be the Certificate
Trustee's and the Certificateholders' sole remedy for any breach thereof. At
the request of the Certificate Trustee, the Depositor shall take such actions
as may be necessary to enforce the above right, title and interest on behalf of
the Certificate Trustee and the Certificateholders or shall execute such
further documents as the Certificate Trustee may reasonably require in order to
enable the Certificate Trustee to carry out such enforcement.
(b) If the Depositor, a Master Servicer, the Custodian or the
Certificate Trustee discovers a breach of any of the representations and
warranties set forth in Exhibit C and such breach existed on the date the
representation and warranty was made, which breach materially and adversely
affects the value of the interests of Certificateholders or the Certificate
Trustee in the related Mortgage Loan, the party discovering the breach shall
give prompt written notice of the breach to BSMCC and
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the other parties. Within 90 days after its discovery or receipt of notice
that such breach has occurred (whichever occurs earlier), BSMCC will cure the
breach in all material respects or, subject to Section 2.05, will purchase the
Mortgage Loan or any property acquired with respect thereto from the
Certificate Trustee; provided, however, that if there is a breach of any
representation set forth in Exhibit C and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then BSMCC will pay, in
lieu of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. (If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to BSMCC to the extent
not required by law to be paid to the borrower.) Any such purchase by BSMCC
shall be made by providing an amount equal to the Repurchase Price to the
Certificate Trustee for deposit in the Certificate Account and the Certificate
Trustee, upon deposit of the Repurchase Price in the Certificate Account and of
written notification detailing the components of such Repurchase Price, shall
cause the Custodian to release to BSMCC the related Mortgage File and shall
execute and deliver all instruments of transfer or assignment furnished to it
by BSMCC, without recourse, as are necessary to vest in BSMCC title to and
rights under the Mortgage Loan or any property acquired with respect thereto.
Such purchase shall be deemed to have occurred on the date on which the
Repurchase Price in available funds is received by the Certificate Trustee.
The Certificate Trustee shall amend the applicable Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the applicable Master
Servicer, the Custodian and the Rating Agencies of such amendment. Enforcement
of the obligation of BSMCC, to purchase (or substitute a Substitute Mortgage
Loan, pursuant to Section 2.05, for) any Mortgage Loan or any property acquired
with respect thereto (or pay the Repurchase Price as set forth in the above
proviso) as to which a breach has occurred and is continuing shall constitute
the sole remedy respecting such breach available to the Certificateholders or
the Certificate Trustee on their behalf.
Section 2.05. Substitution of Mortgage Loans. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to Sections 2.02 or 2.04, BSMCC may, no later than the date by which
such purchase by BSMCC would otherwise be required, tender to the Custodian on
behalf of the Certificate Trustee a Substitute Mortgage Loan accompanied by an
Officer's Certificate of BSMCC that such Substitute Mortgage Loan conforms to
the requirements set forth in the definition of "Substitute Mortgage Loan";
provided, however, that substitution pursuant to this Section 2.05 in lieu of
purchase shall not be permitted after the termination of the two-year period
beginning on the Startup Day. The Certificate Trustee shall cause the
Custodian to examine the Mortgage File for any Substitute Mortgage Loan in the
manner set forth in Section 2.02(a) and shall notify the related Master
Servicer in writing, within five Business Days after receipt, whether or not
the documents relating to the Substitute Mortgage Loan satisfy the requirements
set forth in Section 2.02(a). Within two Business Days after such
notification, BSMCC is required to provide to the Certificate Trustee for
deposit in the Certificate Account the amount, if any, by which the Outstanding
Principal Balance as of the next preceding Due Date of the Mortgage Loan for
which substitution is being made, after giving effect to Scheduled Principal
due on such date, exceeds the Outstanding Principal Balance as of such date of
the Substitute Mortgage Loan, after giving effect to Scheduled Principal due on
such date, which amount shall be treated for the purposes of this Agreement as
if it were the payment by BSMCC of the Repurchase Price for the purchase of a
Mortgage Loan by BSMCC. After such notification to BSMCC and, if any such
excess exists, upon receipt of such deposit, the Certificate Trustee shall
accept such
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Substitute Mortgage Loan, which shall thereafter be deemed to be a Mortgage
Loan, hereunder. In the event of such a substitution, accrued interest on the
Substitute Mortgage Loan for the month in which the substitution occurs and any
Principal Prepayments made thereon during such month shall be the property of
the related Trust and accrued interest for such month on the Mortgage Loan for
which the substitution is made and any Principal Prepayments made thereon
during such month shall be the property of BSMCC. The Scheduled Principal on a
Substitute Mortgage Loan due on the Due Date in the month of substitution shall
be the property of BSMCC and the Scheduled Principal on the Mortgage Loan for
which the substitution is made due on such Due Date shall be the property of
the related Trust. Upon acceptance of the Substitute Mortgage Loan, the
Certificate Trustee shall cause the Custodian to release to BSMCC the Mortgage
File related to any Mortgage Loan released pursuant to this Section 2.05 and
shall execute and deliver all instruments of transfer or assignment, without
recourse, in form as provided to it as are necessary to vest in BSMCC title to
and rights under any Mortgage Loan released pursuant to this Section 2.05.
BSMCC shall deliver the documents related to the Substitute Mortgage Loan in
accordance with the provisions of Sections 2.01(c) and 2.02(b), with the date
of acceptance of the Substitute Mortgage Loan deemed to be the Closing Date for
purposes of the time periods set forth in those Subsections. The
representations and warranties set forth in Exhibit C shall be deemed to have
been made by BSMCC with respect to each Substitute Mortgage Loan as of the date
of acceptance of such Mortgage Loan by the Custodian on behalf of the
Certificate Trustee. The Certificate Trustee shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to each Master Servicer, the Custodian and the Rating
Agencies.
Section 2.06. Representations and Warranties Concerning the Depositor.
The Depositor hereby represents and warrants to the Certificate Trustee and
each Master Servicer as follows:
(i) the Depositor (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to do
business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Depositor's business as
currently conducted or on the Depositor's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(ii) the Depositor has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(iii) 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; and 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 by-laws of the Depositor, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the
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Depositor's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(iv) 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
those consents, approvals, notices, registrations or other actions as
have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Depositor and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Depositor enforceable against it in accordance with its terms, except
only as such enforcement may be limited by applicable Debtor Relief Laws
and that certain equitable remedies may not be available regardless of
whether enforcement is sought in equity or at law;
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Depositor, threatened against the Depositor, before
or by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
reasonable judgment of the Depositor will be determined adversely to the
Depositor and would, if determined adversely to the Depositor,
materially and adversely affect the Depositor's ability to enter into
this Agreement or perform its obligations under this Agreement; and the
Depositor is not in default with respect to any order of any court,
administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement; and
(vii) immediately prior to the transfer and assignment to the
Certificate Trustee, each Mortgage Note and each Mortgage were not
subject to an assignment or pledge, and the Depositor had good and
marketable title to and was the sole owner thereof and had full right to
transfer and sell such Mortgage Loan to the Certificate Trustee free and
clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest.
Section 2.07. The Custodian. Notwithstanding anything to the contrary
in this Agreement, the parties hereto acknowledge that the functions of the
Certificate Trustee with respect to the acceptance, inspection, custody and
release of the Mortgage Files pursuant to Article II shall be performed by the
Custodian. The Custodian shall receive no separate fee for performing such
services. The Certificate Trustee shall not be liable for any acts or
omissions of the Custodian. The parties hereto hereby appoint First Chicago
National Processing Corporation, and First Chicago National Processing
Corporation hereby accepts such appointment, to serve as Custodian hereunder.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicers to Master Service.
(a) Notwithstanding anything contained herein to the contrary, the
parties hereto agree that BAFSB shall be the Master Servicer of the BA Mortgage
Loans and Cendant shall be the Master Servicer of the Cendant Mortgage Loans.
Each Master Servicer shall supervise the servicing and administration of the
Mortgage Loans for which it is the Master Servicer and any related REO Property
in accordance with the terms of this Agreement and its normal servicing
practices, which shall generally conform to the standards of FNMA and shall
have full authority to do anything it reasonably deems appropriate or desirable
in connection with the supervision of such servicing and administration. Each
Master Servicer may perform its servicing responsibilities hereunder through
other agents or independent contractors, but shall not thereby be released from
any of its responsibilities as hereinafter set forth. The authority of a
Master Servicer, in its capacity as master servicer, shall include, without
limitation, the power to consult with and advise any sub-servicer regarding
administration of a related Mortgage Loan. The authority of a Master Servicer
shall include, in addition, the power on behalf of the Certificateholders, the
Certificate Trustee or any of them to (i) execute and deliver customary
consents or waivers and other instruments and documents, (ii) consent to
transfers of any related Mortgaged Property and assumptions of the related
Mortgage Notes and Security Instruments (in the manner provided in this
Agreement) and (iii) collect any Insurance Proceeds and Liquidation Proceeds
with respect to the related Mortgage Loans. Without limiting the generality of
the foregoing, each Master Servicer may, and is hereby authorized, and
empowered by the Certificate Trustee to, execute and deliver, on behalf of
itself, the Certificateholders, the Certificate Trustee, or any of them, any
instruments of satisfaction, cancellation, partial or full release, discharge
and all other comparable instruments, with respect to the Mortgage Loans for
which such Master Servicer is the master servicer, the related Insurance
Policies and the accounts related thereto, and the related Mortgaged
Properties. Each Master Servicer may exercise this power in its own name or in
the name of the Certificate Trustee.
(b) Notwithstanding the provisions of Subsection 3.01(a), no Master
Servicer shall take any action which, in such Master Servicer's reasonable
business judgment, would be inconsistent with procedures and practices required
by FNMA, with the interest of the Certificate Trustee or the Certificateholders
in the related Mortgage Loans or with the rights and interests of the
Certificate Trustee or the Certificateholders under this Agreement.
(c) The Certificate Trustee shall furnish each Master Servicer with
any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable such Master Servicer to service and administer the
related Mortgage Loans and REO Property.
Section 3.02. Delivery of Documents to Successor Master Servicers. In
the event that the Certificate Trustee or its designee as a successor master
servicer for the Certificate Trustee assumes the servicing obligations of a
Master Servicer under Section 8.02, upon the reasonable request of the
Certificate Trustee or such designee as a successor master servicer, such
Master Servicer shall at its own expense deliver to the Certificate Trustee, or
at its written request to such designee, all
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documents and records, electronic or otherwise in such Master Servicer's
possession, relating to the related Mortgage Loans or REO Property and an
accounting of amounts collected and held by it, if any, and will otherwise
cooperate and use its reasonable best efforts to effect the orderly and
efficient transfer of the master servicing responsibilities hereunder to the
Certificate Trustee, or at its written request to such designee as a successor
master servicer.
Section 3.03. Collection of Mortgage Loan Payments.
(a) Each Master Servicer shall make its reasonable best efforts to
collect all payments required under the terms and provisions of the related
Mortgage Loans and will follow collection procedures comparable to the
collection procedures of FNMA-approved servicers. Consistent with the
foregoing, a Master Servicer may in its discretion (i) waive or permit to be
waived any late payment charge or assumption fee and (ii) suspend or
temporarily reduce or permit to be suspended or temporarily reduced Scheduled
Payments for a period of up to six months, or arrange or permit an arrangement
with a Mortgagor for a scheduled liquidation of delinquencies. In the event a
Master Servicer shall consent to the deferment of the due dates for Scheduled
Payments due on a related Mortgage Note, the related Master Servicer shall make
a Monthly Advance to the same extent as if such installment were due, owing and
delinquent and had not been deferred through liquidation of the Mortgaged
Property; provided, however, that the obligation of the Master Servicer to make
a Monthly Advance shall apply only to the extent that the Master Servicer
believes, in good faith, that such Monthly Advance is not a Nonrecoverable
Advance.
(b) A Master Servicer may not make any advances of amounts due in the
future with respect to a Mortgage Loan that it master services and shall not
permit, except as permitted in Section 3.08(a), (i) any modification with
respect to such Mortgage Loan that would change the Mortgage Interest Rate,
reduce or increase the principal balance (except for reductions resulting from
actual payments of principal) or change the final maturity date on such
Mortgage Loan or (ii) any modification, waiver or amendment of any term of such
Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) cause any Series REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions.
(c) Within five Business Days after a Master Servicer has determined
that all amounts which it expects to recover from or on account of a Mortgage
Loan that it master services have been recovered and that no further
Liquidation Proceeds will be received in connection therewith, such Master
Servicer shall provide to the Certificate Trustee a certificate of a Servicing
Officer that such Mortgage Loan became a Liquidated Mortgage Loan as of the
date of such determination.
Section 3.04. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
(a) Each Master Servicer will establish and maintain, in addition to
the Protected Accounts, one or more Servicing Accounts. Each Master Servicer
will deposit and retain therein all otherwise unapplied collections from the
Mortgagors under the Mortgage Loans that it master
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services, including amounts collected for the payment of taxes, assessments,
insurance premiums, or comparable items, as agent of such Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account designated as a "Mortgage Loan
Servicing Account," held in trust by the applicable Master Servicer as Trustee
of Taxes and Insurance Custodial Account for Mortgagors and for the applicable
Master Servicer (and its successors and assigns) acting on its own behalf and
for such Master Servicer, as agent for holders of various pass-through
securities and other interests in mortgage loans sold by it, and agent for
various mortgagors, as their interests may appear, or under such other
designation as may be permitted by the Certificate Trustee. The amount at any
time credited to a Servicing Account must be fully insured by the FDIC, or, to
the extent that such deposits exceed the limits of such insurance, such excess
must be (i) transferred to another fully insured account in another Designated
Depository Institution or (ii) if permitted by applicable law, invested in
Permitted Investments held in trust by the Master Servicer as described above
and maturing, or subject to redemption or withdrawal, no later than the date on
which such funds are required to be withdrawn, and in no event later than 45
days after the date of investment. The Master Servicers may establish
Servicing Accounts not conforming to the foregoing requirements to the extent
that such Servicing Accounts are Rating Agency Eligible Accounts. Withdrawals
of amounts from the Servicing Accounts may be made only to effect timely
payment of taxes, assessments, insurance premiums, or comparable items, to
transfer previously unapplied collections to a Protected Account, to reimburse
the applicable Master Servicer for any advances made with respect to such
items, to refund to any Mortgagors any sums as may be determined to be
overages, to pay interest, if required, to Mortgagors on balances in the
Servicing Accounts or to clear and terminate the Servicing Accounts at or any
time after the termination of this Agreement in accordance with Section 10.01.
Section 3.05. Access to Certain Documentation and Information Regarding
the Mortgage Loans. Each Master Servicer shall provide to the Certificate
Trustee and the Depositor access to the records and documentation regarding the
related Mortgage Loans and REO Property and the servicing thereof and to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC (to which the Certificate Trustee shall also provide) access to the
documentation regarding the related Mortgage Loans required by applicable
regulations, such access being afforded without charge but only upon reasonable
prior written request and during normal business hours at the offices of such
Master Servicer, the Custodian or the Certificate Trustee that are designated
by these entities; provided, however, that, unless otherwise required by law,
the Certificate Trustee, the Custodian or a Master Servicer shall not be
required to provide access to such records and documentation if the provision
thereof would violate the legal right to privacy of any Mortgagor; provided
further, however, that the Certificate Trustee and the Depositor shall
coordinate their requests for such access so as not to impose an unreasonable
burden on, or cause an interruption of, the business of a Master Servicer. The
Master Servicers, the Custodian and the Certificate Trustee shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that
covers their own actual out-of-pocket costs.
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Section 3.06. Maintenance of Primary Mortgage Insurance Policies;
Collection Thereunder. Each Master Servicer shall exercise its best reasonable
efforts to maintain and keep in full force and effect each Primary Mortgage
Insurance Policy by a Qualified Insurer, or other insurer satisfactory to the
Rating Agencies, with respect to each related conventional Mortgage Loan as to
which as of the Cut-off Date such Primary Mortgage Insurance Policy was in
effect (or, in the case of a Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Original Value of the related Mortgaged Property in an
amount at least equal to the excess of such original principal amount over 75%
of such Original Value until the principal amount of any such Mortgage Loan is
reduced below 80% of the Original Value or, based upon a new appraisal, the
principal amount of such Mortgage Loan represents less than 80% of the new
appraised value. The related Master Servicer shall effect the timely payment
of the premium on each Primary Mortgage Insurance Policy. The related Master
Servicer shall have the power to substitute for any Primary Mortgage Insurance
Policy another substantially equivalent policy issued by another Qualified
Insurer.
Section 3.07. Maintenance of Hazard Insurance and Fidelity Coverage.
(a) Each Master Servicer shall maintain and keep, with respect to
each related Mortgage Loan and each REO Property, in full force and effect
hazard insurance (fire insurance with extended coverage) equal to at least the
lesser of the Outstanding Principal Balance of the Mortgage Loan or the current
replacement cost of the Mortgaged Property, and containing a standard mortgagee
clause; provided, however, that the amount of hazard insurance may not be less
than the amount necessary to prevent loss due to the application of any
co-insurance provision of the related policy. Unless applicable state law
requires a higher deductible, the deductible on such hazard insurance policy
may be $1000 or 1% of the applicable amount of coverage, whichever is less. In
the case of a condominium unit or a unit in a planned unit development, the
required hazard insurance shall take the form of a multiperil policy covering
the entire condominium project or planned unit development, in an amount equal
to at least 100% of the insurable value based on replacement cost.
