Exhibit 4.1
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▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
Depositor
CENDANT MORTGAGE CORPORATION,
Master Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 1999
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Mortgage Pass-Through Certificates, Series 1999-2
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS..........................................................................3
Section 1.02 ACCOUNTING............................................................................34
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 CONVEYANCE OF MORTGAGE LOANS..........................................................34
Section 2.02 ACCEPTANCE OF TRUST FUND BY THE TRUSTEE...............................................37
Section 2.03 REPURCHASE OR SUBSTITUTION OF MORTGAGE LOANS BY THE ORIGINATOR OR ▇▇▇▇▇▇'▇ GATE.......38
Section 2.04 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER......................41
Section 2.05 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.......................................43
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 MASTER SERVICER TO ACT AS MASTER SERVICER.............................................45
Section 3.02 SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND SUB-SERVICERS................47
Section 3.03 SUCCESSOR SUB-SERVICERS...............................................................48
Section 3.04 LIABILITY OF THE MASTER SERVICER......................................................48
Section 3.05 NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS AND TRUSTEE OR
CERTIFICATEHOLDERS....................................................................49
Section 3.06 ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY TRUSTEE......................49
Section 3.07 COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS..........................................49
Section 3.08 SUB-SERVICING ACCOUNTS................................................................50
Section 3.09 COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; SERVICING ACCOUNTS................50
Section 3.10 COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT...........................................51
Section 3.11 WITHDRAWALS FROM THE COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT......................54
Section 3.12 INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND THE DISTRIBUTION ACCOUNT............56
Section 3.13 MAINTENANCE OF THE PRIMARY INSURANCE POLICIES; COLLECTIONS THEREUNDER.................57
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Section 3.14 MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND FIDELITY COVERAGE........58
Section 3.15 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.............................60
Section 3.16 REALIZATION UPON DEFAULTED MORTGAGE LOANS.............................................61
Section 3.17 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.......................................63
Section 3.18 SERVICING COMPENSATION................................................................64
Section 3.19 REPORTS TO THE TRUSTEE; COLLECTION ACCOUNT STATEMENTS.................................64
Section 3.20 STATEMENT AS TO COMPLIANCE............................................................65
Section 3.21 INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT......................................65
Section 3.22 ACCESS TO CERTAIN DOCUMENTATION.......................................................66
Section 3.23 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.....................................66
Section 3.24 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT INTEREST SHORTFALLS.......69
Section 3.25 ADMINISTRATION OF BUYDOWN FUNDS.......................................................70
Section 3.26 OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF LOAN RATES AND MONTHLY PAYMENTS......70
ARTICLE IV
FLOW OF FUNDS
Section 4.01 DISTRIBUTIONS.........................................................................71
Section 4.02 ALLOCATION OF LOSSES..................................................................75
Section 4.03 METHOD OF DISTRIBUTION................................................................76
Section 4.04 DISTRIBUTIONS ON BOOK-ENTRY CERTIFICATES..............................................76
Section 4.05 STATEMENTS............................................................................76
Section 4.06 REMITTANCE REPORTS; ADVANCES..........................................................79
ARTICLE V
THE CERTIFICATES
Section 5.01 THE CERTIFICATES......................................................................81
Section 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. ..............................82
Section 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.....................................87
Section 5.04 PERSONS DEEMED OWNERS.................................................................88
Section 5.05 APPOINTMENT OF PAYING AGENT...........................................................88
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ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 LIABILITY OF THE MASTER SERVICER AND THE DEPOSITOR....................................88
Section 6.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE MASTER SERVICER
OR THE DEPOSITOR......................................................................89
Section 6.03 LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.............................89
Section 6.04 MASTER SERVICER NOT TO RESIGN.........................................................90
Section 6.05 DELEGATION OF DUTIES..................................................................90
ARTICLE VII
DEFAULT
Section 7.01 MASTER SERVICER EVENTS OF TERMINATION.................................................91
Section 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR..............................................93
Section 7.03 WAIVER OF MASTER SERVICER EVENTS OF TERMINATION.......................................94
Section 7.04 NOTIFICATION TO CERTIFICATEHOLDERS....................................................95
Section 7.05 SURVIVABILITY OF MASTER SERVICER LIABILITIES..........................................95
ARTICLE VIII
THE TRUSTEE
Section 8.01 DUTIES OF TRUSTEE.....................................................................95
Section 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.................................................97
Section 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.................................98
Section 8.04 TRUSTEE MAY OWN CERTIFICATES..........................................................99
Section 8.05 MASTER SERVICER TO PAY TRUSTEE FEES AND EXPENSES.....................................100
Section 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.................................................100
Section 8.07 RESIGNATION OR REMOVAL OF TRUSTEE....................................................101
Section 8.08 SUCCESSOR TRUSTEE. .................................................................102
Section 8.09 MERGER OR CONSOLIDATION OF TRUSTEE. ................................................102
Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE........................................102
Section 8.11 LIMITATION OF LIABILITY. ...........................................................104
Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF CERTIFICATES........................104
Section 8.13 SUITS FOR ENFORCEMENT................................................................104
Section 8.14 WAIVER OF BOND REQUIREMENT...........................................................105
Section 8.15 WAIVER OF INVENTORY, ACCOUNTING AND APPRAISAL REQUIREMENT............................105
Section 8.16 PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION; ADDITIONAL
INFORMATION..........................................................................105
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ARTICLE IX
REMIC ADMINISTRATION
Section 9.01 REMIC ADMINISTRATION.................................................................106
ARTICLE X
TERMINATION
Section 10.01 TERMINATION..........................................................................110
Section 10.02 ADDITIONAL TERMINATION REQUIREMENTS..................................................111
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 AMENDMENT............................................................................112
Section 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS...............................................113
Section 11.03 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...........................................114
Section 11.04 GOVERNING LAW; JURISDICTION..........................................................114
Section 11.05 NOTICES..............................................................................115
Section 11.06 SEVERABILITY OF PROVISIONS...........................................................115
Section 11.07 ARTICLE AND SECTION REFERENCES.......................................................116
Section 11.08 NOTICE TO THE RATING AGENCIES........................................................116
Section 11.09 FURTHER ASSURANCES...................................................................117
Section 11.10 BENEFITS OF AGREEMENT................................................................117
Section 11.11 ACTS OF CERTIFICATEHOLDERS...........................................................117
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EXHIBITS:
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Exhibit A Form of Class A Certificates
Exhibit B Form of Class B Certificates
Exhibit C-1 Form of Class R Certificates
Exhibit C-2 Form of Class M Certificates
Exhibit D Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Transferor Certificate
Exhibit F-2 Form of Transferee Representation Letter
Exhibit F-3 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit
Exhibit G Form of ERISA Representation Letter
Exhibit H Form of Lost Note Affidavit
Exhibit I-1 Form of Trustee's Initial Certification
Exhibit I-2 Form of Trustee's Final Certification
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This Pooling and Servicing Agreement is dated as of April 1, 1999 (the
"Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., as depositor (the
"Depositor"), CENDANT MORTGAGE CORPORATION, as master servicer (the "Master
Servicer") and NORWEST BANK MINNESOTA, National Association, as trustee (the
"Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans (as defined herein). As provided herein, the REMIC
Administrator will make an election to treat the entire segregated pool of
assets described in the definition of Trust Fund (as defined herein), and
subject to this Agreement as a real estate mortgage investment conduit (a
"REMIC") for federal income tax purposes will be designated as the "REMIC." The
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-IO, Class A-PO,
Class M, Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates
will be "regular interests" in the Trust Fund and the Class R Certificates will
be the sole class of "residual interests" therein for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The "latest
possible maturity date" for federal income tax purposes of all interests created
hereby will be the Latest Possible Maturity Date.