(b) Any amounts collected by a Master Servicer under any such hazard
insurance policy (other than amounts to be applied to the restoration or repair
of the related Mortgaged Property or amounts released to the related Mortgagor
in accordance with the Master Servicer's normal servicing procedures, the terms
of the related Mortgage Note, the related Security Instrument or applicable
law) shall be deposited initially in a Protected Account, for transmittal to
the Certificate Account, subject to withdrawal pursuant to Section 4.03.
(c) Any cost incurred by a Master Servicer in maintaining any such
hazard insurance policy shall not be added to the amount owing under the
related Mortgage Loan for the purpose of calculating monthly distributions to
Certificateholders, notwithstanding that the terms of such Mortgage Loan so
permit. Such costs shall be recoverable by such Master Servicer as a Servicing
Advance.
(d) No earthquake or other additional insurance is to be required of
any Mortgagor or maintained on REO Property other than pursuant to such
applicable laws and regulations as shall at any time be in force and shall
require such additional insurance. Each year, in accordance with
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standards and procedures required by ▇▇▇▇▇▇▇ Mac, each Master Servicer shall
perform a review of the Mortgage Loans master serviced by it to determine
which, if any, of the related Mortgaged Properties are located in a federally
designated special flood hazard area and for each Mortgaged Property found to
be located in a federally designated special flood hazard area, the related
Master Servicer shall use its best reasonable efforts to cause with respect to
the related Mortgage Loans and each REO Property, flood insurance (to the
extent available and in accordance with mortgage servicing industry practice)
to be maintained. Such flood insurance shall cover the related Mortgaged
Property, including all items taken into account in arriving at the Appraised
Value on which the Mortgage Loan was based, and shall be in an amount equal to
the lesser of (i) the Outstanding Principal Balance of the related Mortgage
Loan and (ii) the minimum amount required under the terms of coverage to
compensate for any damage or loss on a replacement cost basis, but not more
than the maximum amount of such insurance available for the related Mortgaged
Property under either the regular or emergency programs of the National Flood
Insurance Program (assuming that the area in which such Mortgaged Property is
located is participating in such program). Unless applicable state law
requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.
(e) If insurance on each REO Property has not been maintained
complying with Sections 3.07(a) and (d) and there shall have been a loss which
would have been covered by such insurance had it been maintained, the related
Master Servicer shall pay for any necessary repairs of such REO Property.
(f) The related Master Servicer shall present, if it is a permitted
claimant, claims under the related hazard insurance or flood insurance policy.
(g) Each Master Servicer shall obtain and maintain an errors and
omissions insurance policy covering such Master Servicer's officers, employees
and other persons acting on its behalf in connection with its activities under
this Agreement. The amount of coverage shall be at least equal to the coverage
acceptable to FNMA or ▇▇▇▇▇▇▇ Mac to service loans for it or otherwise in an
amount as is commercially available at a cost that is generally not regarded as
excessive by industry standards. Each Master Servicer shall maintain at its
own expense and for the duration of this Agreement a fidelity bond in such
amount as is customary for master servicers of mortgage loans. Each Master
Servicer shall promptly notify the Certificate Trustee of any material change
in the terms of its bond or policy. If any such bond of a Master Servicer
ceases to be in effect, such Master Servicer shall use its best efforts to
obtain a comparable replacement bond or policy, as the case may be. Any
amounts relating to the Mortgage Loans collected under such bond or policy
shall be remitted to the Certificate Account to the extent that such amounts
have not previously been paid to such account.
Section 3.08. Due-on-Sale Clauses; Assumption Agreements.
(a) In any case in which a Master Servicer is notified that a
Mortgaged Property relating to a Mortgage Loan that it master services has been
or is about to be conveyed by the Mortgagor, such Master Servicer shall enforce
any due-on-sale clause contained in the related Security Instrument to the
extent permitted under the terms of the related Mortgage Note and by applicable
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law unless such Master Servicer reasonably believes such enforcement is likely
to result in legal action by the Mortgagor. If such Master Servicer reasonably
believes that such due-on-sale clause cannot be enforced under applicable law
or if the related Mortgage Loan does not contain a due-on-sale clause, such
Master Servicer may consent to a conveyance subject to the lien of the Security
Instrument, and to take or enter into an assumption agreement from or with the
Person to whom such Mortgaged Property has been or is about to be conveyed,
pursuant to which such Person becomes liable under the related Mortgage Note
and unless prohibited by applicable state law, such Mortgagor remains liable
thereon, on condition, however, that the related Mortgage Loan shall continue
to be covered (if so covered before such Master Servicer enters into such
agreement) by any Primary Mortgage Insurance Policy. Such Master Servicer
shall notify the Certificate Trustee, whenever possible, before the completion
of such assumption agreement, and shall forward to the Custodian on behalf of
the Certificate Trustee the original copy of such assumption agreement, which
copy shall be added by the Custodian to the related Mortgage File and which
shall, for all purposes, be considered a part of such Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. In
connection with any such assumption agreement, the interest rate on the related
Mortgage Loan shall not be changed and no other material alterations in the
Mortgage Loan shall be made. Any fee or additional interest collected by a
Master Servicer for consenting to any such conveyance or entering into any such
assumption agreement may be retained by such Master Servicer as additional
master servicing compensation.
(b) Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations under this Agreement by reason of any
assumption by operation of law of a Mortgage Loan that it master services or
any conveyance by the Mortgagor of the related Mortgaged Property or assumption
of a Mortgage Loan which such Master Servicer reasonably believes, based on
prudent servicing standards, it may be restricted by law from preventing for
any reason whatsoever or if the exercise of such right would impair or threaten
to impair any recovery under any applicable Insurance Policy, or, in such
Master Servicer's judgment, be reasonably likely to result in legal action by
the Mortgagor or would otherwise adversely affect the Certificateholders.
Section 3.09. Realization upon Defaulted Mortgage Loans. (a) Each
Master Servicer shall foreclose upon or otherwise comparably convert the
ownership of properties securing any Mortgage Loans that it master services
that come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.03; provided, however, that a Master Servicer shall not foreclose
upon or otherwise comparably convert a Mortgaged Property if there is evidence
of environmental hazards or toxic waste thereon and such Master Servicer
determines it would be imprudent to do so or not in accordance with appropriate
servicing standards. A Master Servicer can conclusively rely on results of
third party inspections from parties it reasonably believes are qualified to
conduct such inspections. In connection with such foreclosure or other
conversion, the related Master Servicer shall use its best reasonable efforts
to preserve REO Property and to realize upon related defaulted Mortgage Loans
in such manner as to maximize the receipt of principal and interest by the
Certificateholders, taking into account, among other things, the timing of
foreclosure and the considerations set forth in Section 3.08(b). The foregoing
is subject to the proviso that a Master Servicer shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it
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determines in good faith (i) that such restoration or foreclosure will increase
the proceeds of liquidation of the related Mortgage Loan to Certificateholders
after reimbursement to itself for such expenses and (ii) that such expenses
will be recoverable to it either through Liquidation Proceeds (respecting which
it shall have priority for purposes of reimbursements from the Certificate
Account pursuant to Section 4.03) or through Insurance Proceeds (respecting
which it shall have similar priority). A Master Servicer shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof (as well
as its normal servicing compensation), and to receive Excess Liquidation
Proceeds as additional servicing compensation, to the extent that transfers or
withdrawals from the Certificate Account with respect thereto are permitted
under Section 4.03. Any income from or other funds (net of any income taxes)
generated by REO Property shall be deemed for purposes of this Agreement to be
Insurance Proceeds.
(b) No Trust shall acquire any real property (or any personal
property incident to such real property) except in connection with a default or
imminent default of a Mortgage Loan. In the event that a Trust acquires any
real property (or personal property incident to such real property) in
connection with a default or imminent default of a Mortgage Loan, such property
shall be disposed of by such Trust before the close of the third taxable year
following the taxable year in which such Trust acquired such property (the
"grace period") unless the Certificate Trustee shall have received a REMIC
Opinion with respect to such longer retention or the applicable Master Servicer
applies for and receives an extension of the grace period under Section
856(e)(3) of the Code, in which case such grace period described above will be
extended by the period set forth in such REMIC Opinion or approved application,
as the case may be. The cost of any such REMIC Opinion shall be borne by the
related Trust.
Section 3.10. Certificate Trustee to Cooperate; Release of Mortgage
Files.
(a) Upon payment in full of any Mortgage Loan or the receipt by the
related Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the related Master Servicer will
immediately notify the Custodian by a certification signed by a Servicing
Officer in the Form of Exhibit D (which certification shall include a statement
to the effect that all amounts received or to be received in connection with
such payment which are required to be deposited in the Certificate Account have
been or will be so deposited in such account) and shall request delivery to the
applicable Master Servicer of the Mortgage File. Upon receipt of such
certification and request, the Certificate Trustee shall cause the Custodian to
within five Business Days release the related Mortgage File to the applicable
Master Servicer and execute and deliver to the applicable Master Servicer,
without recourse, the request for reconveyance, deed of reconveyance or release
or satisfaction of mortgage or such instrument releasing the lien of the
Security Instrument (furnished by the related Master Servicer), together with
the Mortgage Note with written evidence of cancellation thereon. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Certificate Account. If upon receipt
of a properly executed request for release the Custodian fails to release the
Mortgage File to the applicable Master Servicer within the time limits required
under this Agreement, the Custodian shall indemnify such Master Servicer for
any penalties, charges, costs or damages payable as a result of such failure.
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(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan or collection under a Required Insurance
Policy, the Master Servicer with respect to such Mortgage Loan shall deliver to
the Certificate Trustee and the Custodian a Request for Release signed by a
Servicing Officer on behalf of such Master Servicer in substantially the form
attached as Exhibit D hereto. Upon receipt of the Request for Release, the
Certificate Trustee shall cause the Custodian to deliver the Mortgage File to
such Master Servicer.
(c) The applicable Master Servicer shall cause each Mortgage File
released to it pursuant to Section 3.10(b) to be returned to the Custodian when
the need therefor no longer exists, unless the related Mortgage Loan has become
a Liquidated Mortgage Loan and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account or such Mortgage
File is being used to pursue foreclosure or other legal proceedings. Prior to
return of a Mortgage File to the Custodian, the Master Servicer to whom such
file was delivered shall retain such file in its control unless the Mortgage
File has been delivered to an attorney, or to a public trustee or other public
official as required by law, to initiate or pursue legal action or other
proceedings for the foreclosure of the related Mortgaged Property either
judicially or non-judicially, and such Master Servicer has delivered to the
Custodian a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File was delivered and the purpose
or purposes of such delivery. If a Mortgage Loan becomes a Liquidated Mortgage
Loan, the applicable Master Servicer shall deliver the Request for Release with
respect thereto to the Custodian upon deposit of the related Liquidation
Proceeds in the Certificate Account.
(d) The Certificate Trustee shall execute and deliver to the related
Master Servicer any court pleadings, requests for trustee's sale or other
documents necessary or desirable to (i) the foreclosure or trustee's sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the related Mortgage Note or Security
Instrument; (iii) obtain a deficiency judgment against the related Mortgagor;
or (iv) enforce any other rights or remedies provided by such Mortgage Note or
Security Instrument or otherwise available at law or in equity. Together with
such documents or pleadings, such Master Servicer shall deliver to the
Certificate Trustee a certificate of a Servicing Officer in which it requests
the Certificate Trustee to execute the pleadings or documents. The certificate
shall certify and explain the reasons for which the pleadings or documents are
required. It shall further certify that the Certificate Trustee's execution
and delivery of the pleadings or documents will not invalidate any insurance
coverage under the Required Insurance Policies or invalidate or otherwise
affect the lien of the related Security Instrument, except for the termination
of such a lien upon completion of the foreclosure or trustee's sale.
Section 3.11. Master Servicing Compensation.
(a) As compensation for its activities hereunder, each Master
Servicer shall be entitled to receive the applicable Master Servicing Fee from
full payments of accrued interest on each Mortgage Loan for which it is acting
as a Master Servicer, subject to its Master Servicer's obligation to pay
Compensating Interest Payments pursuant to Section 6.04.
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(b) Each Master Servicer may retain additional servicing compensation
in the form of assumption fees, tax service fees, fees for statement of account
or payoff, late payment charges, interest on amounts deposited in any Accounts
maintained by it or Permitted Investments of such amounts, or otherwise. Each
Master Servicer is also entitled to receive as additional servicing
compensation any Excess Liquidation Proceeds with respect to Mortgage Loans
that it master services. Each Master Servicer shall be required to pay all
expenses it incurs in connection with its activities under this Agreement, and
shall not be entitled to reimbursement therefor except as provided in this
Agreement. Expenses to be paid by each Master Servicer under this Subsection
3.11(b) shall include payment of the expenses of the accountants retained by it
pursuant to Section 3.13.
Section 3.12. Annual Statement of Compliance. Within 120 days after
December 31st of each year, commencing December 1998, each Master Servicer, at
its own expense, shall deliver to the Certificate Trustee, with a copy to the
Rating Agencies, a Servicing Officer's certificate stating, as to the signer
thereof, that (i) a review of the activities of such Master Servicer during the
preceding fiscal year or applicable portion thereof and of performance under
this Agreement has been made under such officer's supervision, (ii) to the best
of such officer's knowledge, based on such review, such Master Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof including
the steps being taken by such Master Servicer to remedy such default; (iii) a
review of the reports required to be furnished by such Master Servicer pursuant
to this Agreement during such Master Servicer's most recently ended fiscal year
on or prior to such December 31st has been made under such Servicing Officer's
supervision; and (iv) to the best of the Servicing Officer's knowledge, based
on his review of such reports (unless the Servicing Officer has reason to
believe that reliance on such reports is not justified), either nothing has
come to the attention of such Servicing Officer that would cause such Servicing
Officer to believe that such Master Servicer has failed to perform and fulfill
its duties, responsibilities and obligations under this Agreement in all
material respects throughout the year, or, if there has been a default in
performance or fulfillment of any such duties, responsibilities or obligations,
specifying the nature and status of each such default known to the Servicing
Officer.
Section 3.13. Annual Independent Public Accountants' Servicing Report.
(a) Within 120 days after December 31st of each year, commencing
December 1998, each Master Servicer, at its expense, shall furnish to the
Certificate Trustee and the Depositor a copy of such Master Servicer's audited
financial statements for the year most recently ended.
(b) Promptly after its receipt, each Master Servicer, at its expense,
shall furnish to the Certificate Trustee a copy of the most recently available
letter or letters from one or more firms of Independent certified public
accountants who are members of the American Institute of Certified Public
Accountants reporting the results of such firm's examination of the servicing
procedures of such Master Servicer in accordance with the requirements of the
Uniform Single Attestation Program for Mortgage Bankers, or such other program
as may be set forth in any such letter.
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Section 3.14. REMIC-Related Covenants. For as long as any Series REMIC
shall exist, each Master Servicer with respect to the Mortgage Loans included
in such Series REMIC and the Certificate Trustee shall act in accordance
herewith to assure continuing treatment of each such Series REMIC as a REMIC,
and the Certificate Trustee shall comply with any directions of the applicable
Master Servicer to assure such continuing treatment. In particular, the
Certificate Trustee shall not (a) sell or permit the sale of all or any portion
of the Mortgage Loans or of any Permitted Investment unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Certificate Trustee has received a REMIC Opinion prepared at the expense of the
related Trust; and (b) other than with respect to a substitution pursuant to
Section 2.05, accept any contribution to any Series REMIC after the Startup Day
without receipt of a REMIC Opinion.
Section 3.15. Additional Information. Each Master Servicer agrees to
furnish the Depositor, at no expense to such Master Servicer, from time to time
upon reasonable request, such further information, reports and financial
statements as the Depositor deems appropriate to prepare and file all necessary
reports with the Securities and Exchange Commission.
Section 3.16. Master Servicer Reports.
(a) On or before the Determination Date, each Master Servicer shall
provide to the Certificate Trustee, with respect to the Mortgage Loans such
Master Servicer services and the Mortgage Loans in each Mortgage Loan Group and
the related REO Property, respectively, a Master Servicer Report in such
electronic format as the Certificate Trustee may reasonably request and in such
hardcopy format as each Master Servicer and the Certificate Trustee shall agree
which, if there are sub-servicers, shall be based upon reports from sub-
servicers, if any, received by a Master Servicer on or before the seventh
Business Day of such month with respect to the related Mortgage Loans and
related REO Property in each Mortgage Loan Group and containing the following
information (in respect of the REO Property, only such information which is
applicable) (provided that the information marked with an "*" below may be
provided by a Master Servicer solely in a hardcopy format):
*(i) Aggregate deposits to each subaccount of the Certificate
Account since the date of the proper statement, stated separately for
each category of deposit specified in Section 4.02 and each category of
withdrawal specified in Section 4.03;
(ii) Amount of each Group Available Funds expected for the
related Distribution Date and attributable to each of the following
categories:
(A) Scheduled Principal;
(B) Principal Prepayments (stated separately for (u) partial
prepayments, (v) full prepayments, (w) Net Liquidation
Proceeds, stating Liquidation Proceeds and Liquidation
Expenses separately), *(x) Insurance Proceeds, *(y) the
Repurchase Price in connection with the purchase of a
Mortgage Loan, and *(z) any cash deposit in connection
with the substitution of a Mortgage Loan;
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(C) regularly scheduled interest on the Mortgage Loans;
*(D) Monthly Advances made by such Master Servicer;
*(E) Certificate Account Advances;
(F) Compensating Interest Payments; and
*(G) reimbursements in connection with losses on Permitted
Investments.
(iii) aggregate Outstanding Principal Balances of the related
Mortgage Loans in such Mortgage Loan Group as of the related Due Date,
without giving effect to payments due on such date;
(iv) Realized Losses with respect to each Mortgage Loan Group
for the prior calendar month;
(v) Aggregate Scheduled Principal Balance of the related
Mortgage Loans in such Mortgage Loan Group as of the related Due Date;
*(vi) book value of any collateral acquired by means of
foreclosure, grant of deed in lieu of foreclosure or otherwise in
respect of any related Mortgage Loan in such Mortgage Loan Group;
*(vii) number and aggregate principal balance of related Mortgage
Loans in each Mortgage Loan Group which are 30, 60, 90 and 120 days
delinquent as calculated by such Master Servicer, those which are in
foreclosure, those with respect to which the related Mortgagor is
bankrupt, and those which are REO Property;
(viii) Interest Shortfall with respect to the related
Distribution Date and portion thereof resulting from Voluntary Principal
Prepayments in full or the provisions of the Relief Act;
(ix) amount if any, by which the aggregate of payments of
Scheduled Principal and interest on the related Mortgage Loans in such
Mortgage Loan Group that were due on the related Due Date and
delinquent, other than as a result of the Relief Act, as of the 18th day
of such month exceeds the sum of the Monthly Advances with respect to
such Mortgage Loans to be made by such Master Servicer and Certificate
Account Advances for such Distribution Date;
*(x) applicable aggregate Master Servicing Fee with respect to
such Mortgage Loans for the related Due Period; and
(xi) such other information regarding each Mortgage Loan in
such Mortgage Loan Group, including, but not limited to, an updated
schedule of the Scheduled Principal
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Balances of such Mortgage Loans as of the related Due Date, in such
electronic format as may be reasonably requested by the Certificate
Trustee and, if requested, in such hardcopy format as such Master
Servicer and the Certificate Trustee shall agree.
In addition to the information listed above, each Master Servicer shall supply
to the Certificate Trustee in a timely manner any and all information necessary
for the Certificate Trustee to calculate the statements it is required to make
pursuant to the Series Supplement.
(b) Not later than three Business Days after each Distribution Date,
the Certificate Trustee shall provide written confirmation to each Master
Servicer that the Certificate Trustee's books and records are in accordance
with the updated schedule of the Scheduled Principal Balances of the related
Mortgage Loans provided that month by such Master Servicer, and if
discrepancies exist, the Certificate Trustee shall list such discrepancies on a
schedule thereto.
ARTICLE IV
ACCOUNTS
Section 4.01. Protected Accounts.
(a) Each Master Servicer shall establish and maintain one or more
Protected Accounts complying with the requirements set forth in this Section
4.01, with records to be kept with respect thereto on a Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited within two Business
Days after receipt all collections of principal and interest with respect to
any Mortgage Loan and with respect to any REO Property received by such Master
Servicer, or a sub-servicer engaged by such Master Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds and advances
made from the Master Servicer's own funds (less servicing compensation as
permitted by Subsection 3.11(a)) together with all other amounts to be
deposited in the Protected Accounts. Each Master Servicer is hereby authorized
to make withdrawals from and deposits to the Protected Accounts maintained by
it for purposes required or permitted by this Agreement. All Protected
Accounts shall be held in a Designated Depository Institution and segregated on
the books of such institution. The amount at any time credited to a Protected
Account shall be fully insured by the FDIC or, to the extent that such balance
exceeds the lesser of $100,000 or the limits of such insurance, such excess
must be transferred to the Certificate Account or invested in Permitted
Investments or may be deposited in a Rating Agency Eligible Account in the name
of the Certificate Trustee for the benefit of Certificateholders and, except as
provided in the next sentence, not commingled with any other funds. Each
Master Servicer may transfer funds to other accounts (which shall for purposes
hereof be deemed to be Protected Accounts), commingle accounts or establish
Protected Accounts not conforming to the foregoing requirements, to the extent
that such other accounts or Protected Accounts meet the requirements of each of
the Rating Agencies for the maintenance of the ratings on the Bonds.
The Protected Accounts established by BAFSB may contain funds that
belong to one or more trust funds created for mortgage pass-through
certificates of other series and may contain other funds respecting payments on
mortgage loans owned or serviced by BAFSB on behalf of others; provided,
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however, that if the long term deposit rating of BAFSB falls below "A1" by
▇▇▇▇▇'▇, then either (a) BAFSB shall establish a separate Protected Account,
and shall segregate and hold funds collected and received pursuant to each BA
Mortgage Loan separate and apart from any such funds collected and received by
BAFSB with respect to any mortgage loans other than the BA Mortgage Loans,
which shall at all times be insured by the FDIC up to the FDIC insurance
limits, or must be invested in Permitted Investments for the benefit of the
Purchaser or (b) BAFSB must obtain written consent of ▇▇▇▇▇'▇ to continue to
maintain the Protected Accounts in accordance with this Section.
Notwithstanding such commingling of funds, BAFSB shall keep records that
accurately reflect the funds on deposit in a Protected Account that have been
identified by it as being attributable to the BA Mortgage Loans.
Amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the applicable Master Servicer for the benefit of
Certificateholders and, except as provided in the preceding two paragraphs, not
commingled with any other funds, such Permitted Investments to mature, or to be
subject to redemption or withdrawal, no later than the date on which such funds
are required to be withdrawn for deposit in the Certificate Account, and shall
be held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the related
Master Servicer as additional compensation for its obligations under this
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of such Master Servicer. Such Master Servicer shall deposit the amount of
any such loss in the related Protected Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Remittance Date.
(b) On or before each Master Servicer Remittance Date, each Master
Servicer shall withdraw from the applicable Protected Accounts and shall
immediately remit to the Certificate Account amounts representing the following
collections and payments (other than with respect to principal of or interest
on the Mortgage Loans with respect to which it is Master Servicer due on or
before the Cut-off Date):
(i) Scheduled Payments on such Mortgage Loans received by it
or by any sub-servicer engaged by it or any related portion thereof
advanced by such Master Servicer or such sub-servicer which were due on
or before the related Due Date, net of the amount thereof comprising the
applicable Master Servicing Fee and less any amounts to be withdrawn
later by the applicable Master Servicer from the applicable Buydown Fund
Accounts;
(ii) Full Principal Prepayments and any Liquidation Proceeds
with respect to such Mortgage Loans received by such Master Servicer or
by its sub-servicer with respect to such Mortgage Loans in the related
Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the applicable Master
Servicing Fee due such Master Servicer, to the extent such amounts
exceed the related Compensating Interest Payments;
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(iii) Partial prepayments of principal with respect to such
Mortgage Loans received by such Master Servicer or by its sub-servicer
in the related Prepayment Period;
(iv) Any amount to be used as a Certificate Account Advance;
and
(v) Any amount withdrawn from a Buydown Fund Account in
respect of a Buydown Loan as provided in Section 4.04.
(c) Withdrawals may be made from a Protected Account only to (i) make
remittances as provided in Section 4.01(b); (ii) reimburse the applicable
Master Servicer for advances of principal and interest which have been
recovered by subsequent collection from the related Mortgagor; (iii) remove
amounts deposited in error; (iv) remove fees, charges or other such amounts
deposited on a temporary basis; or (v) clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01. As provided in
Section 4.02(b) certain amounts otherwise due to the Master Servicer may be
retained by it and need not be deposited in the Certificate Account.
Section 4.02. Certificate Account.
(a) The Certificate Trustee shall establish and maintain in the name
of the Certificate Trustee, for the benefit of the Certificateholders, the
Certificate Account as a segregated non-interest bearing trust account or
accounts. The Certificate Trustee shall maintain detailed transaction entries
with respect to each Series (therein called "subaccounts") reflecting the funds
held for each such Series in the Certificate Account. The Certificate Trustee
will deposit in the Certificate Account, as identified by the applicable Master
Servicer, as received, the following amounts and shall account for such amounts
by way of subaccounts with respect to each Series:
(i) Any amounts withdrawn from the Protected Accounts pursuant
to Section 4.01(b) or from a Servicing Account pursuant to Section
3.04(b);
(ii) Any Monthly Advance and any Compensating Interest
Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received by
or on behalf of the applicable Master Servicer which were not deposited
in a Protected Account less any amounts to be withdrawn later by the
applicable Master Servicer from the applicable Buydown Fund Accounts;
(iv) The Repurchase Price with respect to any Mortgage Loans or
REO Property purchased by BSMCC pursuant to Sections 2.02 or 2.04, any
amounts which are to be treated pursuant to Section 2.04 as the payment
of such a Repurchase Price, and all proceeds of any Mortgage Loans or
property acquired with respect thereto repurchased by BSMCC or its
designee or the Depositor pursuant to Section 10.01;
(v) Any amounts required to be deposited with respect to
losses on Permitted Investments; and
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(vi) Any other amounts received by or on behalf of a Master
Servicer or the Certificate Trustee and required to be deposited in the
Certificate Account pursuant to this Agreement.
(b) All amounts deposited to the Certificate Account shall be held by
the Certificate Trustee in the name of the Certificate Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions
of this Agreement, subject to the right of each Master Servicer to require the
Certificate Trustee to make withdrawals therefrom as provided herein. The
foregoing requirements for crediting the Certificate Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of (i) late payment charges or
assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Section 4.03(a)(i) through (xi) need not be credited by the
related Master Servicer to the Certificate Account and may be retained by such
Master Servicer as servicing compensation. In the event that a Master Servicer
shall deposit or cause to be deposited to the Certificate Account any amount
not required to be credited thereto, the Certificate Trustee, upon receipt of a
written request therefor signed by a Servicing Officer of such Master Servicer,
shall promptly transfer such amount to such Master Servicer, any provision
herein to the contrary notwithstanding.
(c) The Certificate Account shall constitute a trust account of the
Trusts segregated on the books of the Certificate Trustee and held by the
Certificate Trustee in trust in its Corporate Trust Office , and the
Certificate Account and the funds deposited therein shall not be subject to,
and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Certificate Trustee and each Master Servicer
(whether made directly, or indirectly through a liquidator or receiver of the
Certificate Trustee or any Master Servicer). The amount at any time credited
to the Certificate Account shall be (i) fully insured by the FDIC to the
maximum coverage provided thereby, or (ii) invested in such Permitted
Investments as the Certificate Trustee may select. All Permitted Investments
shall mature or be subject to redemption or withdrawal on or before, and shall
be held until, the next succeeding Distribution Date if the obligor for such
Permitted Investment is the Certificate Trustee or, if such obligor is any
other Person, the Business Day preceding such Distribution Date. With respect
to the Certificate Account and the funds deposited therein, the Certificate
Trustee shall take such action as may be necessary to ensure that the
Certificateholders shall be entitled to the priorities afforded to such a trust
account (in addition to a claim against the estate of the Certificate Trustee)
as provided by 12 U.S.C. Section 92a(e), if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.03. Permitted Withdrawals and Transfers from the Certificate
Account.
(a) The Certificate Trustee will, from time to time on demand of a
Master Servicer, make or cause to be made such withdrawals or transfers from
the Certificate Account as such Master Servicer has designated for such
transfer or withdrawal as specified in a certificate signed by a Servicing
Officer (upon which the Certificate Trustee may conclusively rely) for the
following purposes (limited in the case of amounts due such Master Servicer to
those not withdrawn from the related Protected Accounts in accordance with the
terms of this Agreement):
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(i) to reimburse such Master Servicer for any Monthly Advance
or Servicing Advance of its own funds or any advance of such Master
Servicer's own funds, the right of a Master Servicer to reimbursement
pursuant to this subclause (i) being limited to amounts received on a
particular Mortgage Loan with respect to which it is Master Servicer
(including, for this purpose, the Repurchase Price therefor, Insurance
Proceeds and Liquidation Proceeds) which represent late payments or
recoveries of the principal of or interest on such Mortgage Loan
respecting which such Monthly Advance or Servicing Advance was made;
(ii) to reimburse such Master Servicer from Insurance Proceeds
or Liquidation Proceeds relating to a particular related Mortgage Loan
for amounts expended by such Master Servicer in good faith in connection
with the restoration of the related Mortgaged Property which was damaged
by an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse such Master Servicer from Insurance Proceeds
relating to a particular related Mortgage Loan for Insured Expenses
incurred with respect to such Mortgage Loan and to reimburse such Master
Servicer from Liquidation Proceeds from a particular related Mortgage
Loan for Liquidation Expenses incurred with respect to such Mortgage
Loan; provided, however, that the related Master Servicer shall not be
entitled to reimbursement for Liquidation Expenses with respect to a
Mortgage Loan to the extent that (i) any amounts with respect to such
Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
clause (xi) of this Section 4.03(a) to the related Master Servicer; and
(ii) such Liquidation Expenses were not included in the computation of
such Excess Liquidation Proceeds;
(iv) to pay such Master Servicer, from Liquidation Proceeds or
Insurance Proceeds received in connection with the liquidation of any
Mortgage Loan, the amount which such Master Servicer would have been
entitled to receive under clause (ix) of this Section 4.03(a) as
servicing compensation on account of each defaulted Scheduled Payment on
such Mortgage Loan if paid in a timely manner by the related Mortgagor,
but only to the extent that the aggregate of Liquidation Proceeds and
Insurance Proceeds with respect to such Mortgage Loan, after any
reimbursement to any Master Servicer, pursuant to subclauses (i), (ii),
(iii) and (v) of this Section 4.03(a), exceeds the Outstanding Principal
Balance of such Mortgage Loan plus accrued and unpaid interest thereon
at the related Mortgage Interest Rate less the applicable Master
Servicing Fee Rate to but not including the date of payment;
(v) to pay such Master Servicer from the Repurchase Price for
any related Mortgage Loan, the amount which such Master Servicer would
have been entitled to receive under clause (ix) of this Section 4.03(a)
as servicing compensation, but only to the extent that the Repurchase
Price with respect to such Mortgage Loan after any reimbursement to such
Master Servicer pursuant to subclauses (i) and (vi) of this Section
4.03(a) exceeds the Outstanding Principal Balance of such Mortgage Loan
plus accrued and unpaid interest thereon at the related Mortgage
Interest Rate less the applicable Master Servicing Fee Rate through the
last day of the month of repurchase;
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(vi) to reimburse such Master Servicer for advances of funds
hereunder, the right to reimbursement pursuant to this clause (vi) being
limited to amounts received on the related Mortgage Loan (including, for
this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments
for which such advances were made;
(vii) to pay such Master Servicer with respect to each related
Mortgage Loan that has been purchased pursuant to Section 2.02, 2.04,
2.05 or 10.01, all amounts received thereon, representing recoveries of
principal that reduce the Outstanding Principal Balance of such Mortgage
Loan below the Outstanding Principal Balance used in calculating the
Repurchase Price or representing interest included in the calculation of
the Repurchase Price or accrued after the end of the month during which
such repurchase occurs;
(viii) to reimburse such Master Servicer for any Monthly Advance
or a Servicing Advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Monthly Advance or Servicing
Advance has not been reimbursed pursuant to clauses (i) and (vi);
(ix) to pay such Master Servicer servicing compensation as set
forth in Section 3.11(b);
(x) to reimburse such Master Servicer or the Certificate
Trustee for expenses, costs and liabilities incurred by and reimbursable
to it pursuant to Sections 7.03, 7.04(d) or 11.02;
(xi) to pay to such Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds;
(xii) to reimburse such Master Servicer for any amounts to which
it is entitled to reimbursement under the terms of this Agreement;
(xiii) to clear and terminate the Certificate Account pursuant to
Section 10.01; and
(xiv) to remove amounts deposited in error.
Each Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Certificate Account pursuant to clauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would
have been covered by such clauses had the amounts not been retained by such
Master Servicer without being deposited in the Certificate Account under
Section 4.02(b).
(b) On each Distribution Date, the Certificate Trustee shall make the
following payments in the priority set forth from the funds in the Certificate
Account:
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(i) First, the amount of investment earnings, net of losses,
to the Certificate Trustee; and
(ii) Second, the amount distributable to the Holders of the
Certificates shall be payable in accordance with Section 6.01.