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance or Original
Class Certificate Notional Amount, as the case may be, for each Class of
Certificates comprising the interests in the Trust Fund created hereunder:
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Original Class Certificate Initial Pass Assumed Final Maturity
Class Principal-Balance(1) Through-Rate Dates
----- -------------------- ------------ -----
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A-1 $ 102,000,000 6.50% May 1, 2030
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A-2 $ 13,806,808 6.50% May 1, 2030
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A-3 $ 20,227,768 6.50% May 1, 2030
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A-4 $ 54,786,000 6.50% May 1, 2030
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A-5 $ 11,457,000 6.50% May 1, 2030
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A-IO (2) (3) May 1, 2030
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A-PO $ 965,563 (4) May 1, 2030
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M $ 4,457,554 6.50% May 1, 2030
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B-1 $ 1,910,380 6.50% May 1, 2030
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B-2 $ 849,058 6.50% May 1, 2030
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B-3 $ 742,926 6.50% May 1, 2030
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B-4 $ 424,529 6.50% May 1, 2030
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B-5 $ 636,793 6.50% May 1, 2030
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Class R $ 100 6.50% May 1, 2030
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Total $ 212,264,479
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(1) Plus or minus 5%
(2) Original Notional Amount of $181,024,414. No principal will be
paid on the Class A-IO Certificates.
(3) The Class A-IO will accrue interest at a variable rate. The
rate for the first Interest Accrual Period will be
approximately 0.433609%.
(4) No interest will accrue on the principal balance of the Class
A-PO Certificates.
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
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Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest
will be calculated for all Certificates on the basis of a 360-day year
consisting of twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
"Account": Any of the Collection Account and Distribution Account.
"Accrued Certificate Interest": An amount equal to the interest accrued
during the related Interest Accrual Period on the Certificate Principal Balance
or Notional Balance, as applicable of each Class of Certificates at the
then-applicable Pass-Through Rate, Accrued Certificate Interest on any Class of
Certificates will be reduced by the amount of (i) Prepayment Interest Shortfalls
(to the extent not offset by the Master Servicer with a payment of Compensating
Interest as provided in Section 3.24, (ii) the interest portion (adjusted to the
Net Mortgage Rate) of Realized Losses (including Excess Special Losses and
Extraordinary Losses) not allocated solely to one or more specific Classes of
Certificates pursuant to Section 4.02, (iii) the interest portion of Advances
previously made with respect to a Mortgage Loan or REO Property which remained
unreimbursed following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property that were made with respect to delinquencies that were
ultimately determined to be Excess Losses or Extraordinary Losses and (iv) any
other interest shortfalls not covered by the subordination provided by the Class
M Certificates and Class B Certificates, including Relief Act Shortfalls, with
all such reductions allocated among all of the Certificates in proportion to
their respective amounts of Accrued Certificate Interest payable on such
Distribution Date which would have resulted absent such reductions.
"Advance": As to any Mortgage Loan or REO Property, any advance made by
the Master Servicer in respect of any Distribution Date pursuant to Section
4.07.
"Adverse REMIC Event": As defined in Section 9.01(f) hereof.
"Affiliate": With respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this
definition, "control" means the power to direct the management and policies of a
Person, directly or indirectly, whether through ownership of voting securities,
by contract or otherwise and "controlling" and "controlled" shall have meanings
correlative to the foregoing.
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"Agreement": This Pooling and Servicing Agreement and all amendments
and supplements hereto.
"Applicable Credit Support Percentage": With respect to any Class of
Certificates, the sum of the related Class Subordination Percentages of such
Class and all Classes of Subordinated Certificates which have a lower relative
priority of payment than such Class.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Assumed Final Maturity Date": As to each Class of Certificates, the
date set forth as such in the Preliminary Statement.
"Available Funds": With respect to any Distribution Date, an amount
equal to the excess of (i) the sum of (a) the aggregate of the related Monthly
Payments received on or prior to the Determination Date, (b) Liquidation
Proceeds, Insurance Proceeds, Principal Prepayments and other unscheduled
recoveries of principal and interest in respect of the Mortgage Loans during the
related Prepayment Period, (c) the aggregate of any amounts received in respect
of a related REO Property withdrawn from any REO Account and deposited in the
Collection Account for such Distribution Date, (d) the aggregate of any amounts
deposited in the Collection Account by the Master Servicer in respect of related
Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate
of any related Advances made by the Master Servicer for such Distribution Date,
over (ii) the sum of (a) related amounts reimbursable or payable to the Master
Servicer pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts
deposited in the Collection Account or the Distribution Account, as the case may
be, in error and (d) any Extraordinary Trust Fund Expenses.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Bankruptcy Loss Coverage Amount": As of any date of determination
prior to the first anniversary of the Cut-off Date, an amount equal to the
excess, if any, of (A) $100,000 over (B) the aggregate amount of Bankruptcy
Losses allocated solely to one or more specific Classes of Certificates in
accordance with Section 4.02. As of any date of determination on or after the
first anniversary of the Cut-off Date, an amount equal to the excess, if any, of
(1) the lesser of (a) the Bankruptcy Amount calculated as of the close of
business on the Business Day immediately preceding the most recent anniversary
of the Cut-off Date coinciding with or preceding such date of determination (or,
if such date of determination is an anniversary of the Cut-off Date, the
Business Day immediately preceding such date of determination) (for purposes of
this definition, the "Relevant Anniversary") and (b) the greater of
(A) the greater of (i) 0.0006 times the aggregate principal
balance of all the Mortgage Loans in the Mortgage Pool as of the
Relevant Anniversary having a
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Loan-to-Value Ratio at origination which exceeds 75% and (ii) $100,000;
and (B) the greater of (i) the product of (x) an amount equal to the
largest difference in the related Monthly Payment for any Non-Primary
Residence Loan remaining in the Mortgage Pool which had an original
Loan-to-Value Ratio greater than 80% that would result if the Net
Mortgage Rate thereof was equal to the greater of (I) 5% or (II) the
weighted average (based on the principal balance of the Mortgage Loans
as of the Relevant Anniversary) of the Net Mortgage Rates of all
Mortgage Loans as of the Relevant Anniversary less 1.25% per annum, (y)
a number equal to the weighted average remaining term to maturity, in
months, of all Mortgage Loans with a Loan-to-Value Ratio of greater
than 80% remaining in the Mortgage Pool as of the Relevant Anniversary,
and (z) one plus the quotient of the number of all Non-Primary
Residence Loans with a Loan-to-Value Ratio of greater than 80%
remaining in the Mortgage Pool divided by the total number of
outstanding Mortgage Loans in the Mortgage Pool as of the Relevant
Anniversary, and (ii) $50,000,
over (2) the aggregate amount of Bankruptcy Losses allocated solely to one or
more specific Classes of Certificates in accordance with Section 4.02 since the
Relevant Anniversary.
The Bankruptcy Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Bankruptcy Losses": Losses that are incurred as a result of Debt
Service Reductions and Deficient Valuations.
"▇▇▇▇▇▇'▇ Gate": ▇▇▇▇▇▇'▇ Gate Residential Mortgage Trust, or its
successor in interest.
"▇▇▇▇▇▇'▇ Gate Mortgage Loan Purchase Agreement": The agreement among
the Originator, ▇▇▇▇▇▇'▇ Gate and the Depositor dated April 29, 1999, regarding
the transfer of certain mortgage loans.
"Book-Entry Certificates": Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a Person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.02 hereof). On the Closing
Date, the Certificates (other than the Class A-IO, Class A-PO, Class R and the
Private Certificates) shall be Book-Entry Certificates.
"Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in the State of Delaware, or the State of New York,
the State of Maryland or in the city
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in which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
"Buydown Account": The custodial account or accounts created and
maintained pursuant to Section 3.25.
"Buydown Agreement": An agreement between the Originator and a
Mortgagor, or an agreement among the Originator, a Mortgagor and an employer of
a relocated Mortgagor which, in each case, provides for the application of
Buydown Funds.
"Buydown Funds": In respect of any Buydown Mortgage Loan, any amount
contributed by the Originator or the employer of a relocated borrower in order
to enable the Mortgagor to reduce the payments required to be made from the
Mortgagor's funds during the Buydown Period.
"Buydown Mortgage Loan": Any Mortgage Loan in respect of which,
pursuant to a Buydown Agreement, (i) the Mortgagor pays less than the full
monthly payment specified in the Mortgage Note during the Buydown Period and
(ii) the difference between the payments required under such Buydown Agreement
and the Mortgage Note is paid from the related Buydown Funds.
"Buydown Period": The period during which Buydown Funds are required to
be applied to the related Buydown Mortgage Loans as provided in Section 3.25.
"Cash-Out Refinancing": A Refinanced Mortgage Loan the proceeds of
which were more than $1,000 in excess of the principal balance of any existing
first mortgage or subordinate mortgage on the related Mortgaged Property and
related closing costs.
"Cash Liquidation": As to any defaulted Mortgage Loan other than REO
Property which has been acquired by the Master Servicer on behalf of the Trustee
for the benefit of the Certificateholders, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Master Servicer reasonably or in
good faith expects to be finally recoverable with respect to such Mortgage Loan.
"Cendant Mortgage Loan Purchase Agreement": The agreement between the
Originator and the Depositor, dated April 29, 1999, regarding the transfer of
certain Mortgage Loans.
"Certificate": Any Regular Certificate or Class R Certificate.
"Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that a Disqualified
Organization or non-U.S. Person shall not be a Holder of a Class R Certificate
for any purpose hereof.
"Certificate Owner": With respect to each Book-Entry Certificate, any
beneficial owner thereof.
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"Certificate Principal Balance": With respect to any Certificate (other
than a Class A-IO Certificate) as of any date of determination, the Certificate
Principal Balance of such Certificate on the Distribution Date immediately prior
to such date of determination, reduced by the aggregate of (a) all distributions
of principal made thereon on such immediately prior Distribution Date and (b)
without duplication of amounts described in clause (a) above, reductions in the
Certificate Principal Balance thereof in connection with allocations thereto of
Realized Losses on the Mortgage Loans and Extraordinary Trust Fund Expenses on
such immediately prior Distribution Date (or, in the case of any date of
determination up to and including the initial Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof); provided, however, that the Certificate Principal Balance of each
Subordinated Certificate of the Class of Subordinate Certificates outstanding
with the highest numerical designation at any given time shall be calculated to
equal the Percentage Interest evidenced by such Certificate multiplied by the
excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans over (B) the then aggregate Certificate Principal Balances of all
other Classes of Certificates then outstanding. The Class A-IO Certificates
shall not have Certificate Principal Balances and shall not be entitled to any
distributions of principal.
"Certificate Register" and "Certificate Registrar": The register
maintained and registrar appointed pursuant to Section 5.02 hereof.
"Class": Collectively, Certificates which have the same priority of
payment and bear the same class designation and the form of which is identical
except for variation in the Percentage Interest evidenced thereby.
"Class A Certificate": Any one of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3,
Class A-4, Class A-5, Class A-IO and Class A-PO Certificates as designated on
the face thereof substantially in the form annexed hereto as Exhibit A, executed
by the Trustee and authenticated and delivered by the Trustee, representing the
right to distributions as set forth herein and therein.
"Class A Certificateholder": Any Holder of a Class A Certificate.
"Class A-PO Deferred Amount": The applicable PO Percentage of any
Realized Loss, including any Excess Loss and Extraordinary Losses, on a Discount
Mortgage Loan allocated on or prior to the Senior Credit Support Depletion Date
to the Class A-PO Certificates.
"Class A-PO Principal Distribution Amount": For any Distribution Date,
the sum of the applicable PO Percentage of (a) all monthly payments of principal
due on each Mortgage Loan on the related Due Date, (b) the principal portion of
the Purchase Price of each Mortgage Loan that was repurchased by the Originator,
the Master Servicer or ▇▇▇▇▇▇'▇ Gate, as the case may be, as of such
Distribution Date, (c) the Substitution Adjustment Amount in connection with any
deleted Mortgage Loan received with respect to such Distribution Date, (d) any
Insurance Proceeds allocable to recoveries of principal of Mortgage Loans that
are not yet Liquidated Mortgage Loans received during the calendar month
preceding the month of such Distribution Date, (e) with respect to each
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Mortgage Loan that became a Liquidated Mortgage Loan during the calendar month
preceding the month of such Distribution Date, the amount of Liquidation
Proceeds allocable to principal received with respect to such Mortgage Loan and
(f) all partial and full Principal Prepayments by Mortgagors received during the
related Prepayment Period; provided, however, that if a Bankruptcy Loss that is
an Excess Loss is sustained with respect to a Discount Mortgage Loan that is not
a Liquidated Mortgage Loan, the PO Formula Principal Amount will be reduced on
the related Distribution Date by the applicable PO Percentage of the principal
portion of such Bankruptcy Loss.
"Class B Certificate": Any one of the Class B Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and
therein.
"Class B Certificateholder": Any Holder of a Class B Certificate.
"Class M Certificate": Any one of the Class M Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and
therein.
"Class M Certificateholder": Any Holder of a Class M Certificate.
"Class R Certificate": The Class R Certificate executed by the Trustee,
and authenticated and delivered by the Certificate Registrar, substantially in
the form annexed hereto as Exhibit C-1 and evidencing the ownership of an
interest designated as the Residual Interest.
"Class Subordination Percentage": With respect to any Distribution Date
and each Class of Subordinated Certificates, the fraction (expressed as a
percentage) the numerator of which is the Certificate Principal Balance of such
Class of Subordinated Certificates immediately prior to such Distribution Date
and the denominator of which is the aggregate of the Certificate Principal
Balances of all Classes of Certificates immediately prior to such Distribution
Date.
"Closing Date": April 29, 1999.
"Code": The Internal Revenue Code of 1986.
"Collection Account": The account or accounts created and maintained by
the Master Servicer pursuant to Section 3.10, which shall be entitled "Cendant
Mortgage Corporation, as Master Servicer for Norwest Bank Minnesota National
Association, as Trustee, in trust for registered Holders of Cendant Trust
1999-2, Cendant Mortgage Pass-Through Certificates, Series 1999-2", and which
must be an Eligible Account.
"Collection Period": With respect to any Distribution Date, the period
from the second day of the calendar month preceding the month in which such
Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.
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"Compensating Interest": As defined in Section 3.24 hereof.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Conventional Mortgage Loan": Any Mortgage Loan that is neither an FHA
Loan nor a VA Loan.
"Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Service -
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., Series 1999-2, or at such other address
as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor and the Master Servicer.
"Cut-off Date": April 1, 1999.
"Cut-off Date Aggregate Principal Balance": The aggregate of the
Cut-off Date Principal Balances of the Mortgage Loans. With respect to all
Eligible Substitute Mortgage Loans, their respective dates of substitution.
"Cut-off Date Principal Balance": With respect to any Mortgage Loan,
the unpaid principal balance thereof as of the Cut-off Date (or as of the
applicable date of substitution with respect to a Eligible Substitute Mortgage
Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be replaced
by one or more Eligible Substitute Mortgage Loans.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
"Definitive Certificates": As defined in Section 5.02(c) hereof.
"Depositor": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware
corporation, or any successor in interest.
9
"Depository": The initial Depository shall be The Depository Trust
Company, whose nominee is Cede & Co., or any other organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
"Depository Agreement": With respect to any Book-Entry Certificates,
the agreement among the Depositor, the Trustee and the initial Depository, to be
dated on or about the Closing Date.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date": With respect to any Distribution Date, the 15th
day of the calendar month in which such Distribution Date occurs or, if such
15th day is not a Business Day, the Business Day immediately preceding such 15th
day.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Trust Fund other than
through an Independent Contractor; PROVIDED, HOWEVER, that the Trustee (or the
Master Servicer on behalf of the Trustee) shall not be considered to Directly
Operate an REO Property solely because the Trustee (or the Master Servicer on
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs
or capital expenditures with respect to such REO Property.
"Discount Mortgage Loan": Any Mortgage Loan with a Net Mortgage Rate
less than 6.50%.
"Disqualified Organization": A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
unless such organization is subject to the tax imposed by Section 511 of the
Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code as
an "electing large partnership" within the meaning of Section 775 of the Code,
or (v) any other Person so designated by the Trustee based upon an Opinion of
Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Class R Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in the Class R Certificate to such Person. A
corporation will not be treated as an
10
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and a majority of its board
of directors is not selected by a governmental unit. The term "United States",
"state" and "international organizations" shall have the meanings set forth in
Section 7701 of the Code.
"Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled
"Distribution Account, Norwest Bank Minnesota National Association, as Trustee,
in trust for the registered Holders of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc. Mortgage Pass-Through Certificates, Series 1999-2" and which must be an
Eligible Account.
"Distribution Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in May 1999.
"Due Date": With respect to each Mortgage Loan and any Distribution
Date, the first day of the calendar month in which such Distribution Date occurs
on which the Monthly Payment for such Mortgage Loan was due, exclusive of any
days of grace.
"Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which such
Distribution Date occurs.
"Eligible Account": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the short-term unsecured debt obligations of such holding company) are
rated F-1 by Fitch and A-1 by S&P (or comparable ratings if Fitch and S&P are
not the Rating Agencies) at the time any amounts are held on deposit therein,
(ii) an account or accounts the deposits in which are fully insured by the FDIC
(to the limits established by such corporation), the uninsured deposits in which
account are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Certificateholders will
have a claim with respect to the funds in such account or a perfected first
priority security interest against such collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (iii) a trust account or accounts maintained with the
trust department of a federal or state chartered depository institution,
national banking association or trust company acting in its fiduciary capacity
or (iv) an account otherwise acceptable to each Rating Agency without reduction
or withdrawal of their then current ratings of the Certificates as evidenced by
a letter from each Rating Agency to the Trustee. Eligible Accounts may bear
interest.
"Eligible Substitute Mortgage Loan": A mortgage loan substituted for a
Defective Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest
11
due during or prior to the month of substitution, not in excess of, and not more
than 5% less than, the outstanding principal balance of the Defective Mortgage
Loan as of the Due Date in the calendar month during which the substitution
occurs, (ii) have a Loan Rate, not less than the Loan Rate of the Defective
Mortgage Loan and not more than 1% in excess of the Loan Rate of such Defective
Mortgage Loan, (iii) have a remaining term to maturity not greater than (and not
more than one year less than) that of the Defective Mortgage Loan, (iv) be
current as of the date of substitution, (v) have a Loan-to-Value Ratio as of the
date of substitution equal to or lower than the Loan-to-Value Ratio of the
Defective Mortgage Loan as of such date, (vi) have a risk grading determined by
the Originator at least equal to the risk grading assigned on the Defective
Mortgage Loan, (vii) have been reunderwritten by the Originator in accordance
with the same underwriting criteria and guidelines as the Defective Mortgage
Loan and (viii) conform to each representation and warranty set forth in Section
2.04 hereof applicable to the Defective Mortgage Loan. In the event that one or
more mortgage loans are substituted for one or more Defective Mortgage Loans,
the amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Loan Rates described in clause (ii) hereof
shall be determined on the basis of weighted average Loan Rates, the risk
gradings described in clause (vi) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (iii) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Loan-to-Value
Ratios described in clause (v) hereof shall be satisfied as to each such
mortgage loan and, except to the extent otherwise provided in this sentence, the
representations and warranties described in clause (viii) hereof must be
satisfied as to each Eligible Substitute Mortgage Loan or in the aggregate, as
the case may be. For purposes of calculating the applicable PO Percentage and
Non-PO Percentage, each Eligible Substitute Mortgage Loan shall be deemed to
have a Loan Rate equal to the Loan Rate for the Mortgage Loan for which it is
substituted. Any Mortgage Loan substituted for a Mortgage Loan which has an
arrearage due to the application of any related forbearance plan with respect to
such Mortgage Loan, will be treated as having such an arrearage due to the
application of any related forbearance plan with respect to such Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA-Restricted Certificates": Any of the Class M, Class B-1, Class
B-2, Class B-3, Class B-4, Class B-5 and Class R Certificates.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard insurance
premiums and other payments required to be escrowed by the Mortgagor with the
mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of real
property.
"Excess Losses": (i) Special Hazard Losses in excess of the Special
Hazard Loss Coverage Amount, (ii) Bankruptcy Losses in excess of the Bankruptcy
Loss Coverage Amount and (iii) Fraud Losses in excess of the Fraud Loss Coverage
Amount.
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"Extended Period": As defined in Section 9.04(b).
"Extraordinary Loss": Any Realized Loss or portion thereof caused by or
resulting from:
(i) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(ii) hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against an
actual, impending or expected attack by any government or sovereign
power, DE JURE or DE FACTO, or by any authority maintaining or using
military, naval or air forces, or by military, naval or air forces, or
by an agent of any such government, power, authority or forces;
(iii) any weapon of war employing atomic fission or
radioactive forces whether in time of peace or war, and
(iv) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority, or risks of contraband or illegal
transactions or trade.
"Extraordinary Trust Fund Expenses": Any amounts reimbursable to the
Master Servicer or the Depositor pursuant to Section 6.03, any amounts
reimbursable to the Trustee from the Trust Fund pursuant to Section 8.05, any
interest on any amounts advanced pursuant to Section 7.02(b) payable when such
advances are recovered pursuant to Section 7.02(b) and any other costs,
expenses, liabilities and losses borne by the Trust Fund (exclusive of any cost,
expense, liability or loss that is specific to a particular Mortgage Loan or REO
Property and is taken into account in calculating a Realized Loss in respect
thereof) for which the Trust Fund has not and, in the reasonable good faith
judgment of the Trustee, shall not, obtain reimbursement or indemnification from
any other Person. Notwithstanding the foregoing, any interest on any amounts
advanced pursuant to Section 7.02(b) will only be deemed Extraordinary Trust
Fund Expenses until the Certificate Principal Balances of the Class B-5, the
Class B-4 and the Class B-3 Certificates have been reduced to zero. After such
time, such amounts will no longer be Extraordinary Trust Fund Expenses and will
not be recoverable by the Trustee.
"FDIC": Federal Deposit Insurance Corporation or any successor thereto.
"FHLMC": Federal Home Loan Mortgage Corporation or any successor
thereto.
"Fidelity Bond": Shall have the meaning assigned thereto in Section
3.14.
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"Final Recovery Determination": With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by ▇▇▇▇▇▇'▇ Gate, the Originator or the Master Servicer pursuant to or as
contemplated by Section 2.03 or 10.01), a determination made by the Master
Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Master Servicer, in its reasonable good faith judgment,
expects to be finally recoverable in respect thereof have been so recovered. The
Master Servicer shall maintain records, prepared by a Servicing Officer, of each
Final Recovery Determination made thereby.
"Fitch": Fitch IBCA, Inc. or its successor in interest.
"FNMA": ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
"Foreclosure Price": The amount reasonably expected to be received from
the sale of the related Mortgaged Property net of any expenses associated with
foreclosure proceedings.
"Fraud Loss Coverage Amount": As of any date of determination after the
Cut-off Date, an amount equal to: (Y) prior to the first anniversary of the
Cut-off Date, an amount equal to 2.00% of the aggregate outstanding principal
balance of all of the Mortgage Loans as of the Cut-off Date minus the aggregate
amount of Fraud Losses allocated solely to one or more specific Classes of
Certificates in accordance with Section 4.02 since the Cut-off Date up to such
date of determination and (Z) from the first to the fifth anniversary of the
Cut-off Date, an amount equal to 1.00% of the aggregate outstanding principal
balance of all of the Mortgage Loans as of the most recent anniversary of the
Cut-off Date minus the Fraud Losses allocated solely to one or more specific
Classes of Certificates in accordance with Section 4.02 since the most recent
anniversary of the Cutoff Date up to such date of determination. On and after
the fifth anniversary of the Cut-off Date, the Fraud Loss Amount shall be zero.
The Fraud Loss Amount may be further reduced by the Master Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Fraud Losses": Losses sustained on a Liquidated Mortgage Loan by
reason of a default arising from fraud, dishonesty or misrepresentation.