Section 4.04 Buydown Fund Accounts. (a) If applicable, each Master
Servicer shall establish and maintain for the benefit of the Certificateholders
a Buydown Fund Account as a segregated non-interest bearing trust account in
the corporate trust department of either a Designated Depository Institution or
the Certificate Trustee. Each Buydown Fund Account shall constitute a trust
account of the applicable Trust segregated on the books of the Designated
Depository Institution or the Certificate Trustee, as applicable, and held by
the Designated Depository Institution or the Certificate Trustee, as applicable
in trust, and such Account and the funds deposited therein shall not be subject
to, and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Designated Depository Institution, the
Certificate Trustee and each Master Servicer (whether made directly, or
indirectly through a liquidator or receiver of the Designated Depository
Institution, the Certificate Trustee or a Master Servicer). If the Buydown
Fund Account is maintained with the Certificate Trustee, the Certificate
Trustee shall take such action as may be necessary to ensure that the
Certificateholders shall be entitled to the priorities afforded to such a trust
account (in addition to a claim against the estate of the Certificate Trustee)
as provided by 12 U.S.C. Section 92a(e), if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
(b) Each Master Servicer may make withdrawals from its Buydown Fund
Account for the following purposes: (i) to deposit in its Protected Account or
the Certificate Account the amount necessary to supplement payments received on
Buydown Loans, (ii) in the event of a Principal Prepayment of any Buydown Loan,
to apply amounts remaining in the Buydown Fund Account to reduce the required
amount of such Principal Prepayment (or, if the Mortgagor has made a Principal
Prepayment, to refund such remaining Buydown Fund amounts to the person
entitled thereto); and (iii) in the event of foreclosure or liquidation of any
Buydown Loan, to deposit remaining Buydown Fund amounts in the Protected
Account or the Certificate Account as Liquidation Proceeds.
(c) Funds in a Buydown Fund Account may be invested at the written
direction of the applicable Master Servicer in Permitted Investments held in
trust in the name of the Certificate Trustee for the benefit of the
Certificateholders and in the absence of such directions, funds in a Buydown
Fund Account shall be invested in Permitted Investments described in clause
(iii) or clause (viii) of the definition thereof. Such Permitted Investments
must mature, or be subject to redemption or withdrawal, no later than the date
on which such funds are required to be withdrawn for deposit in the Certificate
Account pursuant to Section 4.01(b) and shall be held in such Account until
required for such deposit. The income earned from Permitted Investments made
pursuant to this Section 4.04 shall be paid to the applicable Master Servicer
as additional compensation for its obligations hereunder, and the risk of loss
of moneys required to be distributed to the Certificateholders resulting from
such investments shall be borne by and be the risk of the related Master
Servicer. The amount of any such loss shall be deposited by the related Master
Servicer in
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the applicable Buydown Fund Account within two Business Days of receipt of
notification of such loss but not later than the immediately following Master
Servicer Remittance Date.
ARTICLE V
CERTIFICATES
Section 5.01. The Certificates.
(a) The Certificates shall be substantially in the form set forth in
Exhibit A attached hereto and shall be executed by the Depositor, authenticated
by the Certificate Trustee and delivered to or upon the order of the Depositor
upon receipt by the Certificate Trustee of the documents specified in Section
2.02. The Certificates shall be issuable in Authorized Denominations
evidencing Fractional Undivided Interests. Certificates shall be executed by
manual or facsimile signature on behalf of the Depositor and the Certificate
Trustee by authorized officers of the Depositor and the Certificate Trustee,
respectively. Certificates bearing the manual or facsimile signatures of
individuals who were at the time of execution the proper officers of the
Depositor and the Certificate Trustee shall bind the Depositor and the
Certificate Trustee, respectively, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. 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 in Exhibit A hereto executed by the Depositor and the Certificate Trustee
by manual signature, and such certificate 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.
(b) No transfer of a Certificate shall be deemed to be made in
accordance with this Section 5.01(b) unless such transfer is made pursuant to
an effective registration statement under the Securities Act or unless the
Certificate Trustee is provided with the certificates and an Opinion of
Counsel, if required, on which the Certificate Trustee may conclusively rely,
which establishes or establish to the Certificate Trustee's satisfaction that
such transfer is exempt from the registration requirements under the Securities
Act, as follows: In the event that a transfer is to be made in reliance upon
an exemption from the Securities Act, the Certificate Trustee shall require, in
order to assure compliance with the Securities Act, that the Certificateholder
desiring to effect such transfer certify to the Certificate Trustee in writing,
by causing the execution of a Purchaser Representation Letter in substantially
the form attached hereto as Exhibit E, with such modifications to such Exhibit
E as may be appropriate to reflect the actual facts of the proposed transfer.
Section 5.02. Certificates Issuable in Series; Authorized Denominations.
The aggregate principal amount of Certificates of a Series that may be
authenticated and delivered under this Agreement is limited to the aggregate
Scheduled Principal Balance of the Mortgage Loans in the related Mortgage Loan
Group as of the Cut-off Date. The aggregate Fractional Undivided Interest of
each Certificate of a Series that may be authenticated and delivered under this
Agreement is limited to 100%. Certificates shall be issued in Authorized
Denominations.
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Section 5.03. Registration of Transfer and Exchange of Certificates. The
Certificate Trustee shall cause to be maintained at one of its offices or at
its designated agent, a Certificate Register in which there shall be recorded
the name and address of each Certificateholder. Subject to such reasonable
rules and regulations as the Certificate Trustee may prescribe, the Certificate
Register shall be amended from time to time by the Certificate Trustee or its
agent to reflect notice of any changes received by the Certificate Trustee or
its agent pursuant to Section 11.06. The Certificate Trustee hereby appoints
itself as the initial Certificate Registrar.
Upon surrender for registration of transfer of any Certificate of a
Series to the Certificate Trustee at the office of The First National Bank of
Chicago, ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Registered Securities, or such other address or agency as may hereafter be
provided to each Master Servicer in writing by the Certificate Trustee, the
Certificate Trustee shall execute, and the Certificate Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of such Series of Authorized
Denominations of like Fractional Undivided Interest. At the option of the
Certificateholders, Certificates of a Series may be exchanged for other
Certificates of such Series in Authorized Denominations of like Fractional
Undivided Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Certificate Trustee shall execute, and authenticate and deliver,
the Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer shall (if so
required by the Certificate Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Certificate
Trustee and duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing.
A reasonable service charge may be made for any such exchange or
transfer of Certificates, and the Certificate Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be canceled
by the Certificate Trustee.
Section 5.04. Mutilated, Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate of a Series is surrendered to the Certificate
Trustee, or (ii) the Certificate Trustee receives evidence to their
satisfaction of the destruction, loss or theft of any Certificate of a Series,
and there is delivered to the Certificate Trustee such security or indemnity as
it may be required to save it harmless, then, in the absence of notice to the
Certificate Trustee that such Certificate has been acquired by a bona fide
purchaser, the Certificate Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of such Series of like Fractional Undivided
Interest. Upon the issuance of any new Certificate under this Section 5.04,
the Certificate Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the Certificate
Trustee) connected therewith. Any replacement Certificate of a Series issued
pursuant to this Section 5.04 shall constitute complete and indefeasible
evidence of ownership in the related Trust, as if originally issued, whether or
not the lost or stolen Certificate shall be found at any time.
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Section 5.05. Persons Deemed Owners. The Depositor, each Master
Servicer, the Certificate Trustee and any agent of any of them may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 6.01
and for all other purposes whatsoever, and none of the Depositor, the Master
Servicers, the Certificate Trustee, the Certificate Registrar or any agent of
the Depositor, the Master Servicers or the Certificate Trustee shall be
affected by notice to the contrary.
Section 5.06. Office for Transfer of Certificates. The Certificate
Trustee shall maintain in New York, New York, an office or agency where
Certificates may be surrendered for registration of transfer or exchange. The
Certificate Trustee's office at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust, is initially designated for said purposes.
ARTICLE VI
PAYMENTS TO CERTIFICATEHOLDERS
Section 6.01. Distributions to Certificateholders.
(a) On each Distribution Date, the Certificate Trustee shall
distribute the Available Funds with respect to each Series to the
Certificateholders of such Series, by wire transfer in immediately available
funds for the account of each Certificateholder, or by any other means of
payment acceptable to each Certificateholder of record on the immediately
preceding Record Date (other than as provided in Section 10.01 respecting the
final distribution), as specified by each such Certificateholder and at the
address of such Holder appearing in the Certificate Register.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal with respect to Mortgage
Loans made on any Distribution Date shall be binding upon all Holders of such
Certificate and of any Certificate issued upon the registration of transfer or
exchange therefor or in lieu thereof, whether or not such distribution is noted
on such Certificate. The final distribution of principal of each Certificate
shall be payable in the manner provided above only upon presentation and
surrender thereof on or after the Distribution Date therefor at the office or
agency of the Certificate Registrar specified in the notice delivered pursuant
to Section 10.01(d).
Section 6.02. Statements to Certificateholders. Not later than each
Master Servicer Remittance Date, each Master Servicer shall forward to the
Certificate Trustee a Master Servicer Report setting forth certain information
with respect to the Mortgage Loans serviced by such Master Servicer. With each
distribution from the Certificate Account on a Distribution Date with respect
to a Series, the Certificate Trustee shall, based on the information set forth
in such Master Servicers' Reports, prepare and forward to each
Certificateholder, a statement setting forth, to the extent applicable: the
amount of the distribution payable to the Certificateholders that represents
principal and the amount that represents interest, and the applicable
Certificate Principal Balance after giving effect to such distribution.
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Upon request by any Certificateholder, the Certificate Trustee shall
forward to such Certificateholder and the Depositor an additional report which
sets forth with respect to the Mortgage Loans:
(a) the number and aggregate Scheduled Principal Balance of
(i) the Group 1 Mortgage Loans, (ii) the Group 2 Mortgage Loans and
(iii) the Group 3 Mortgage Loans;
(b) the number and aggregate Scheduled Principal Balance of
(i) Group 1 Mortgage Loans, (ii) the Group 2 Mortgage Loans and (ii)
Group 3 Mortgage Loans, in each case delinquent one, two and three
months or more;
(c) the (i) number and aggregate Scheduled Principal Balance
of Group 1 Mortgage Loans with respect to which foreclosure proceedings
have been initiated, and (ii) the number and aggregate book value of
related Mortgaged Properties acquired through foreclosure, deed in lieu
of foreclosure or other exercise of rights respecting the Certificate
Trustee's security interest in the Group 1 Mortgage Loans;
(d) the (i) number and aggregate Scheduled Principal Balance
of Group 2 Mortgage Loans with respect to which foreclosure proceedings
have been initiated, and (ii) the number and aggregate book value of
related Mortgaged Properties acquired through foreclosure, deed in lieu
of foreclosure or other exercise of rights respecting the Certificate
Trustee's security interest in the Group 2 Mortgage Loans;
(e) the (i) number and aggregate Scheduled Principal Balance
of Group 3 Mortgage Loans with respect to which foreclosure proceedings
have been initiated, and (ii) the number and aggregate book value of
related Mortgaged Properties acquired through foreclosure, deed in lieu
of foreclosure or other exercise of rights respecting the Certificate
Trustee's security interest in the Group 3 Mortgage Loans;
(f) The amount of Special Hazard Losses incurred in respect of
the Group 1 Mortgage Loans since the immediately preceding Distribution
Date, the cumulative amount of Special Hazard Losses incurred in respect
of the Group 1 Mortgage Loans since the Cut-off Date, and the Special
Hazard Loss Amount with respect to the Group 1 Mortgage Loans remaining
as of the close of business on the applicable Determination Date;
(g) The amount of Special Hazard Losses incurred in respect of
the Group 2 Mortgage Loans since the immediately preceding Distribution
Date, the cumulative amount of Special Hazard Losses incurred in respect
of the Group 2 Mortgage Loans since the Cut-off Date, and the Special
Hazard Loss Amount with respect to the Group 2 Mortgage Loans remaining
as of the close of business on the applicable Determination Date;
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(h) The amount of Special Hazard Losses incurred in respect of
the Group 3 Mortgage Loans since the immediately preceding Distribution
Date, the cumulative amount of Special Hazard Losses incurred in respect
of the Group 3 Mortgage Loans since the Cut-off Date, and the Special
Hazard Loss Amount with respect to the Group 3 Mortgage Loans remaining
as of the close of business on the applicable Determination Date;
(i) The amount of Realized Losses incurred in respect of the
Group 1 Mortgage Loans since the immediately preceding Distribution Date
and the cumulative amount of Realized Losses incurred in respect of the
Group 1 Mortgage Loans since the Cut-off Date;
(j) The amount of Realized Losses incurred in respect of the
Group 2 Mortgage Loans since the immediately preceding Distribution Date
and the cumulative amount of Realized Losses incurred in respect of the
Group 2 Mortgage Loans since the Cut-off Date;
(k) The amount of Realized Losses incurred in respect of the
Group 3 Mortgage Loans since the immediately preceding Distribution Date
and the cumulative amount of Realized Losses incurred in respect of the
Group 3 Mortgage Loans since the Cut-off Date;
(l) The amount of Interest Shortfalls incurred in respect of
the Group 1 Mortgage Loans since the immediately preceding Distribution
Date and the cumulative amount of Interest Shortfalls incurred in
respect of the Group 1 Mortgage Loans since the Cut-off Date;
(m) The amount of Interest Shortfalls incurred in respect of
the Group 2 Mortgage Loans since the immediately preceding Distribution
Date and the cumulative amount of Interest Shortfalls incurred in
respect of the Group 2 Mortgage Loans since the Cut-off Date; and
(n) The amount of Interest Shortfalls incurred in respect of
the Group 3 Mortgage Loans since the immediately preceding Distribution
Date and the cumulative amount of Interest Shortfalls incurred in
respect of the Group 3 Mortgage Loans since the Cut-off Date.
Section 6.03. Monthly Advances. If the Scheduled Payment on a Mortgage
Loan that was due on a related Due Date is delinquent other than as a result of
application of the Relief Act, each Master Servicer shall deposit in the
Certificate Account on the applicable Master Servicer Remittance Date an amount
equal to such deficiency, net the applicable Master Servicing Fee, except to
the extent such Master Servicer determines any such advance to be
nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments
on the Mortgage Loan for which such Monthly Advance was made. Any amount used
as a Certificate Account Advance shall be replaced by the related Master
Servicer by deposit in the Certificate Account on or before any future date on
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which and to the extent that funds in the Certificate Account on such date are
less than the amount required to be transferred to the Certificate Account. If
applicable, on the Business Day preceding each Distribution Date, each Master
Servicer shall present an Officer's Certificate to the Certificate Trustee (i)
stating that such Master Servicer elects not to make a Monthly Advance in a
stated amount and (ii) detailing the reason it deems the advance to be
nonrecoverable.
Section 6.04. Compensating Interest Payments. Each Master Servicer
shall deposit in the Certificate Account not later than the Master Servicer
Remittance Date immediately preceding the related Distribution Date an amount
equal to the lesser of (i) the aggregate amounts determined pursuant to clauses
(a) and (b) of the definition of Interest Shortfall as calculated with respect
to Mortgage Loans serviced by such Master Servicer for the related Distribution
Date and (ii) the applicable Master Servicing Fee for such Distribution Date;
provided, however, that for this purpose the Master Servicing Fee Rate for each
Cendant Mortgage Loan shall be capped at 0.20% per annum (such amount, the
"Compensating Interest Payment"). No Master Servicer shall be entitled to any
reimbursement of any Compensating Interest Payment.
Section 6.05. Reports of Foreclosures and Abandonment of Mortgaged
Property. Each year each Master Servicer shall report or cause to be reported
to the Internal Revenue Service foreclosures and abandonments of any Mortgaged
Property with respect to Mortgage Loans serviced by such Master Servicer as
required by Section 6050J of the Code.
ARTICLE VII
THE MASTER SERVICERS
Section 7.01. Liabilities of the Master Servicers. Each Master
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by such Master Servicer
herein. The parties agree that each Master Servicer shall service the Mortgage
Loans which it services in accordance with the terms of this Agreement, in
accordance with this Agreement and applicable laws and regulations, giving due
consideration to customary and usual standards of practice of prudent mortgage
lenders and master servicers.
Section 7.02. Merger or Consolidation of a Master Servicer. Any Person
into which a Master Servicer may be merged or consolidated, or any corporation
resulting from any merger or consolidation to which a Master Servicer shall be
a party, or any Person succeeding to the business of a Master Servicer, shall
be the successor of such Master Servicer hereunder, without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 7.03. Indemnification of the Certificate Trustee. The Trusts
shall indemnify the Indemnified Persons for, and to hold them harmless against,
any loss, liability or expense incurred on their part, arising out of, or in
connection with, this Agreement, including the costs and expenses (including
reasonable legal fees and expenses) of defending themselves against any such
claim other than (i) any loss, liability or expense related to any such
Indemnified Person's failure to perform such Indemnified Person's duties in
strict compliance with this Agreement (except as any such loss,
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liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and (ii) any loss, liability or expense incurred by reason of any
such Indemnified Person's willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. In addition, each Master Servicer,
individually and not jointly, shall indemnify the Indemnified Persons for, and
hold them harmless against, any loss, liability or expense incurred on its
part, arising out of, or in connection with, this Agreement, including the
costs and expenses (including reasonable legal fees and expenses) of defending
themselves against any such claim, but only to the extent any such loss,
liability or expense results solely from such Master Servicer's failure to
perform its duties in strict compliance with this Agreement. This indemnity
shall survive the resignation or removal of the Certificate Trustee and the
termination of this Agreement.