"HUD": The United States Department of Housing and Urban Development,
or any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
14
"Independent": When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor, the Master Servicer and
their respective Affiliates, (b) does not have any direct financial interest in
or any material indirect financial interest in the Depositor or the Master
Servicer or any Affiliate thereof, and (c) is not connected with the Depositor
or the Master Servicer or any Affiliate thereof as an officer, employee,
promoter, underwriter, trustee, partner, director or Person performing similar
functions; PROVIDED, HOWEVER, that a Person shall not fail to be Independent of
the Depositor or the Master Servicer or any Affiliate thereof merely because
such Person is the beneficial owner of 1% or less of any class of securities
issued by the Depositor or the Master Servicer or any Affiliate thereof, as the
case may be.
"Independent Contractor": Either (i) any Person (other than the Master
Servicer) that would be an "independent contractor" with respect to the Trust
Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were
a real estate investment trust (except that the ownership tests set forth in
that section shall be considered to be met by any Person that owns, directly or
indirectly, 35 percent or more of any Class of Certificates), so long as the
Trust Fund does not receive or derive any income from such Person and provided
that the relationship between such Person and the Trust Fund is at arm's length,
all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any
other Person (including the Master Servicer) if the Trustee has received an
Opinion of Counsel, which Opinion of Counsel shall be an expense of the Trust
Fund, to the effect that the taking of any action in respect of any REO Property
by such Person, subject to any conditions therein specified, that is otherwise
herein contemplated to be taken by an Independent Contractor will not cause such
REO Property to cease to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code (determined without regard to the exception
applicable for purposes of Section 860D(a) of the Code), or cause any income
realized in respect of such REO Property to fail to qualify as rents from real
property.
"Initial Certificate Principal Balance": With respect to any Regular
Certificate other than the Class A-IO Certificates, the amount designated
"Initial Certificate Principal Balance" on the face thereof.
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Distribution Date and
all Certificates, the calendar month immediately preceding the month in which
such Distribution Date occurs.
"Interest Remittance Amount": As of any Determination Date, the sum,
without duplication, of (i) all interest due and collected or advanced during
the related Collection Period on the Mortgage Loans (less the Master Servicing
Fee, and mortgage insurance premiums, amounts available for reimbursement of
Monthly Advances and Servicing Advances pursuant to Section 3.10 and expenses
15
reimbursable pursuant to Section 6.03), (ii) all Compensating Interest paid by
the Master Servicer on such Determination Date with respect to the Mortgage
Loans and (iii) the portion of any payment in connection with any substitution,
Purchase Price or Net Liquidation Proceeds relating to interest with respect to
the Mortgage Loans.
"Late Collections": With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent on a
contractual basis for such Due Period and not previously recovered.
"Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related Due
Period, that all Liquidation Proceeds and Insurance Proceeds which it expects to
recover with respect to the liquidation of the Mortgage Loan or disposition of
the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from the Trust Fund by reason of its being purchased, sold or replaced
pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Fund by reason of its being sold or purchased pursuant to
Section 3.23 or Section 10.01.
"Liquidation Proceeds": The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Master Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain or condemnation,
(ii) the liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise, or (iii) the repurchase, substitution or sale of
a Mortgage Loan or an REO Property pursuant to or as contemplated by Section
2.03, Section 3.16 or Section 10.01.
"Loan Balance": As of any date, the aggregate of the Principal Balances
of all Mortgage Loans as of such date.
"Loan-to-Value Ratio": As of any date and Mortgage Loan, the fraction,
expressed as a percentage, the numerator of which is the Principal Balance of
the Mortgage Loan, and the denominator of which is the Value of the related
Mortgaged Property.
"Loan Rate": With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note, which rate shall remain
constant at the rate set forth in the Mortgage Loan Schedule as the
16
Loan Rate in effect immediately following the Cut-off Date. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Lockout Prepayment Percentage": For any Distribution Date occurring
prior to the Distribution Date in May 2004, 0%. The Lockout Prepayment
Percentage for any Distribution Date occurring after the first five years
following the Closing Date will be as follows: for any Distribution Date during
the sixth year after the Closing Date, 30%; for any Distribution Date during the
seventh year after the Closing Date, 40%; for any Distribution Date during the
eighth year after the Closing Date; 60% for any Distribution Date during the
ninth year after the Closing Date, 80%, and for any Distribution Date
thereafter, 100%.
"Losses": As defined in Section 9.03.
"Lost Note Affidavit": With respect to any Mortgage Loan as to which
the original Mortgage Note has been permanently lost or destroyed and has not
been replaced, an affidavit from the Originator or ▇▇▇▇▇▇'▇ Gate as applicable
certifying that the original Mortgage Note has been lost, misplaced or destroyed
(together with a copy of the related Mortgage Note and indemnifying the Trust
against any loss, cost or liability resulting from the failure to deliver the
original Mortgage Note) in the form of Exhibit H hereto.
"Majority Certificateholders": The Holders of Certificates evidencing
at least 51% of the Voting Rights.
"Majority Class R Certificateholders": The Holders of Class R
Certificates evidencing at least a 51% Percentage Interest in the Class R
Certificates.
"Master Servicer Affiliate": A Person (i) controlling, controlled by or
under common control with the Master Servicer or which is 50% or more owned by
the Master Servicer and (ii) which is qualified to service residential mortgage
loans.
"Master Servicer Event of Termination": One or more of the events
described in Section 7.01.
"Master Servicer Remittance Date": With respect to any Distribution
Date, the 18th day of the calendar month in which such Distribution Date occurs
or, if such 18th day is not a Business Day, the Business Day immediately
preceding such 18th Day.
"Master Servicing Fee": With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the applicable Master
17
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month. A portion of such Master
Servicing Fee which accrued at the portion of any Master Servicing Fee Rate in
excess of 0.200% per annum will be set aside by the Master Servicer to pay for
lender funded mortgage insurance and will not be treated as servicing
compensation until such lender funded mortgage insurance is paid in full and
will in no case be available to make payments of Compensating Interest.
"Master Servicing Fee Rate": A rate between 0.200% and 1.075% per annum
as described on the Mortgage Loan Schedule.
"Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by the related Mortgagor from time to time under the related Mortgage Note,
determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt
Service Reduction with respect to such Mortgage Loan and (ii) any reduction in
the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Master Servicer pursuant to Section 3.01; and (c) on the assumption that all
other amounts, if any, due under such Mortgage Loan are paid when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors, and if
such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on, or first priority security interest in, a Mortgaged Property
securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
"Mortgage Loan": Each mortgage loan transferred and assigned to the
Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as
a part of the Trust Fund, the Mortgage Loans so held being identified in the
Mortgage Loan Schedule.
"Mortgage Loan Purchase Agreements": The ▇▇▇▇▇▇'▇ Gate Mortgage Loan
Purchase Agreement, together with Cendant Mortgage Loan Purchase Agreement.
"Mortgage Loan Schedule": As of any date, the list of Mortgage Loans
separately identifying the Mortgage Loans separately identifying the Mortgage
Loans transferred from ▇▇▇▇▇▇'▇ Gate and the Originator, and attached hereto as
Exhibit D. The Mortgage Loan Schedule shall set forth the following information
with respect to each Mortgage Loan:
18
(i) the Originator's Mortgage Loan identifying number;
(ii) the Mortgagor's first and last name;
(iii) the street address of the Mortgaged Property including
the state and zip code;
(iv) a code indicating whether the Mortgaged Property is
owner-occupied;
(v) the type of Residential Dwelling constituting the
Mortgaged Property;
(vi) the original months to maturity;
(vii) the original date of the mortgage;
(viii) the Loan-to-Value Ratio at origination;
(ix) the Loan Rate;
(x) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(xi) the stated maturity date;
(xii) the amount of the Monthly Payment at origination;
(xiii) the amount of the Monthly Payment as of the Cut-off
Date;
(xiv) the last Due Date on which a Monthly Payment was
actually applied to the unpaid Stated Principal Balance;
(xv) the original principal amount of the Mortgage Loan;
(xvi) the Stated Principal Balance of the Mortgage Loan as of
the close of business on the Cut-off Date;
(xvii) a code indicating the purpose of the Mortgage Loan
(I.E., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(xviii) a code indicating the documentation style (i.e., full,
alternative or reduced);
(xix) a code indicating if the Mortgage Loan is subject to a
Primary Insurance Policy;
(xx) the Value of the Mortgaged Property;
19
(xxi) the sale price of the Mortgaged Property, if applicable;
(xxii) the actual unpaid principal balance of the Mortgage
Loan as of the Cut-off Date;
(xxiii) the Master Servicing Fee;
(xxiv) whether the Mortgage Loan is a Buydown Mortgage Loan;
and
(xxv) the PO Percentage.
The Mortgage Loan Schedule shall set forth the following information
with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1)
the number of Mortgage Loans; (2) the current principal balance of the Mortgage
Loans; (3) the weighted average Loan Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule
shall be amended from time to time by the Master Servicer in accordance with the
provisions of this Agreement. With respect to any Eligible Substitute Mortgage
Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage
Loan, determined in accordance with the definition of Cut-off Date herein.
"Mortgage Note": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool": The pool of Mortgage Loans, identified on Exhibit D
from time to time, and any REO Properties acquired in respect thereof.
"Mortgaged Property": The underlying property securing a Mortgage Loan,
including any REO Property, consisting of an Estate in Real Property improved by
a Residential Dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Servicing Fees and any other accrued and unpaid Master Servicing Fees received
and retained in connection with the liquidation of such Mortgage Loan or
Mortgaged Property.
"Net Mortgage Rate": For any Mortgage Loan is the mortgage interest
rate borne by such Mortgage Loan minus the Master Servicing Fee Rate.
"Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.
20
"New Lease": Any lease of REO Property entered into on behalf of the
Trust, including any lease renewed or extended on behalf of the Trust if the
Trust has the right to renegotiate the terms of such lease.
"Non-Discount Mortgage Loan": Any Mortgage Loan with a Net Mortgage
Rate equal to or greater than 6.50%.
"Non-PO Percentage": With respect to each Discount Mortgage Loan, a
rate equal to the Net Mortgage Rate divided by 6.50%; with respect to each
Non-Discount Mortgage Loan, 100%.
"Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property that,
in the good faith business judgment of the Master Servicer, will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan or REO Property as
provided herein.
"Notional Amount": As of any Distribution Date, with respect to the
Class A-IO Certificates, the aggregate Stated Principal Balance of the Mortgage
Loans with Net Mortgage Rates in excess of 6.50%, immediately prior to such
date.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Master Servicer or the
Depositor, as applicable.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be a salaried counsel for the Depositor or the Master Servicer,
acceptable to the Trustee, except that any opinion of counsel relating to (a)
the qualification of any REMIC as a REMIC or (b) compliance with the REMIC
Provisions must be an opinion of Independent counsel.
"Optional Termination Date": The first Distribution Date on which the
Master Servicer may opt to terminate the Trust Fund pursuant to Section 10.01.
"Original Applicable Credit Support Percentage": With respect to (i)
the Class M Certificates, 2.15%, (ii) the Class B-1 Certificates, 1.25%, (iii)
the Class B-2 Certificates, 0.85%, (iv) the Class B-3 Certificates, 0.50%, (v)
the Class B-4 Certificates, 0.30% and (vi) the Class B-5 Certificates, 0.00%.
"Original Notional Amount": With respect to the Class A-IO
Certificates, $181,024,414.
"Original Class Certificate Principal Balance": With respect to each
Class of the Certificates (other than the Class A-IO Certificates), the
Certificate Principal Balance thereof on the Closing Date, as set forth opposite
such Class above in the Preliminary Statement.
21
"Original Subordinated Principal Balance": The aggregate of the
Certificate Principal Balances of the Subordinated Certificates as of the
Cut-off Date.
"Originator": Cendant Mortgage Corporation, or its successor in
interest, in its capacity as originator under the Mortgage Loan Purchase
Agreements.
"Other Insurance Proceeds": Proceeds of any title policy, hazard policy
or other insurance policy covering a Mortgage Loan, other than the Primary
Insurance Policy, if any, to the extent such proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the Mortgagor
in accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account.
"Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"Pass-Through Rate": As to any Distribution Date (i) the Certificates
(other than the Class A-PO Certificates and A-IO Certificates), 6.50% per annum
and (ii) with respect to the Class A-IO Certificates, the weighted average of
the (a) Net Mortgage Rates of each Mortgage Loan with a Net Mortgage Rate
greater than 6.50% over (b) 6.50%. The Class A-PO Certificates will not have a
Pass-Through Rate.
"Paying Agent": Any paying agent appointed pursuant to Section 5.05.
"Percentage Interest": With respect to any Certificate (other than a
Class R Certificate), a fraction, expressed as a percentage, the numerator of
which is the Initial Certificate Principal Balance or Initial Notional Amount,
as the case may be, represented by such Certificate and the denominator of which
is the Original Class Certificate Principal Balance or Original Class
Certificate Notional Amount, as the case may be, of the related Class. With
respect to a Class R Certificate, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate; PROVIDED,
HOWEVER, that the sum of all such percentages for each such Class totals 100%.
"Permitted Investments": Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued or managed by the Depositor, the Master Servicer, the Trustee
or any of their respective Affiliates or for which an Affiliate of the Trustee
serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company
22
(including the Trustee or its agent acting in their respective
commercial capacities) incorporated under the laws of the United States
of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the
time of such investment or contractual commitment providing for such
investment, such depository institution or trust company or its
ultimate parent has a short-term uninsured debt rating in one of the
two highest available rating categories of S&P and the highest
available rating category of Fitch and provided that each such
investment has an original maturity of no more than 365 days and (B)
any other demand or time deposit or deposit which is fully insured by
the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated A or higher by S&P and rated A2 or higher by Fitch,
provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market prices plus accrued
interest or (B) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Trustee in exchange for such
collateral and (C), be delivered to the Trustee or, if the Trustee is
supplying the collateral, an agent for the Trustee, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by each
Rating Agency in its highest long-term unsecured rating categories at
the time of such investment or contractual commitment providing for
such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency in its highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by
the Trustee or an affiliate thereof having a rating by S&P of AAA-G,
AAA-m, or AA-m, and if rated by Moody's, rated Aaa, Aa1 or Aa2; and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other obligation,
security or investment, as may be acceptable to the Rating Agencies in
writing as a permitted investment of funds backing securities having
ratings equivalent to its highest initial rating of the Class A
Certificates;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest
23
payments derived from obligations underlying such instrument and the interest
and principal payments with respect to such instrument provide a yield to
maturity at par greater than 120% of the yield to maturity at par of the
underlying obligations.
"Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization, any "electing large partnership" as defined in
Section 775(a) of the Code or a non-U.S.
Person.
"Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"PO Percentage": With respect to any Discount Mortgage Loan will be
equal to (i) 6.50% minus the Net Mortgage Rate divided by (ii) 6.50%; with
respect to any Non-Discount Mortgage Loan, 0%.
"Prepayment Interest Shortfall": With respect to any Distribution Date,
for each Mortgage Loan that was during the related Prepayment Period the subject
of a Principal Prepayment in full that was applied by the Master Servicer to
reduce the outstanding principal balance of such loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Net Mortgage
Rate on the amount of such Principal Prepayment for the number of days
commencing on the date on which the prepayment is applied and ending on the last
day of the related Due Period. The obligations of the Master Servicer in respect
of any Prepayment Interest Shortfall are set forth in Section 3.24.
"Prepayment Period": With respect to any Distribution Date, the
calendar month preceding the month in which such Distribution Date occurs.
"Primary Insurance Policy": Each policy of primary guaranty mortgage
insurance issued by a Qualified Insurer in effect with respect to any Mortgage
Loan, or any replacement policy therefor obtained by the Master Servicer
pursuant to Section 3.13.
"Principal Balance": As to any Mortgage Loan and any day, other than a
Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, MINUS all
collections credited against the Principal Balance of any such Mortgage Loan.