Section 7.04. Limitation on Liability of the Master Servicer and
Others.
(a) Neither Master Servicer nor any of its directors, officers,
employees or agents shall be under any liability to the Indemnified Persons,
the Depositor, the Trusts or the Certificateholders for taking any action or
for refraining from taking any action in good faith pursuant to this Agreement,
or for errors in judgment; provided, however, that this provision shall not
protect a Master Servicer or any such Person against any breach of warranties
or representations made herein by it or any liability which would otherwise be
imposed on it by reason of such Person's willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder.
(b) Each Master Servicer and any of its directors, officers,
employees or agents 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.
(c) Each Master Servicer and any of its directors, officers,
employees or agents shall be indemnified by the Trusts and held harmless
thereby against any loss, liability or expense incurred in connection with any
legal proceedings relating to this Agreement or the Certificates (including
reasonable legal fees and disbursements of counsel), other than (i) any loss,
liability or expense related to its failure to perform its duties in strict
compliance with this Agreement (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and (ii) any loss,
liability or expense incurred by reason of such Person's willful misfeasance,
bad faith or negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder.
(d) Neither Master Servicer shall be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties
under this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that either Master Servicer may in its
discretion, with the consent of the Certificate Trustee, undertake any such
action which it may deem necessary or desirable with 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 related Trusts, and such Master Servicer shall be entitled
to be reimbursed therefor out of the related
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Protected Accounts or the Certificate Account as provided by Section 4.03(a).
Nothing in this Section 7.04(d) shall affect a Master Servicer's obligation to
supervise the servicing and administration of the Mortgage Loans pursuant to
Section 3.01(a).
(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, no
Master Servicer shall be required to investigate or make recommendations
concerning potential liabilities which the Trusts might incur as a result of
such course of action by reason of the condition of the Mortgaged Properties
but each Master Servicer shall give notice to the Certificate Trustee if it has
notice of such potential liabilities.
Section 7.05. No Master Servicer to Resign. Except as provided in
Section 7.06, no Master Servicer shall resign from the obligations and duties
hereby imposed on it except upon a determination that any such duties hereunder
are no longer permissible under applicable law. Any such determination
permitting the resignation of a Master Servicer shall be evidenced by an
Opinion of Independent Counsel to such effect delivered to the Certificate
Trustee. No such resignation by a Master Servicer shall become effective until
the Certificate Trustee or a successor to such Master Servicer reasonably
satisfactory to the Certificate Trustee shall have assumed the responsibilities
and obligations of such Master Servicer in accordance with Section 8.02 hereof.
The Certificate Trustee shall notify the Rating Agencies of the resignation of
any Master Servicer.
Section 7.06. Sale and Assignment of Master Servicing. Each Master
Servicer may sell and assign its rights and delegate its duties and obligations
in their entirety as a Master Servicer under this Agreement; provided, however,
that:
(i) the purchaser or transferee accepting such assignment and
delegation (a) shall be a Person which shall be qualified to service
mortgage loans for FNMA or ▇▇▇▇▇▇▇ Mac; (b) shall have a net worth of
not less than $10,000,000 (unless otherwise approved by each Rating
Agency pursuant to clause (ii) below); (c) shall be reasonably
satisfactory to the Certificate Trustee (as evidenced in a writing
signed by the Certificate Trustee); (d) shall execute and deliver to the
Certificate Trustee an agreement, in form and substance reasonably
satisfactory to the Certificate Trustee, which contains an assumption by
such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as master
servicer under this Agreement from and after the effective date of such
agreement;
(ii) each Rating Agency shall be given prior written notice of
the identity of the proposed successor to such Master Servicer and each
Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded,
qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to such
Master Servicer and the Certificate Trustee; and
(iii) the Master Servicer assigning and selling the master
servicing shall deliver to the Certificate Trustee an Officer's
Certificate and an Opinion of Independent Counsel,
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each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and
complies with the terms of this Agreement.
No such assignment or delegation shall affect any liability of the related
Master Servicer arising prior to the effective date thereof.
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default. The term "Event of Default", wherever
used herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) A Master Servicer fails to cause to be deposited in the
Certificate Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of
two Business Days after the date such deposit was required to be made;
or
(ii) A Master Servicer fails to observe or perform in any
material respect any other covenants and agreements set forth in this
Agreement to be performed by it, which covenants and agreements
materially affect the rights of Certificateholders, and such failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure, properly requiring the same to be
remedied, shall have been given to such Master Servicer by the
Certificate Trustee or to such Master Servicer and the Certificate
Trustee by the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 25% of the Trust Fund for a Series;
or
(iii) There is entered against a Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against a Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) A Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings of or
relating to such Master Servicer or substantially all of its property;
or a Master Servicer admits in writing its inability to pay its debts
generally as they become due, files a petition to take advantage of any
applicable insolvency or reorganization statute, makes an assignment for
the benefit of its creditors, or voluntarily suspends payment of its
obligations; or
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(v) A Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.06.
In each and every such case, so long as such Event of Default with respect to
such Master Servicer shall not have been remedied, either the Certificate
Trustee or the Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the principal of the Trust Fund for
an affected Series, by notice in writing to such Master Servicer (and to the
Certificate Trustee if given by such Certificateholders), with a copy to the
Rating Agencies, may terminate all of the rights and obligations (but not the
liabilities) of such Master Servicer under this Agreement and in and to the
Mortgage Loans and/or the REO Property serviced by such Master Servicer and the
proceeds thereof. Upon the receipt by a Master Servicer of such written
notice, all authority and power of such Master Servicer under this Agreement,
whether with respect to the Certificates, the applicable Mortgage Loans, REO
Property or under any other related agreements, shall, subject to Section 8.02,
automatically and without further action pass to and be vested in the
Certificate Trustee pursuant to this Section 8.01; and, without limitation, the
Certificate 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 applicable Mortgage Loans and related documents, or otherwise. Each
Master Servicer agrees to cooperate with the Certificate Trustee in effecting
the termination of the defaulting Master Servicer's rights and obligations
hereunder, including, without limitation, the transfer to the Certificate
Trustee of (i) the property and amounts which are then or should be part of the
Trust or which thereafter become part of the Trust; (ii) originals or copies of
all documents of such Master Servicer reasonably requested by the Certificate
Trustee to enable it to assume such Master Servicer's duties thereunder; and
(iii) the rights and obligations of such Master Servicer under this Agreement
with respect to the applicable Mortgage Loans. In addition to any other
amounts which are then, or, notwithstanding the termination of its activities
under this Agreement, may become payable to a terminated Master Servicer under
this Agreement, such Master Servicer shall be entitled to receive, out of any
amount received on account of any applicable Mortgage Loan or REO Property,
that portion of such payments which it would have received as reimbursement
pursuant to Section 3.11 if notice of termination had not been given. The
termination of the rights and obligations of a Master Servicer shall not affect
any obligations incurred by such Master Servicer prior to such termination nor
the right of such Master Servicer to its accrued fees and expenses.
Section 8.02. Certificate Trustee to Act; Appointment of Successor.
(a) Upon the receipt by a Master Servicer of a notice of termination pursuant
to Section 8.01 or an Opinion of Independent Counsel pursuant to Section 7.05
to the effect that such Master Servicer is legally unable to act or to delegate
its duties to a Person which is legally able to act, the Certificate Trustee
shall automatically become the successor in all respects to such Master
Servicer in its capacity under this Agreement and the transactions set forth or
provided for herein and shall thereafter be subject to all the
responsibilities, duties, liabilities and limitations on liabilities relating
thereto placed on such Master Servicer by the terms and provisions hereof;
provided, however, that the Certificate Trustee (i) shall be under no
obligation to purchase any related Mortgage Loan pursuant to Section
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10.01; and (ii) shall have no obligation whatsoever with respect to any
liability (other than advances deemed recoverable and not previously made)
incurred by such Master Servicer at or prior to the time of receipt by such
Master Servicer of such notice or by the Certificate Trustee of such Opinion of
Independent Counsel. As compensation therefor, the Certificate Trustee shall
be entitled to all funds relating to the Mortgage Loans which such Master
Servicer would have been entitled to retain if such Master Servicer had
continued to act hereunder, except for those amounts due such Master Servicer
as reimbursement for advances previously made or expenses previously incurred.
Notwithstanding the above, the Certificate Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution which is a FNMA- or ▇▇▇▇▇▇▇ Mac-approved servicer,
and with respect to a successor to a Master Servicer only, having a net worth
of not less than $10,000,000, as the successor to such Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of such Master Servicer hereunder. Pending appointment of a
successor to a Master Servicer hereunder, the Certificate Trustee shall act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Certificate Trustee may make such arrangements for the
compensation of such successor out of payments on the Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of that permitted the Certificate Trustee under this Subsection
8.02(a), and that such successor shall undertake and assume the obligations of
the Certificate Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Certificate Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Certificate Trustee shall succeed to any duties of a
Master Servicer respecting the Mortgage Loans master serviced by such Master
Servicer as provided herein, it shall do so in a separate capacity and not in
its capacity as Certificate Trustee and, accordingly, the provisions of Article
IX shall be inapplicable to the Certificate Trustee in its duties as the
successor to such Master Servicer in the servicing of such Mortgage Loans
(although such provisions shall continue to apply to the Certificate Trustee in
its capacity as Certificate Trustee); the provisions of Article VII, however,
shall apply to it in its capacity as successor master servicer.
Section 8.03. Notification to Certificateholders. Upon any termination
or appointment of a successor to a Master Servicer, the Certificate Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to the Rating
Agencies.
Section 8.04. Waiver of Defaults. The Certificate Trustee shall
transmit by mail to all Certificateholders, within 60 days after the occurrence
of any Event of Default known to the Certificate Trustee, unless such Event of
Default shall have been cured, notice of each such Event of Default hereunder
known to the Certificate Trustee. The Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 51% of the Trust Fund
for an affected Series may, on behalf of all Certificateholders, waive any
default by a Master Servicer in the performance of its obligations hereunder
and the consequences thereof, except a default in the making of or the causing
to be made any required distribution on the Certificates of such Series. Upon
any such
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waiver of a past default, such default shall be deemed to cease to exist, and
any Event of Default arising therefrom shall be deemed to have been timely
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. The Certificate Trustee shall give notice
of any such waiver to the Rating Agencies.
Section 8.05. List of Certificateholders. Upon written request of two
or more Certificateholders of record, for purposes of communicating with other
Certificateholders with respect to their rights under this Agreement, the
Certificate Trustee will afford such Certificateholders access during business
hours to the most recent list of Certificateholders held by the Certificate
Trustee.
ARTICLE IX
CONCERNING THE CERTIFICATE TRUSTEE
Section 9.01. Duties of Certificate Trustee.
(a) The Certificate Trustee, prior to the occurrence of an Event of
Default and after the curing or waiver of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement as duties of the Certificate Trustee.
If an Event of Default has occurred and has not been cured or waived, the
Certificate Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and subject to Section 8.02(b) use the same degree of care
and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of his own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are
specifically required to be furnished to the Certificate Trustee pursuant to
any provision of this Agreement, the Certificate Trustee shall examine them to
determine whether they are in the form required by this Agreement; provided,
however, that the Certificate Trustee shall not be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report,
document, order or other instrument furnished by a Master Servicer hereunder;
and provided, further, that the Certificate Trustee shall not be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement.
(c) The Certificate Trustee shall make monthly distributions and the
final distribution to the Certificateholders as provided in Sections 6.01 and
10.01 herein.
(d) No provision of this Agreement shall be construed to relieve the
Certificate Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however,
that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Certificate Trustee shall be
determined solely by the express provisions of this Agreement,
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the Certificate Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Certificate Trustee and, in the absence of bad
faith on the part of the Certificate Trustee, the Certificate Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Certificate Trustee and conforming to the
requirements of this Agreement.
(ii) The Certificate Trustee shall not be liable in its
individual capacity for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Certificate Trustee,
unless it shall be proved that the Certificate Trustee was negligent in
ascertaining the pertinent facts.
(iii) The Certificate Trustee shall not be liable with respect
to any action taken, suffered or omitted to be taken by it in good faith
in accordance with the directions of the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 25%
of the Trust Fund for a Series, if such action or non-action relates to
the time, method and place of conducting any proceeding for any remedy
available to the Certificate Trustee, or exercising any trust or other
power conferred upon the Certificate Trustee, under this Agreement.
(iv) The Certificate Trustee shall not be required to take
notice or be deemed to have notice or knowledge of any default or Event
of Default unless a Responsible Officer of the Certificate Trustee's
Corporate Trust Office shall have actual knowledge thereof. In the
absence of such notice, the Certificate Trustee may conclusively assume
there is no such default or Event of Default.
(v) The Certificate Trustee shall not in any way be liable by
reason of any insufficiency in any Account held by or in the name of
Certificate Trustee unless it is determined by a court of competent
jurisdiction that the Certificate Trustee's gross negligence or willful
misconduct was the primary cause of such insufficiency. Notwithstanding
the preceding sentence, the Certificate Trustee shall not in any way be
liable by reason of any insufficiency in any Account (except the
Certificate Account) held by, or in the name of the Certificate Trustee
resulting from any loss on any Permitted Investment invested pursuant to
Article IV of this Agreement.
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Certificate Trustee be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Certificate
Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.
The Certificate Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if there
is reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the
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provisions contained in this Agreement shall in any event require the
Certificate Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of a Master Servicer under this Agreement, except
during such time, if any, as the Certificate Trustee shall be the successor to,
and be vested with the rights, duties, powers and privileges of, such Master
Servicer in accordance with the terms of this Agreement.
(e) All funds received by the Certificate Trustee and required to be
deposited in the Certificate Account pursuant to this Agreement will be
promptly so deposited by the Certificate Trustee.
(f) Except for those actions that the Certificate Trustee is required
to take hereunder, the Certificate Trustee shall have no obligation or
liability to take any action or to refrain from taking any action hereunder in
the absence of written direction as provided hereunder.
Section 9.02. Certain Matters Affecting the Certificate Trustee.
Except as otherwise provided in Section 9.01:
(i) The Certificate Trustee may rely and shall be protected in
acting or refraining from acting in reliance on any resolution,
Officer's Certificate, certificate of a Servicing Officer, certificate
of auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(ii) The Certificate Trustee may consult with counsel and any
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection with respect to 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 Certificate Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement,
other than its obligation to give notices pursuant to this Agreement, or
to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Certificate Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby. Nothing contained
herein shall, however, relieve the Certificate Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Certificate Trustee's Corporate Trust Office
has actual knowledge (which has not been cured or waived), to exercise
such of the rights and powers vested in it by this Agreement, and to use
the same degree of care and skill in their exercise, as a prudent person
would exercise under the circumstances in the conduct of his own
affairs.
(iv) The Certificate Trustee shall not be liable in its
individual capacity for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement.
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(v) The Certificate Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the
Trust Fund for a Series and provided that the payment within a
reasonable time to the Certificate 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 Certificate Trustee, reasonably
assured to the Certificate Trustee by the security afforded to it by the
terms of this Agreement. The Certificate Trustee may require reasonable
indemnity against such expense or liability as a condition to taking any
such action. The reasonable expense of every such examination shall be
paid by the Certificateholders requesting the investigation.
(vi) The Certificate Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
through agents or attorneys; provided, however, that the Certificate
Trustee may not appoint any agent to perform its custodial functions
with respect to the Mortgage Files, other than the Custodian, or paying
agent functions under this Agreement without the express written consent
of each Master Servicer. The Certificate Trustee shall not be liable or
responsible for the misconduct or negligence of any of the Certificate
Trustee's agents or attorneys or a custodian or paying agent appointed
hereunder by the Certificate Trustee with due care and, when required,
with the consent of each Master Servicer.
(vii) Should the Certificate Trustee deem the nature of any
action required on its part, other than a payment or transfer under
Section 4.02(b) or Section 4.03, to be unclear, the Certificate Trustee
may require prior to such action that it be provided by a Master
Servicer with reasonable further instructions.
(viii) The right of the Certificate Trustee to perform any
discretionary act enumerated in this Agreement shall not be construed as
a duty, and the Certificate Trustee shall not be accountable for other
than its negligence or willful misconduct in the performance of any such
act.
(ix) The Certificate Trustee shall not be required to give any
bond or surety with respect to the execution of the trust created hereby
or the powers granted hereunder.
(x) The Certificate Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Mortgage Loan by BSMCC pursuant to this
Agreement and/or the Mortgage Loan Purchase Agreement or the eligibility
of any Mortgage Loan for purposes of this Agreement.