For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to
have a Principal Balance equal to the Principal Balance of the related Mortgage
Loan as of the final recovery of related Liquidation Proceeds and a Principal
Balance of zero thereafter. As to any REO Property and any day, the Principal
Balance of the related Mortgage Loan immediately prior to such Mortgage Loan
becoming REO Property minus any REO Principal Amortization received with respect
thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an
24
amount of interest representing the full amount of scheduled interest due on any
Due Date in any month or months subsequent to the month of prepayment.
"Private Certificates": Any of the Class B-3, Class B-4 and Class B-5
Certificates.
"Property Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are received by the Master Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the Master Servicer's servicing procedures, subject to the terms
and conditions of the related Mortgage Note and Mortgage.
"Purchase Price": With respect to any Mortgage Loan or REO Property to
be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as
confirmed by an Officers' Certificate from the Master Servicer to the Trustee,
an amount equal to the sum of (i) 100% of the Principal Balance thereof as of
the date of purchase (or such other price as provided in Section 10.01), (ii) in
the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at
the applicable Loan Rate in effect from time to time from the Due Date as to
which interest was last covered by a payment by the Mortgagor or an advance by
the Master Servicer, which payment or advance had as of the date of purchase
been distributed pursuant to Section 4.01, through the end of the calendar month
in which the purchase is to be effected, and (y) an REO Property, the sum of (1)
accrued interest on such Principal Balance at the applicable Loan Rate in effect
from time to time from the Due Date as to which interest was last covered by a
payment by the Mortgagor or an advance by the Master Servicer through the end of
the calendar month immediately preceding the calendar month in which such REO
Property was acquired, plus (2) REO Imputed Interest for such REO Property for
each calendar month commencing with the calendar month in which such REO
Property was acquired and ending with the calendar month in which such purchase
is to be effected, net of the total of all net rental income, Insurance
Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had
been distributed as or to cover REO Imputed Interest pursuant to Section 4.07,
(iii) any unreimbursed Servicing Advances and Advances and any unpaid Master
Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts
previously withdrawn from the Collection Account in respect of such Mortgage
Loan or REO Property pursuant to Section 3.23, and (v) in the case of a Mortgage
Loan required to be purchased pursuant to Section 2.03, expenses reasonably
incurred or to be incurred by the Master Servicer or the Trustee in respect of
the breach or defect giving rise to the purchase obligation.
"Qualified Insurer": Any insurance company acceptable to FNMA or FHLMC.
"Rate/Term Refinancing": A Refinanced Mortgage Loan, the proceeds of
which are not more than $1000 in excess of the existing first mortgage loan and
any subordinate mortgage loan on the related Mortgaged Property and related
closing costs, and were used exclusively (except for up to $1000) to satisfy the
then existing first mortgage loan and any subordinate mortgage loan of the
Mortgagor on the related Mortgaged Property and to pay related closing costs.
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"Rating Agency or Rating Agencies": S&P, Fitch or their successors. If
such agencies or their successors are no longer in existence, "Rating Agencies"
shall be such nationally recognized statistical rating agencies, or other
comparable Persons, designated by the Depositor, notice of which designation
shall be given to the Trustee and Master Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan, the amount
by which the remaining unpaid principal balance of the Mortgage Loan exceeds the
amount of Liquidation Proceeds applied to the principal balance of the related
Mortgage Loan.
"Record Date": With respect to all of the Certificates, the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of which were
used to satisfy an existing mortgage loan on the Mortgaged Property.
"Regular Certificate": Any of the Class A, Class B and Class M
Certificates.
"Related Documents": With respect to any Mortgage Loan, the related
Mortgage Notes, Mortgages and other related documents.
"Relief Act": The Soldiers' and Sailors Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended Due Period as a result
of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Principal Balance of such Mortgage Loan at the Loan Rate
for such Mortgage Loan before giving effect to the application of the Relief
Act.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations and rulings promulgated thereunder, as the foregoing may be in
effect from time to time.
"Remittance Report": A report prepared by the Master Servicer and
delivered to the Trustee pursuant to Section 4.06.
"Rents from Real Property": With respect to any REO Property, gross
income of the character described in Section 856(d) of the Code.
26
"REO Account": The account or accounts maintained by the Master
Servicer in respect of an REO Property pursuant to Section 3.23.
"REO Disposition": The sale or other disposition of an REO Property on
behalf of the Trust Fund.
"REO Imputed Interest": As to any REO Property, for any calendar month
during which such REO Property was at any time part of the Trust Fund, one
month's interest at the applicable Net Mortgage Rate on the Principal Balance of
such REO Property (or, in the case of the first such calendar month, of the
related Mortgage Loan if appropriate) as of the close of business on the
Distribution Date in such calendar month.
"REO Principal Amortization": With respect to any REO Property, for any
calendar month, the excess, if any, of (a) the aggregate of all amounts received
in respect of such REO Property during such calendar month, whether in the form
of rental income, sale proceeds (including, without limitation, that portion of
the Termination Price paid in connection with a purchase of all of the Mortgage
Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO
Property) or otherwise, net of any portion of such amounts (i) payable pursuant
to Section 3.23 in respect of the proper operation, management and maintenance
of such REO Property or (ii) payable or reimbursable to the Master Servicer
pursuant to Section 3.23 for unpaid Master Servicing Fees in respect of the
related Mortgage Loan and unreimbursed Servicing Advances and Advances in
respect of such REO Property or the related Mortgage Loan, over (b) the REO
Imputed Interest in respect of such REO Property for such calendar month.
"REO Property": A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.23.
"Request for Release": A release signed by a Servicing Officer, in the
form of Exhibit E attached hereto.
"Residential Dwelling": Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a FNMA eligible condominium project, or (iv) a
detached one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or manufactured home (as defined in ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
Section 5402(6)).
"Residual Certificate": The Class R Certificates.
"Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Trustee, any
officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Assistant Vice
27
President, Trust Officer, any Assistant Secretary, any trust officer or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and in each case having direct
responsibility for the administration of this Agreement.
"Restricted Classes": With respect to any Class of Certificates, any
Classes of Certificates with a lower priority of payment relative to such Class.
"S&P": Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors, and, if such division shall for
any reason no longer perform the functions of a securities rating agency, "S&P"
shall be deemed to refer to any other "nationally recognized statistical rating
organization," as set forth on the most current list of such organizations
released by the Securities and Exchange Commission.
"Scheduled Principal Distribution Amount": For any Distribution Date,
will equal the sum of all amounts of all amounts described in clauses (a)
through (d) of the definition of "Class A-PO Principal Distribution Amounts" for
such Distribution Date; provided, however, that if a Bankruptcy Loss that is an
Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Mortgage Loan, the Scheduled Principal Distribution Amounts will be
reduced on the related Distribution Date by the applicable Non-PO Percentage of
the principal portion of such Bankruptcy Loss.
"Senior Certificates": The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A- IO, Class A-PO and Class R Certificates.
"Senior Credit Support Depletion Date": The date on which the
Certificate Principal Balance of each Class of Subordinated Certificates has
been reduced to zero.
"Senior Percentage": For any Distribution Date, the percentage
equivalent of a fraction the numerator of which is the aggregate of the
Certificate Principal Balances of each Class of Senior Certificates (other than
the Class A-PO Certificates) immediately prior to such date and the denominator
of which is the aggregate of the Certificate Principal Balances of all Classes
of Certificates (other than the Class A-PO Certificates) immediately prior to
such date.
"Senior Prepayment Percentage": For any Distribution Date (i) occurring
during the five years beginning on the first Distribution Date, 100%, and (ii)
for any Distribution Date occurring on or after the fifth anniversary of the
first Distribution Date, (a) for any Distribution Date in the first year
thereafter, the Senior Percentage plus 70% of the Subordinated Percentage for
such Distribution Date; (b) for any Distribution Date in the second year
thereafter, the Senior Percentage plus 60% of the Subordinated Percentage for
such Distribution Date; (c) for any Distribution Date in the third year
thereafter, the Senior Percentage plus 40% of the Subordinated Percentage for
such Distribution Date; and (d) for any Distribution Date in the fourth year
thereafter, the Senior Percentage plus 20% of the Subordinated Percentage for
such Distribution Date; and (iii) for any Distribution Date thereafter, the
Senior Percentage for such Distribution Date (unless on any Distribution Date
the
28
Senior Percentage exceeds the initial Senior Percentage, in which case the
Senior Prepayment Percentage for such Distribution Date shall be 100%).