Section 9.03. Certificate Trustee Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor, and the Certificate Trustee shall
have no responsibility for their correctness. The Certificate Trustee makes no
representation as to the validity or sufficiency of the Certificates (other
than the signature and
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countersignature of the Certificate Trustee on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02 and 2.05 hereof;
provided, however, that the foregoing shall not relieve the Certificate Trustee
of its obligation to cause the Custodian to review the Mortgage Files pursuant
to Sections 2.02 and 2.05. The Certificate Trustee's signature and
countersignature (or countersignature of its agent) on the Certificates shall
be solely in its capacity as Certificate Trustee and shall not constitute an
obligation of the Certificate Trustee in any other capacity. The Certificate
Trustee shall not be accountable for the use or application by the Depositor of
any of the Certificates or of the proceeds of such Certificates, or for the use
or application of any funds paid to the Depositor with respect to the Mortgage
Loans. Subject to the provisions of Section 2.05, the Certificate Trustee
shall not be responsible for the legality or validity of this Agreement or any
document or instrument relating to this Agreement, the validity of the
execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. The Certificate Trustee shall at no time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Mortgage Loan, or the perfection and priority of any Security Agreement or
the maintenance of any such perfection and priority, or for or with respect to
the sufficiency of the related Trust Fund or its ability to generate the
payments to be distributed to Certificateholders, under this Agreement. The
Certificate 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 9.04. Certificate Trustee May Own Certificates. The
Certificate Trustee in its individual capacity or in any capacity other than as
Certificate Trustee hereunder may become the owner or pledgee of any
Certificates with the same rights it would have if it were not Certificate
Trustee, and may otherwise deal with the parties hereto.
Section 9.05. Certificate Trustee's Fees and Expenses. The Certificate
Trustee shall not be entitled to any fee except that it shall be entitled to
retain as compensation all investment income, net of any investment losses,
with respect to Permitted Investments in the Certificate Account. Such
compensation obligation shall not be limited by any provision of law in regard
to the compensation of a Certificate Trustee of an express trust.
Section 9.06. Eligibility Requirements for Certificate Trustee. The
Certificate Trustee and any successor Certificate Trustee shall during the
entire duration of this Agreement be a state bank or trust company or a
national banking association organized and doing business under the laws of
such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus and
undivided profits of at least $40,000,000 or, in the case of a successor
Certificate Trustee, $50,000,000, subject to supervision or examination by
federal or state authority and, in the case of a successor Certificate Trustee
other than pursuant to Section 9.10, rated in one of the two highest long-term
debt categories of, or otherwise acceptable to, each of the Rating Agencies.
The Certificate Trustee shall not be an Affiliate of any Master Servicer,
unless the Certificate Trustee acts as successor Master Servicer hereunder. If
the Certificate Trustee 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
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Section 9.06 the combined capital and surplus of such entity shall be deemed to
be its total equity capital (combined capital and surplus) as set forth in its
most recent report of condition so published. In case at any time the
Certificate Trustee shall cease to be eligible in accordance with the
provisions of this Section 9.06, the Certificate Trustee shall resign
immediately in the manner and with the effect specified in Section 9.08.
Section 9.07. Insurance. The Certificate Trustee, at its own expense,
shall at all times maintain and keep in full force and effect: (i) fidelity
insurance, (ii) theft of documents insurance and (iii) forgery insurance (which
may be collectively satisfied by a "Financial Institution Bond" and/or a
"Bankers' Blanket Bond"). All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary for insurance
typically maintained by banks which act as custodians for investor-owned
mortgage pools. A certificate of an officer of the Certificate Trustee as to
the Certificate Trustee's compliance with this Section 9.07 shall be furnished
to any Master Servicer or Certificateholder upon reasonable written request.
Section 9.08. Resignation and Removal of the Certificate Trustee.
(a) The Certificate Trustee may at any time resign and be discharged
from the Trusts hereby created by giving written notice thereof to each Master
Servicer, with a copy to the Rating Agencies. Upon receiving such notice of
resignation, the Master Servicers shall promptly appoint a successor
Certificate Trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to each of the resigning Certificate Trustee and
the successor Certificate Trustee. If no successor Certificate Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Certificate Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Certificate Trustee.
(b) If at any time the Certificate Trustee shall cease to be eligible
in accordance with the provisions of Section 9.06 and shall fail to resign
after written request therefor by the Master Servicers or if at any time the
Certificate Trustee shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Certificate Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Certificate Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Master Servicers shall be
entitled to remove the Certificate Trustee and appoint a successor Certificate
Trustee by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the Certificate Trustee so removed and the
successor Certificate Trustee.
(c) The Holders of Certificates evidencing Fractional Undivided
Interests aggregating not less than 51% of the Trust Fund for each Series may
at any time remove the Certificate Trustee and appoint a successor Certificate
Trustee by written instrument or instruments, in quadruplicate, signed by such
Holders or their attorneys-in-fact duly authorized, one complete set of which
instruments shall be delivered to each Master Servicer, the Certificate Trustee
so removed and the successor so appointed.
(d) No resignation or removal of the Certificate Trustee and
appointment of a successor Certificate Trustee pursuant to any of the
provisions of this Section 9.08 shall become effective
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except upon appointment of and acceptance of such appointment by the successor
Certificate Trustee as provided in Section 9.09. All costs and expenses
incurred in connection with the resignation or removal of the Certificate
Trustee shall be paid by such Certificate Trustee.
Section 9.09. Successor Certificate Trustee.
(a) Any successor Certificate Trustee appointed as provided in
Section 9.08 shall execute, acknowledge and deliver to each Master Servicer and
to its predecessor Certificate Trustee an instrument accepting such appointment
hereunder. The resignation or removal of the predecessor Certificate Trustee
shall then become effective and such successor Certificate 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 Certificate Trustee herein. The predecessor
Certificate Trustee shall after payment of its outstanding fees and expenses
promptly deliver to the successor Certificate Trustee all assets and records of
the Trust held by it hereunder, and each Master Servicer and the predecessor
Certificate Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor Certificate Trustee all such rights, powers,
duties and obligations.
(b) No successor Certificate Trustee shall accept appointment as
provided in this Section 9.09 unless at the time of such acceptance such
successor Certificate Trustee shall be eligible under the provisions of Section
9.06.
(c) Upon acceptance of appointment by a successor Certificate Trustee
as provided in this Section 9.09, the successor Certificate Trustee shall mail
notice of the succession of such Certificate Trustee hereunder to all
Certificateholders at their addresses as shown in the Certificate Register and
to the Rating Agencies.
Section 9.10. Merger or Consolidation of Certificate Trustee. Any
state bank or trust company or national banking association into which the
Certificate Trustee may be merged or converted or with which it may be
consolidated or any state bank or trust company or national banking association
resulting from any merger, conversion or consolidation to which the Certificate
Trustee shall be a party, or any state bank or trust company or national
banking association succeeding to all or substantially all of the corporate
trust business of the Certificate Trustee, shall be the successor of the
Certificate Trustee hereunder, provided such state bank or trust company or
national banking association shall be eligible under the provisions of Section
9.06. Such succession shall be valid without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 9.11. Appointment of Co-Certificate Trustee or Separate
Certificate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trusts or property constituting the same may at the time be located, the
Master Servicers and the Certificate Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons
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approved by the Certificate Trustee and the Master Servicers to act as
co-Certificate Trustee or co-Certificate Trustees, jointly with the Certificate
Trustee, or separate Certificate Trustee or separate Certificate Trustees, of
all or any part of the Trust, and to vest in such Person or Persons, in such
capacity, such title to the Trusts, or any part thereof, and, subject to the
other provisions of this Section 9.11, such powers, duties, obligations, rights
and trusts as the Master Servicers and the Certificate Trustee may consider
necessary or desirable.
(b) If the Master Servicers shall not have joined in such appointment
within 15 days after the receipt by it of a written request so to do, or in
case an Event of Default with respect to a Master Servicer shall have occurred
and be continuing, the Certificate Trustee shall have the power to make such
appointment without such Master Servicer or Master Servicers.
(c) No co-Certificate Trustee or separate Certificate Trustee
hereunder shall be required to meet the terms of eligibility as a successor
Certificate Trustee under Section 9.06 hereunder and no notice to
Certificateholders of the appointment of co-Certificate Trustee(s) or separate
Certificate Trustee(s) shall be required under Section 9.08 hereof.
(d) In the case of any appointment of a co-Certificate Trustee or
separate Certificate Trustee pursuant to this Section 9.11, all rights, powers,
duties and obligations conferred or imposed upon the Certificate Trustee and
required to be conferred on such co-Certificate Trustee shall be conferred or
imposed upon and exercised or performed by the Certificate Trustee and such
separate Certificate Trustee or co-Certificate Trustee jointly, except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed (whether as Certificate Trustee hereunder or as
successor to a Master Servicer hereunder), the Certificate 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
Trusts or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate Certificate Trustee or co-Certificate Trustee at the
direction of the Certificate Trustee.
(e) Any notice, request or other writing given to the Certificate
Trustee shall be deemed to have been given to each of the then separate
Certificate Trustees and co-Certificate Trustees, as effectively as if given to
each of them. Every instrument appointing any separate Certificate Trustee or
co-Certificate Trustee shall refer to this Agreement and the conditions of this
Article IX. Each separate Certificate Trustee and co-Certificate 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
Certificate 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 Certificate Trustee. Every such instrument shall
be filed with the Certificate Trustee.
(f) To the extent not prohibited by law, any separate Certificate
Trustee or co-Certificate Trustee may, at any time, request the Certificate
Trustee, its agent or attorney-in-fact, with full power and authority, to do
any lawful act under or with respect to this Agreement on its behalf and in its
name. If any separate Certificate Trustee or co-Certificate Trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and
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be exercised by the Certificate Trustee, to the extent permitted by law,
without the appointment of a new or successor Certificate Trustee.
(g) No Certificate Trustee under this Agreement shall be personally
liable by reason of any act or omission of another Certificate Trustee under
this Agreement. The Master Servicers and the Certificate Trustee acting
jointly may at any time accept the resignation of or remove any separate
Certificate Trustee or co-Certificate Trustee, except that following the
occurrence of any Event of Default which has not been cured, the Certificate
Trustee acting alone may accept the resignation of or remove any separate
Certificate Trustee or co-Certificate Trustee.
Section 9.12. Master Servicers Shall Provide Information as Reasonably
Required. Each Master Servicer shall furnish to the Certificate Trustee,
during the term of this Agreement, such periodic, special, or other reports or
information (and in such electronic format or other means acceptable to the
Certificate Trustee) as such Master Servicer may have in its possession and as
may reasonably be requested by the Certificate Trustee in order to fulfill its
duties and obligations under this Agreement.
ARTICLE X
TERMINATION
Section 10.01. Termination of a Series Upon Repurchase by BSMCC or its
Designee or the Depositor or Liquidation of the Mortgage Loans.
(a) Subject to Section 10.02, the respective obligations and
responsibilities of the Depositor, the Master Servicers, the Custodian and the
Certificate Trustee created hereby, other than the obligation of the
Certificate Trustee or the Master Servicers to make payments to
Certificateholders of a Series as hereinafter set forth and to the Certificate
Trustee, shall terminate with respect to a Series upon:
(i) the repurchase by or at the direction of BSMCC or its
designee (or if BSMCC or its designee does not exercise such option, the
Depositor) of all Mortgage Loans in the Mortgage Loan Group of such
Series and all REO Property remaining in the Trust Fund relating to such
Mortgage Loan Group at a price equal to the aggregate Class Current
Principal Balances of the Outstanding Bonds of the related Bond Group,
plus accrued and unpaid interest thereof through the end of the month
preceding the month in which such purchase occurs; or
(ii) the later of the making of the final payment or other
liquidation, or any advance with respect thereto, of the last Mortgage
Loan remaining in the Trust Fund of such Series or the disposition of
all property acquired with respect to any Mortgage Loan of such Series;
provided, however, that in the event that an advance has been made, but
not yet recovered, at the time of such termination, the Person having
made such advance shall be entitled to receive, notwithstanding such
termination, any payments received subsequent thereto with respect to
which such advance was made.
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(b) In no event, however, shall any Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. James's, living on the date of this Agreement.
(c) The right of BSMCC or its designee or the Depositor, as the case
may be, to repurchase all Mortgage Loans in a Mortgage Loan Group pursuant to
Section 10.01(a)(i) above shall be exercisable only if (i) in the case of BSMCC
or its designee or the Depositor, the aggregate unpaid principal balance of the
Mortgage Loans in such Mortgage Loan Group at the time of any such repurchase
is less than 5% of the portion of the Cut-off Date Balance allocable to such
Mortgage Loan Group or (ii) in the case of the Depositor, the Depositor, based
upon an Opinion of Counsel, has determined that the REMIC status of any Series
REMIC has been lost or that a substantial risk exists that such REMIC status
will be lost for the then-current taxable year. At any time thereafter, in the
case of (i) above, BSMCC or its designee, or the Depositor, and in the case of
(ii) above, the Depositor may elect to terminate the related Trust at any time,
and upon such election, BSMCC or its designee or the Depositor, as the case may
be, shall repurchase all the Mortgage Loans and REO Property of the related
Mortgage Loan Group.
(d) The Certificate Trustee shall give notice of any termination to
the Certificateholders of an affected Series, with a copy to the Rating
Agencies, upon which the Certificateholders shall surrender their Certificates
to the Certificate Trustee for payment of the final distribution and
cancellation. Such notice shall be given by letter, mailed not earlier than
the 15th day and not later than the 25th day of the month next preceding the
month of such final distribution, and shall specify (i) the Distribution Date
upon which final payment of the Certificates of such Series will be made upon
presentation and surrender of such Certificates at the office of the
Certificate Trustee therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office of such Certificate Trustee
therein specified.
(e) If the option of BSMCC or its designee or the Depositor, as the
case may be, to repurchase or cause the repurchase of all Mortgage Loans in a
Mortgage Loan Group under Section 10.01(a)(i) above is exercised, BSMCC, its
designee or the Depositor, as the case may be, shall deliver to the Certificate
Trustee for deposit in the Certificate Account, by the Business Day prior to
the applicable Distribution Date, an amount equal to the repurchase price for
the Mortgage Loans being purchased by it and all property acquired with respect
to such Mortgage Loans remaining in the applicable Trust Fund. Upon the
presentation and surrender of the related Certificates, the Certificate Trustee
shall distribute all amounts in the Certificate Account related to such
Mortgage Loan Group to the related Certificateholders. Upon deposit of the
required repurchase price and following such final Distribution Date, the
Certificate Trustee shall cause the Custodian to release promptly to BSMCC or
its designee or the Depositor, as the case may be, the Mortgage Files for the
remaining Mortgage Loans for such Mortgage Loan Group, and upon the termination
of the final Trust created hereunder the Accounts shall terminate, subject to
the Certificate Trustee's obligation to hold any amounts payable to
Certificateholders in trust without interest pending final distributions
pursuant to this Section 10.01.
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(f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Section 10.01(a)(ii) above,
each Master Servicer shall deliver to the Certificate Trustee for deposit in
the Certificate Account all distributable amounts remaining in its Protected
Accounts. Upon the presentation and surrender of the Certificates of the
outstanding Series, the Certificate Trustee shall distribute to the related
Certificateholders, in accordance with their respective interests, all
distributable amounts remaining in the Certificate Account. Upon deposit by
each Master Servicer of such distributable amounts and delivery to the
Certificate Trustee of an Officer's Certificate from such Master Servicer
certifying that such deposit has been made, and following such final
Distribution Date, the Certificate Trustee shall cause the Custodian to release
promptly to BSMCC or its designee or the Depositor, as the case may be, the
Mortgage Files for the remaining Mortgage Loans, and the Accounts shall
terminate, subject to the Certificate Trustee's obligation to hold any amounts
payable to the Certificateholders in trust without interest pending final
distributions pursuant to this Section 10.01.
(g) If not all of the Certificateholders of an affected Series shall
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned written notice, the Certificate Trustee shall
give a second written notice to the remaining Certificateholders of such Series
to surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second
notice, not all such Certificates shall have been surrendered for cancellation,
the Certificate Trustee may take appropriate steps, or appoint any agent to
take appropriate steps, to contact the remaining affected Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment. (a) This Agreement may be amended from time
to time by the Depositor, the Certificate Trustee and the Master Servicers,
without notice to or the consent of any of the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions herein that may be defective
or inconsistent with any other provisions herein, to comply with any changes in
the Code or to make any other provisions with respect to matters or questions
arising under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Independent Counsel, adversely affect in any
material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Depositor, the Certificate Trustee and the Master Servicers, with the consent
of BSMCC and the Holders of Certificates of a Series evidencing Fractional
Undivided Interests aggregating not less than 51% of the Trust Fund for each
affected Series 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 Certificateholders of such Series; provided,
however, that no such amendment shall (i) reduce in any manner the amount of,
or delay the timing of, payments received on Mortgage
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Loans which are required to be distributed on any Certificate of such Series
without the consent of the Holder of such Certificate, (ii) reduce the
aforesaid percentage of Certificates of a Series the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all Certificates of such Series then outstanding, or (iii) cause any of the
Series REMICs to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel which shall be provided to the
Certificate Trustee other than at the Certificate Trustee's expense.
Notwithstanding any other provision of this Agreement, for purposes of the
giving or withholding of consents pursuant to this Section 11.02(b),
Certificates registered in the name of or held for the benefit of the
Depositor, the Master Servicers or the Certificate Trustee or any Affiliate
thereof shall be entitled to vote their Undivided Fractional Interests with
respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the
Certificate Trustee shall furnish a copy of such amendment or written
notification of the substance of such amendment to each Certificateholder, with
a copy to the Rating Agencies.
(d) In the case of an amendment under Section 11.02(b) above, it
shall not be necessary for the Certificateholders of the affected Series to
approve the particular form of such an amendment. Rather, it shall be
sufficient if the Certificateholders approve the substance of the amendment.
The manner of obtaining such consents and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Certificate Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the
Certificate Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Certificate Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Certificate Trustee's own
rights, duties or immunities under this Agreement.
Section 11.02. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other
comparable jurisdictions in which any or all of the Mortgaged Properties are
situated, and in any other appropriate public recording office or elsewhere.
The Certificate Trustee shall effect such recordation, at the expense of the
Trusts upon the request in writing of a Certificateholder, but only if such
direction is accompanied by an Opinion of Counsel (provided at the expense of
the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
Section 11.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
terminate this Agreement or any Trust, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of any Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
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(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of any Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Certificates, be construed so as to establish the Certificateholders
from time to time as partners or members of an association; nor shall any
Certificateholders 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.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon, under or with respect to this Agreement against the
Depositor, the Master Servicers or any successor to any such parties unless (i)
such Certificateholder previously shall have given to the Certificate Trustee a
written notice of a continuing default, as herein provided, (ii) the Holders of
Certificates of a Series evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund for such Series shall have made written
request upon the Certificate Trustee to institute such action, suit or
proceeding in its own name as Certificate Trustee hereunder and shall have
offered to the Certificate Trustee such reasonable indemnity as it may require
against the costs and expenses and liabilities to be incurred therein or
thereby, and (iii) the Certificate Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding.
(d) No one or more Certificateholders shall have any right by virtue
of any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, or to enforce any right under this Agreement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 11.03, each and every Certificateholder and the
Certificate Trustee shall be entitled to such relief as can be given either at
law or in equity.
Section 11.04. Acts of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by an agent duly appointed in writing. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Certificate Trustee and, where it is expressly
required, to the Depositor. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Certificate Trustee and the Depositor,
if made in the manner provided in this Section 11.04.
(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 a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate
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or affidavit shall also constitute sufficient proof of his or her 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 Certificate Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.03 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and none of the
Certificate Trustee, the Depositor, any Master Servicer or any successor to any
such parties shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of 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 or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Certificate Trustee, the Depositor, the Master Servicer, the Custodian, or any
of them, or any successor to any such party in reliance thereon, whether or not
notation of such action is made upon such Certificates.
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, unless
all Certificates are owned by the Certificate Trustee, Certificates owned by
the Certificate Trustee, the Depositor, the Master Servicers or any sub-
servicer engaged by a Master Servicer or any Affiliate thereof shall be
disregarded, except as otherwise provided in Section 11.01(b) and except that,
in determining whether the Certificate Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates which the Certificate Trustee knows to be so owned
shall be so disregarded. Certificates which have been pledged in good faith to
the Certificate Trustee, the Depositor, a Master Servicer or any Affiliate
thereof may be regarded as outstanding if the pledgor establishes to the
satisfaction of the Certificate Trustee the pledgor's right to act with respect
to such Certificates and that the pledgor is not an Affiliate of the
Certificate Trustee, the Depositor or a Master Servicer, as the case may be.
SECTION 11.05. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.06. Notices. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at or mailed by registered
mail, return receipt requested, postage prepaid, or by recognized overnight
courier, to:
(i) in the case of the Depositor, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, or to such
other address as may hereafter be furnished to the other parties hereto
in writing;
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(ii) in the case of BAFSB, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice
President, or such other address as may hereafter be furnished to the
other parties in writing;
(iii) in the case of Cendant, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or such other address as
may hereafter be furnished to the other parties in writing;
(iv) in the case of the Certificate Trustee, at its Corporate
Trust Office, or such other address as may hereafter be furnished to the
other parties hereto in writing;
(v) in the case of the Custodian, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such
other address as may hereafter be furnished to the other parties hereto
in writing;
(vi) in the case of the Rating Agencies, ▇▇▇▇▇'▇ Investors
Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: MBS
Monitoring Department and Duff & ▇▇▇▇▇▇ Credit Rating Co., ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured
Finance Group; or
(vii) in the case of BSMCC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, or such other address as may
hereafter be furnished to the other parties hereto in writing.
Any notice delivered to the Depositor, the Master Servicers, the Certificate
Trustee, the Custodian or BSMCC under this Agreement shall be effective only
upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder as
shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given, whether or not the Certificateholder receives such notice.
Section 11.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severed 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 11.08. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto.
Section 11.09. Article and Section Headings. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
71
76
Section 11.10. Counterparts. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same
instrument.
Section 11.11 Notice to Rating Agencies. The Certificate Trustee shall
use its best efforts to promptly provide notice to each Rating Agency with
respect to each of the following of which it has actual knowledge:
1. any material change or amendment to this Agreement;
2. the occurrence of any Event of Default that has not been cured;
3. the resignation or termination of a Master Servicer or the
Certificate Trustee;
4. the repurchase or substitution of Mortgage Loans;
5. the final payment to Certificateholders; and
6. any change in the location of the Certificate Account.
In addition, in accordance with Section 6.02, Section 3.12 and Section
3.13, the Certificate Trustee and the Master Servicer, respectively, shall
promptly furnish to each Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 6.02;
2. Each annual statement of compliance as described in Section 3.12;
and
3. Each annual Independent public accountants' servicing report
received as described in Section 3.13.
72
77
IN WITNESS WHEREOF, the Depositor, BAFSB, Cendant, the Certificate
Trustee and the Custodian have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CMC SECURITIES CORPORATION III,
as Depositor
By: /s/ ▇▇▇▇▇▇ ▇.▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President -
Asset and Liability Management
BANK OF AMERICA, FSB, as Master
Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Vice President
-------------------------------
CENDANT MORTGAGE CORPORATION, as
Master Servicer
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
-------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Certificate Trustee
By: /s/ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
-------------------------------
FIRST CHICAGO NATIONAL PROCESSING
CORPORATION, as Custodian
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Staff Officer
-------------------------------
Pooling and Servicing Agreement - Signature Page
78
Accepted and Agreed as to
Sections 2.02, 2.04 and 2.05 and Article X
BEAR ▇▇▇▇▇▇▇ MORTGAGE CAPITAL
CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
Pooling and Servicing Agreement - Signature Page
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
) ss.:
COUNTY OF DALLAS )
On the 31st day of March, 1998 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be a Senior
Vice President of CMC Securities Corporation III, the corporation that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
Pooling and Servicing Agreement - Signature Page
80
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN FRANCISCO )
On the 30th day of March, 1998 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇, known to me to be a Vice
President of Bank of America, FSB, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇ ▇. Kawasaki
-------------------------------------
Notary Public
[Notarial Seal]
Pooling and Servicing Agreement - Signature Page
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ )
) ss.:
COUNTY OF BURLINGTON )
On the 27th day of March, 1998 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇, known to me to be a Senior Vice
President of Cendant Mortgage Corporation, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
Pooling and Servicing Agreement - Signature Page
82
STATE OF ILL )
) ss.:
COUNTY OF ▇▇▇▇ )
On the 30th day of March, 1998 before me, a notary public in and for
said State, personally appeared ▇. ▇▇▇▇▇▇, known to me to be a Vice President
of the First National Bank of Chicago, the corporation that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
Pooling and Servicing Agreement - Signature Page
83
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the 31 day of March, 1998 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, known to me to be a Staff
Officer of First Chicago National Processing Corporation, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇. ▇▇▇
-------------------------------------
Notary Public
[Notarial Seal]
Pooling and Servicing Agreement - Signature Page
84
EXHIBIT A
FORM OF CERTIFICATE
85
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 5.01(b) OF THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN.
CMO MORTGAGE PASS-THROUGH
CERTIFICATE, SERIES 1998-_________
evidencing a beneficial interest in a pool of conventional
single-family loans transferred to the Certificate Trustee
referred to below by
CMC SECURITIES CORPORATION III
serviced by
Bank of America, FSB and Cendant Mortgage Corporation
as Master Servicers
(This Certificate does not represent an interest in
or obligation of CMC Securities Corporation III,
Bank of America, FSB, Cendant Mortgage Corporation
or The First National Bank of Chicago)
No. 0001 100/100th Undivided Interest
This certifies that THE FIRST NATIONAL BANK OF CHICAGO, is the
registered owner of a 100/100th fractional undivided interest in a pool of
conventional one- to four-family residences and individual condominium unit
mortgage loans (the "Mortgage Loans") in the loan group (the "Mortgage Loan
Group") assigned to the series (the "Series") of mortgage pass-through
certificates (the "Certificates") referred to above and transferred to the
Certificate Trustee referred to below by CMC Securities Corporation III ("CMCSC
III"). The Mortgage Loan Group was created pursuant to a Pooling and Servicing
Agreement dated as of March 1, 1998 (the "Agreement") among CMCSC III, Bank of
America, FSB and Cendant Mortgage Corporation, as master servicers
(collectively, the Master Servicers"), and The First National Bank of Chicago,
as certificate trustee (the "Certificate Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereinbelow. Mortgage Loans having
an aggregate principal amount of $________ as of March 1, 1998 (the "Cut-Off
Date"), after deducting all payments due on or before the Cut-Off Date, were
transferred and assigned to the Mortgage Loan Group for this Series. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the holder of this Certificate
by virtue of the acceptance hereof assents and by
86
which such holder is bound. Capitalized terms not defined herein shall have
the meanings set forth in the Agreement.
Pursuant to the Agreement, the Certificate Trustee will distribute on
the 25th day of the month, or if such day is not a Business Day, then the next
succeeding Business Day, beginning in April 1998 (each, a "Distribution Date"),
to the Person in whose name this Certificate is registered on the last Business
Day of the month immediately preceding the month of such Distribution Date,
such Person's pro rata share (based on the aggregate fractional undivided
interest evidenced by this Certificate) of the aggregate amount required to be
distributed to the Holders of the Series 1998-1 Certificates pursuant to
Section 6.01 of the Agreement. For the purposes hereof, amounts received in
connection with the liquidation of defaulted Mortgage Loans in the Mortgage
Loan Group through Insurance Proceeds, foreclosure or trustee's sales proceeds
or otherwise, shall be deemed to be amounts received on Mortgage Loans in the
Mortgage Loan Group.
Distributions on this Certificate will be made by the Certificate
Trustee by wire transfer in immediately available funds for the account of the
Person entitled thereto as specified by such Person in accordance with the
terms of the Agreement or by such other method as shall be acceptable to both
the Certificate Trustee and such Person. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice by the
Certificate Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for that purpose by the Certificate Trustee in the City of Chicago,
in the State of Illinois.
Unless the certificate of authentication hereon has been executed by the
Certificate Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
This Certificate is one of a duly authorized issue of Certificates
designated as set forth above (herein called the "Certificates") and
representing the fractional undivided interest in the Trust Fund created
pursuant to the Agreement.
The Certificates do not represent an obligation of, or an interest in,
CMCSC III, the Master Servicers, or the Certificate Trustee and are not insured
or guaranteed by any governmental agency or other entity. The Certificates are
limited in right of payment to certain collections and recoveries respecting
the Mortgage Loans in the Mortgage Loan Group, all as more specifically set
forth hereinabove and in the Agreement.
As provided in the Agreement, withdrawals from the Certificate Account
may be made by the Certificate Trustee from time to time for purposes other
than distributions to Certificateholders, such purposes including reimbursement
to the related Master Servicers of certain expenses incurred, by them in
connection with the Mortgage Loans in the Mortgage Loan Group.
The Agreement permits, with respect to this Series and with certain
exceptions therein provided, the amendment thereof and the modification of the
rights and obligations of the Master Servicers and the rights of the
Certificateholders of this Series under the Agreement at any time by CMCSC III,
the Master Servicers and the Certificate Trustee with the consent of BSMCC and
the
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87
holders of Certificates of this Series evidencing fractional undivided
interests aggregating not less than 51% of the Trust Fund. Any such amendment
or modification shall be effective only as to this Series. Any consent to such
an amendment or modification by the holder of this Certificate shall be
conclusive and binding on such holder and upon all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefore or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the holders of any of
the Certificates of this Series.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register of the Certificate Registrar, which initially is The First National
Bank of Chicago, upon surrender of this Certificate for registration of
transfer at the office or agency maintained by the Certificate Registrar, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar, duly executed by the holder hereof
or such holder as attorney duly authorized in writing, and thereupon one or
more new Certificates of this Series of authorized denominations evidencing the
same aggregate fractional undivided interest in the Trust Fund will be issued
to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates in this Series are exchangeable for new
Certificates of this Series of authorized denominations evidencing the same
aggregate fractional undivided interest in the Trust Fund, as requested by the
holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Certificate Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
CMCSC III, the Master Servicers, the Certificate Trustee, the
Certificate Registrar and any agent of the Master Servicer, the Certificate
Trustee or the Certificate Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither
CMCSC III, the Master Servicers, the Certificate Trustee, the Certificate
Registrar nor any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and each Trust Fund shall
terminate upon (i) the repurchase by or at the direction of BSMCC or its
designee (or if BSMCC or its designee does not exercise such option, the
Depositor), but only at the time specified below of all Mortgage Loans in the
Mortgage Loan Group of such Series and all REO Property remaining in the Trust
relating to such Mortgage Loan Group at a price equal to the aggregate Class
Current Principal Balances of the Outstanding Bonds of the related Bond Group,
plus accrued and unpaid interest thereof through the end of the month preceding
the month in which such purchase occurs; or (ii) the later of the making of the
final payment or other liquidation, or any advance with respect thereto, of the
last Mortgage Loan remaining in the Trust Fund of such Series or the
disposition of all property acquired with respect to any Mortgage Loan of such
Series.
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88
The right of BSMCC or its designee or the Depositor, as the case may be,
to repurchase all Mortgage Loans in a Mortgage Loan Group as described in item
(i) above shall be exercisable only if the aggregate unpaid principal balance
of the Mortgage Loans in such Mortgage Loan Group at the time of any such
repurchase is less than 5% of the portion of the Cut-off Date Balance allocable
to such Mortgage Loan Group.
The Certificate Trustee's signature shall be for authentication purposes
only and neither the Certificate Trustee nor any person signing on its behalf
shall have liability on this Certificate (other than for the certificate of
authentication).
[Remainder of Page Intentionally Left Blank]
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89
IN WITNESS WHEREOF, CMCSC III has caused this Certificate to be duly
executed.
CMC SECURITIES CORPORATION III
By:
----------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Vice President
Attest
----------------------------
Assistant Secretary
CERTIFICATE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to
in the within-mentioned Agreement.
THE FIRST NATIONAL BANK OF CHICAGO,
as Certificate Trustee
By:
------------------------------------------
Name:
------------------------------
Title:
------------------------------
Dated: March 31, 1998
90
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________ (Please print
or typewrite name and address including postal zip code of assignee)
a fractional undivided interest equal to ______________________ of the
Fractional Undivided Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register.
I (we) further direct the Certificate Registrar to issue a new
Certificate of like Series of a fractional undivided interest equal to
_____________________________________________, to the above named assignee and
deliver such Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
--------------------
---------------------------------------------
tax identification Signature by or on behalf of assignor
no. of assignee: (signature must be signed as registered)
------------------- ---------------------------------------------
(signature must be guaranteed by a
commercial bank or trust company or
a member firm of a major stock exchange)
The assignee should include the following for the information of the
Certificate Trustee:
Distributions shall be made by wire transfer in immediately available
funds to
__________________________________________________________________________ for
the account
of__________________________________________________________________ account
number ______________________________________________________, or, if mailed by
check, to __________________________________________. Applicable statements
should be mailed to__________________________________________________
________________________________________________________________________________
________________________________________.
This information is provided by _____________________________ the
assignee named above, or _____________________________________ as its agent.
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91
EXHIBIT B-1
GROUP 1 MORTGAGE LOAN SCHEDULE
(Intentionally Omitted)
92
EXHIBIT B-2
GROUP 2 MORTGAGE LOAN SCHEDULE
(Intentionally Omitted)
93
EXHIBIT B-3
GROUP 3 MORTGAGE LOAN SCHEDULE
(Intentionally Omitted)
94
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF BSMCC
CONCERNING THE MORTGAGE LOANS
The Seller hereby represents and warrants to the Purchaser as of the
Closing Date or such other date as may be specified below with respect to the
Mortgage Loans being sold by it that:
(a) the Mortgage creates a first lien or a first priority ownership
interest in the estate in fee simple in real property securing the related
Mortgage Note, free and clear of all adverse claims, liens and encumbrances
having priority over the first lien of the Mortgage subject only to (1) the
lien of non-delinquent current real property taxes and assessments not yet due
and payable, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording which
are acceptable to mortgage lending institutions generally and either (A) which
are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(3) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property;
(b) the terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by applicable law, and copies of which written instruments are
included in the Mortgage File; and no other instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in whole or
in part, from the terms thereof in connection with an assumption agreement,
which assumption agreement is part of the Mortgage File and the terms of which
are reflected in the Mortgage Loan Schedule;
(c) all buildings upon the Mortgaged Property are insured by a
generally acceptable insurer pursuant to standard hazard insurance policies and
all such standard hazard policies are in effect and on the date of origination
contained a standard mortgagee clause naming BAFSB, BANTSA or Cendant, as
applicable, and its respective successors in interest as loss payee, and such
policies are still in effect and all premiums due thereon have been paid; if
the Mortgaged Property is located in an area identified by the Federal
Emergency Management Agency is having special flood hazards under the Flood
Disaster Protection Act of 1973, as amended, such Mortgaged Property is covered
by flood insurance in an amount not less than that set forth in Section
3.10(d); the Mortgage
C-1
95
obligates the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(d) any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects;
(e) subject to permitted exceptions set forth in (a), the Mortgage is
a valid, subsisting and enforceable first lien on the related Mortgaged
Property, including all buildings on such Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems affixed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance; the Mortgage and the Mortgage Note
do not contain any evidence of any other security interest or other interest or
right thereto; such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first lien of the Mortgage subject only
to permitted encumbrances set forth in clause (a)(1), (2) and (3) herein; any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein;
(f) the Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors, and the Seller has taken all action necessary to transfer
such rights of enforceability to the Purchaser; all parties to the Mortgage
Note and the Mortgage had the legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note and the Mortgage; and the Mortgage
Note and the Mortgage have been duly and properly executed by such parties; the
proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site improvements and as to disbursements of any escrow
funds therefor have been complied with;
(g) the Mortgage Loan is covered by an ALTA lender's title insurance
policy or other generally acceptable form of policy of title insurance, issued
by a title insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring (subject to the exceptions contained in
(a) (1), (2) and (3) above) BAFSB, BANTSA or Cendant, as applicable, its
C-2
96
respective successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan; BAFSB, BANTSA
or Cendant, as applicable, is the sole insured of its respective lender's title
insurance policy, such respective lender's title insurance policy is in full
force and effect and will be in full force and effect upon the consummation of
the transactions contemplated by this Agreement and the Pooling and Servicing
Agreement and will inure to the benefit of the Purchaser and its assigns
without any further act; and no claims have been made under such lender's title
insurance policy, and no prior holder of the related Mortgage has done, by act
or omission, anything which would impair the coverage of such lender's title
insurance policy;
(h) the Mortgage Loan was originated or acquired by BAFSB or BANTSA,
in the case of a BA Mortgage Loan, or Cendant, in the case of a Cendant
Mortgage Loan; the Mortgage Loan complies in all material respects with all the
terms, conditions and requirements of the underwriting standards of BAFSB,
BANTSA or Cendant, as applicable, in effect at the time of origination of such
Mortgage Loan; provided, however, that certain Mortgage Loan may have
characteristics outside of such underwriting guidelines where compensating
factors are present such as are acceptable to the mortgage banking industry;
the Mortgage Notes and Mortgage are on uniform ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac
instruments or are on forms acceptable to Fannie Mac or ▇▇▇▇▇▇▇ Mac; the
Mortgage Loan bears interest at a fixed rate as set forth in the Mortgage Loan
Schedule, and Monthly Payments under the Mortgage Note are due and payable on
the first day of each month; and the Mortgage Loan contains the usual and
enforceable provisions of the originator at the time of origination for the
acceleration of the payment of the unpaid principal amount if the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;
(i) the related Mortgage contains enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure; and
there is no homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;
(j) if the Mortgage constitutes a deed of trust, a trustee, duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale or attempted sale
after default by the Mortgagor;
(k) the Mortgage File contains an appraisal of the related Mortgaged
Property made and signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser (as defined
C-3
97
in the BA Agreement and the Cendant Agreement), approved by BAFSB, BANTSA or
Cendant, as applicable; and the appraisal is in a form generally acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(l) the related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;
(m) the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of mortgage loans similar to the
related Mortgage Loan;
(n) the Mortgage Loan has an original term to maturity of not more
than thirty years, with interest payable in arrears on the first day of each
month; and the Mortgage Loan does not contain terms or provisions which would
result in negative amortization;
(o) each of the Mortgaged Properties consists of a single parcel of
real property with a single-family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a condominium
project or an individual unit in a planned unit development; no Mortgaged
Property consists of a single parcel of real property with a cooperative
housing development erected thereon; no Mortgaged Property is a a mobile home
or manufactured dwelling; and to the best of the Seller's knowledge each
Mortgaged Property is lawfully occupied under applicable law;
(p) [RESERVED]
(q) the assignment of Mortgage from the Seller to the Certificate
Trustee is in recordable form and is acceptable for recording under the laws of
the jurisdiction in which the related Mortgaged Property is located;
(r) Each of BAFSB, BANTSA and Cendant is, and each Mortgage Loan was
originated by, a savings and loan association, savings bank, commercial bank,
credit union, insurance company or similar institution which is supervised and
examined by a federal or State authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Section 203 and 211 of
the National Housing Act;
(s) the information set forth in the Final Mortgage Loan Schedule is
true, complete and correct in all material respects as of the Cut-off Date;
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98
(t) the Mortgage Loan has not been delinquent thirty (30) days or
more on more than one occasion during the twelve months preceding the Cut-off
Date; and as of the Closing Date, the Mortgage Loan is not delinquent in
payment more than 30 days and has not been dishonored; there are no defaults
under the terms of the Mortgage Loan; and, except in the case of a Buydown
Loan, none of the Seller, BAFSB, BANTSA or Cendant has advanced funds, or
induced, solicited or knowingly received any advance of funds from a party
other than the owner of the Mortgaged Party subject to the related Mortgage,
directly or indirectly, for the payment of any amount required by the Mortgage
Loan;
(u) there are no delinquent taxes or other outstanding charges
affecting the related Mortgaged Property, and there are no liens against the
Mortgaged Property resulting from any delinquent assessments;
(v) the Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage Note or
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(w) the Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been
released from the lien of such Mortgage, in whole or in part, except with
respect to certain releases in part that do not materially affect the value of
the Mortgaged Property, nor has any instrument been executed that would effect
any such satisfaction, release, cancellation, subordination or rescission;
(x) immediately prior to the transfer and assignment to the
Purchaser, the Mortgage Note and the Mortgage were not subject to an assignment
or pledge, and the Seller had good and marketable title to and was the sole
owner thereof and had full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest;
(y) there is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
C-5
99
(z) there are no mechanics', or similar liens or claims which have
been filed for work, labor or material affecting the related Mortgaged Property
which are or may be liens to or equal to the lien of the related Mortgage;
(aa) all improvements subject to the Mortgage lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) except for de minimis
encroachments permitted by the ▇▇▇▇▇▇ ▇▇▇ Guide (MBS Special Servicing Option)
and noted on the appraisal, and no improvements on adjoining properties
encroach upon the Mortgaged Property except those which are insured against by
the title insurance policy referred to in clause (g) above and, all
improvements on such Mortgaged Property comply with all applicable zoning and
subdivision laws and ordinances;
(bb) the Mortgaged Property at origination of the Mortgage Loan was
and currently is free of damage and waste or any such damage and waste is
adequately covered by an insurance policy, and at origination of the Mortgage
Loan there was, and there currently is, no proceeding pending for the total or
partial condemnation thereof;
(cc) no Mortgage Loan has a Loan-to-Value Ratio in excess of 95.00%.
The original Loan-to-Value Ratio of each Mortgage Loan either was not more than
95.00% or the excess over 80.00% is insured as to payment defaults by a Primary
Mortgage Insurance Policy issued by a primary mortgage insurer acceptable to
▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac until the Loan-to-Value Ratio of such Mortgage Loan
is reduced to 80.00%;
(dd) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in substantial
compliance with any and all applicable licensing requirements of the laws of
the state wherein the related Mortgaged Property is located, and (B) (1)
organized under the laws of such state, or (2) qualified to do business in such
state, or (3) federal savings and loan associations, national banks, a Federal
Home Loan Bank or the Federal Reserve Bank, or (4) not doing business in such
state;
(ee) The Mortgage Loan does not contain "graduated payment" features;
and
(ff) The Mortgagor is not in bankruptcy.
It is understood and agreed that the representations and warranties set
forth herein will inure to the benefit of the Purchaser, its successors and
assigns, notwithstanding any restrictive or qualified
C-6
100
endorsement on any Mortgage Note or assignment of Mortgage or the examination
of any Mortgage File. Upon any substitution for a Mortgage Loan, the
representations and warranties set forth above shall be deemed to be made by
the Seller as to any Substitute Mortgage Loan as of the date of substitution.
Upon discovery or receipt of notice by the Seller, the Purchaser or the
Certificate Trustee of a breach of any representation or warranty of the Seller
set forth herein which materially and adversely affects the value of the
interests of the Purchaser, the Certificateholder or the Certificate Trustee in
any of the Mortgage Loans delivered to the Purchaser pursuant to this
Agreement, the party discovering or receiving notice of such breach shall give
prompt written notice to the others. In the case of any such breach of a
representation or warranty set forth herein, within 90 days from the date of
discovery by the Seller, or the date the Seller is notified by the party
discovering or receiving notice of such breach (whichever occurs earlier), the
Seller will (i) cure or cause to be cured such breach in all material respects,
(ii) purchase or cause to be purchased the affected Mortgage Loan at the
applicable Purchase Price or (iii) if within two years of the Closing Date,
substitute or cause to be substituted a qualifying Substitute Mortgage Loan in
exchange for such Mortgage Loan. The obligations of the Seller to cure,
purchase or substitute (or to cause the cure, purchase or substitution of) a
qualifying Substitute Mortgage Loan shall constitute the Purchaser's, the
Certificate Trustee's and the Certificateholder's sole and exclusive remedy
under this Agreement or otherwise respecting a breach of representations or
warranties hereunder with respect to the Mortgage Loans, except for the
obligation of the Seller to indemnify the Purchaser for such breach as set
forth in and limited by Section 14 of the Mortgage Loan Purchase Agreement.
Any cause of action against the Seller or relating to or arising out of
a breach by the Seller of any representations and warranties made herein shall
accrue as to any Mortgage Loan upon (i) discovery of such breach by the Seller
or notice thereof by the party discovering such Breach and (ii) failure by the
Seller to cure such breach, purchase such Mortgage Loan or substitute a
qualifying Substitute Mortgage Loan pursuant to the terms hereof.
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EXHIBIT D
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: [Custodian]
RE: Pooling and Servicing Agreement dated as of
March 1, 1998, among CMC Securities Corporation III, as
Depositor, Cendant Mortgage Corporation and
Bank of America, FSB, as Master Servicers, First Chicago National
Processing Corporation, as Custodian, and The First National Bank of
Chicago, as Certificate Trustee
In connection with the administration of the Mortgage Loans held by you,
as Custodian, pursuant to the above-captioned Pooling and Servicing Agreement,
we request the release, and hereby acknowledge receipt, of the Mortgage File
for the Mortgage Loan described below, for the reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
______ 1. Mortgage Paid in Full and proceeds have been deposited into the
Custodial Account
______ 2. Foreclosure
______ 3. Substitution
______ 4. Other Liquidation
______ 5. Nonliquidation Reason:
---------------------
By:
-------------------------
(authorized signer)
Issuer:
---------------------
Address:
--------------------
Date:
-----------------------
D-1
102
Custodian
First Chicago National Processing Corporation
Please acknowledge the execution of the above request by your signature and
date below:
---------------------------- ----------------------------
Signature Date
Documents returned to Custodian:
---------------------------- ----------------------------
Custodian Date
Date: , 19
---------------------- --
FIRST CHICAGO NATIONAL PROCESSING
CORPORATION
By:
------------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
D-2
103
EXHIBIT E
FORM OF PURCHASER REPRESENTATION LETTER
[Purchaser Letterhead]
[Date]
[Issuer]
[Certificate Registrar]
and
[Seller #1]
Ladies and Gentlemen:
In connection with the purchase by [Purchaser] from [Seller #1] of
approximately $________________ aggregate principal amount of Pass-Through
Certificates, CMC Securities Corporation III Collateralized Mortgage
Obligations, Series 1998-1 ("the Certificates"), administered by CMC Securities
Corporation III, we hereby represent and covenant to you the following:
i. [Purchaser] is acquiring the Certificates for itself and not for
any other persons or entity.
ii. [Purchaser] is an "accredited investor" as defined in Rule 501(a)
under the Securities Act of 1933 and is experienced in making
investments in securities comparable to the Certificates.
iii. [Purchaser] has been furnished with all information regarding the
Certificates which it has requested from [Seller #1] or [Issuer].
iv. [Purchaser] has not offered or sold any of the Certificates to,
solicited offers to buy any Certificates from, or otherwise
approached or negotiated with respect to the Certificates with,
any prospective purchaser, or taken any other action which would
result in a violation of Section 5 of the Securities Act of 1933
or any applicable state securities laws.
v. [Purchaser] is acquiring the Certificates for investment purposes
and not with a view to resale.
▇-▇
▇▇▇
▇▇. [Purchaser] will not transfer, sell, pledge, encumber or
otherwise dispose of the Certificates in any manner which would
result in a violation of Section 5 of the Securities Act of 1933
or any applicable state securities laws.[Purchaser] (i) is not an
employee benefit plan, trust or account, including an individual
retirement account, that is subject to the Employee Retirement
Income Security Act of 1974, as amended, or that is described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as
amended, (any such plan, trust or account being referred to as a
"Plan") and (ii) has not acquired and is not acquiring the
Certificates with plan assets, within the meaning of 29 CFR
2510.3-101, of a Plan.
Very truly yours,
[Purchaser]
By:
----------------------------------
Name:
------------------------
Title:
-----------------------
▇-▇
▇▇▇
▇▇▇▇▇▇▇ F
[RESERVED]
106
EXHIBIT G
FORM OF INITIAL CERTIFICATION
CMC Securities Corporation III
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Cendant Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bank of America, FSB
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The First National Bank of Chicago
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement dated as of March 1, 1998,
among CMC Securities Corporation III, as depositor,
Cendant Mortgage Corporation, Bank of America, FSB, as
Master Servicers, First Chicago National Processing
Corporation, as Custodian, and The First National Bank of
Chicago, as Certificate Trustee Mortgage Pass-Through
Certificates, Series 1998-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as
otherwise noted on the attached exception report, that as to each Mortgage Loan
listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on the attachment hereto) it has reviewed the Mortgage File and the
Mortgage Loan Schedule and has determined that: (i) all documents required to
be included in the Mortgage File pursuant to the Pooling and Servicing
Agreement are in its possession; (ii) such documents have been reviewed by it
and appear regular on their face, have, where applicable, been executed and
relate to such Mortgage Loan; and (iii) based on examination by it, and only as
to such documents, the information set forth in the Mortgage Loan Schedule as
to Mortgagor Name, original principal
G-1
107
balance and loan number respecting such Mortgage Loan is correct and accurately
reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation that any documents specified in subclauses (iv), (v) and (vii)
of Section 2.01(c) should be included in any Mortgage File. The undersigned
makes no representations as to: (i) the validity, legality, enforceability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
By:
-----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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108
EXHIBIT H
FORM OF FINAL CERTIFICATION
CMC Securities Corporation III
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Cendant Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The First National Bank of Chicago
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement dated as of March 1, 1998, among
CMC Securities Corporation III, as depositor, Bank of America,
FSB and Cendant Mortgage Corporation, as master servicers, First
Chicago National Corporation, as custodian and The First National
Bank of Chicago, as Certificate Trustee Mortgage Pass-Through
Certificates, Series 1998-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as
otherwise noted on the attached exception report, that as to each Mortgage Loan
listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on the attachment hereto) it has received the documents set forth in
Section 2.01 and has determined that (i) all documents required to be included
in the Mortgage File pursuant to the Pooling and Servicing Agreement are in its
possession; (ii) such documents have been reviewed by it and appear regular on
their face, have, where applicable, been executed and relate to such Mortgage
Loan; and (iii) based on examination by it, and only as to such documents, the
information set forth in the Mortgage Loan Schedule as to Mortgagor name,
original principal balance and loan number respecting such Mortgage Loan is
correct and accurately reflects the information in the Mortgage Loan File.
The undersigned has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing
H-1
109
Agreement. The undersigned makes no representation that any documents
specified in subclauses (iv), (v) and (vii) of Section 2.01(c) should be
included in any Mortgage File. The undersigned makes no representations as to:
(i) the validity, legality, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
By:
-----------------------------------
Name:
--------------------------------
Title:
-------------------------------
H-2
110
EXHIBIT I-1
MASTER SERVICER'S REPORT (CENDANT)
(Intentionally Omitted)
111
EXHIBIT I-2
MASTER SERVICER'S REPORT (BAFSB)
(Intentionally Omitted)
112
EXHIBIT J
LIST OF MORTGAGE LOANS FOR WHICH MORTGAGE NOTES ARE LOST
(Intentionally Omitted)