Notwithstanding the foregoing, no decrease in the Senior Prepayment Percentage
will occur unless (i) the outstanding principal balance of all Mortgage Loans
delinquent 60 days or more (averaged over the preceding six month period), as a
percentage of the aggregate principal balance of the Subordinated Certificates
on such Distribution Date, does not equal or exceed 50%, and (ii) cumulative
Realized Losses with respect to the Mortgage Loans do not exceed (a) with
respect to the Distribution Date on the fifth anniversary of the first
Distribution Date, 30% of the aggregate of the principal balances of the
Subordinated Certificates as of the Cut-off Date (the "Original Subordinated
Principal Balance"), (b) with respect to the Distribution Date on the sixth
anniversary of the first Distribution Date, 35% of the Original Subordinated
Principal Balance, (c) with respect to the Distribution Date on the seventh
anniversary of the first Distribution Date, 40% of the Original Subordinated
Principal Balance, (d) with respect to the Distribution Date on the eighth
anniversary of the first Distribution Date, 45% of the Original Subordinated
Principal Balance, and (e) with respect to the Distribution Date on the ninth
anniversary of the first Distribution Date, 50% of the Original Subordinated
Principal Balance.
"Senior Principal Distribution Amount": For any Distribution Date, the
sum of (i) the Senior Percentage of the applicable Non-PO Percentage of the
Scheduled Principal Distribution Amount for such Distribution Date, (ii) with
respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the
calendar month preceding the month of such Distribution Date, the lesser of (x)
the Senior Percentage of the applicable Non-PO Percentage of the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month
preceding the month in which a Monthly Payment was last made by the related
borrower or advanced by the Master Servicer and (y) either (A) the Senior
Prepayment Percentage or (B) if an Excess Loss was sustained with respect to
such Liquidated Mortgage Loan during such preceding calendar month, the Senior
Percentage of the applicable Non-PO Percentage of the amount of the Liquidation
Proceeds allocable to principal received with respect to such Mortgage Loan, and
(iii) the Senior Prepayment Percentage of the applicable Non-PO Percentage of
all partial and full Principal Prepayments by Mortgagors received during the
related Collection Period; provided, however, that if a Bankruptcy Loss that is
an Excess Loss is sustained with respect to a Mortgage Loan that is not a
Liquidated Mortgage Loan, the Senior Principal Distribution Amount will be
reduced on the related Distribution Date by the Senior Percentage of the
applicable Non-PO Percentage of the principal portion of such Bankruptcy Loss.
"Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.
"Servicer Event of Termination": One or more of the events described in
Section 7.01.
"Servicer Remittance Date": With respect to any Distribution Date, one
Business Days prior to such Distribution Date.
"Servicing Advances": The reasonable "out-of-pocket" costs and expenses
incurred by the Master Servicer in connection with a default, delinquency or
other unanticipated event by the Master
29
Servicer in the performance of its servicing obligations, including, but not
limited to, the cost of (i) the preservation, restoration and protection of a
Mortgaged Property, (ii) any enforcement or judicial proceedings, including
foreclosures, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property, and (iv) the performance of its obligations under Section 3.01,
Section 3.09, Section 3.13, Section 3.14, Section 3.16 and Section 3.23. The
Master Servicer shall not be required to make any Servicing Advance in respect
of a Mortgage Loan or REO Property that, in the good faith business judgment of
the Master Servicer, would not be ultimately recoverable from related Insurance
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
"Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of Mortgage Loans, whose name
and specimen signature appear on a list of servicing officers furnished by the
Master Servicer to the Trustee and the Depositor on the
Closing Date, as such list may from time to time be amended.
"Servicing Standard": Shall mean the standards set forth in Section
3.01.
"Special Hazard Loss Coverage Amount": As of any Distribution Date, an
amount equal to $2,478,897 minus the sum of (i) the aggregate amount of Special
Hazard Losses allocated solely to one or more specific Classes of Certificates
in accordance with Section 4.02 and (ii) the Adjustment Amount (as defined
below) as most recently calculated. For each anniversary of the Cut-off Date,
the Adjustment Amount shall be equal to the amount, if any, by which the amount
calculated in accordance with the preceding sentence (without giving effect to
the deduction of the Adjustment Amount for such anniversary) exceeds the greater
of (A) the greatest of (i) twice the outstanding principal balance of the
Mortgage Loan in the Trust Fund which has the largest outstanding principal
balance on the Distribution Date immediately preceding such anniversary, (ii)
the product of 1.00% multiplied by the outstanding principal balance of all
Mortgage Loans on the Distribution Date immediately preceding such anniversary
and (iii) the aggregate outstanding principal balance (as of the immediately
preceding Distribution Date) of the Mortgage Loans in any single five-digit
California zip code area with the largest amount of Mortgage Loans by aggregate
principal balance as of such anniversary and (B) the greater of (i) the product
of 0.50% multiplied by the outstanding principal balance of all Mortgage Loans
on the Distribution Date immediately preceding such anniversary multiplied by a
fraction, the numerator of which is equal to the aggregate outstanding principal
balance (as of the immediately preceding Distribution Date) of all of the
Mortgage Loans secured by Mortgaged Properties located in the State of
California divided by the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans, expressed
as a percentage, and the denominator of which is equal to 39.00% (which
percentage is equal to the percentage of Mortgage Loans initially secured by
Mortgaged Properties located in the State of California) and (ii) the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of the largest Mortgage Loan secured by a Mortgaged Property located in
the State of California.
30
The Special Hazard Amount may be further reduced by the Master Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Master Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
"Special Hazard Losses": Realized Losses in respect of Special Hazard
Mortgage Loans.
"Special Hazard Mortgage Loan": A Liquidated Mortgage Loan as to which
the ability to recover the full amount due thereunder was substantially impaired
by a hazard not insured against under a standard hazard insurance policy.
"Startup Day": As defined in Section 9.01(b) hereof.
"Stated Principal Balance": With respect to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such Due Date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial prepayments
and Liquidation Proceeds received and to the payment of principal due on such
Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
"Stayed Funds": If the Master Servicer is the subject of a proceeding
under the federal Bankruptcy Code and the making of a Remittance (as defined in
Section 7.02) is prohibited by Section 362 of the federal Bankruptcy Code, funds
which are in the custody of the Master Servicer, a trustee in bankruptcy or a
federal bankruptcy court and should have been the subject of such remittance
absent such prohibition.
"Subordinated Certificates": The Class M, Class B-1, Class B-2, Class
B-3, Class B-4 and Class B-5 Certificates.
"Subordinated Percentage": For any Distribution Date, the difference
between 100% and the Senior Percentage for such date.
"Subordinated Prepayment Percentage": As of any Distribution Date, the
difference between 100% and the Senior Prepayment Percentage.
"Subordinated Principal Distribution Amount": For any Distribution
Date, (A) the sum of (i) the Subordinated Percentage of the applicable Non-PO
Percentage of the Scheduled Principal Distribution Amount for such Distribution
Date, (ii) with respect to each Mortgage Loan that became a Liquidated Mortgage
Loan during the calendar month preceding the month of such Distribution Date,
the applicable Non-PO Percentage of the Liquidation Proceeds allocable to
principal received with respect to such Mortgage Loan, after application of such
amounts pursuant to clause (ii) of the
31
definition of "Senior Principal Distribution Amount" up to the Subordinated
Percentage of the applicable Non-PO Percentage of the Stated Principal Balance
of such Mortgage Loan and (iii) the Subordinated Prepayment Percentage of the
applicable Non-PO Percentage of all partial and full Principal Prepayments by
Mortgagors received during the related Collection Period reduced by (B) the
amount of any payments in respect of Class A-PO Deferred Amounts on the related
Distribution Date.
"Sub-Servicer": Any Person with which the Master Servicer has entered
into a Sub-Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
"Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.
"Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub- Servicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02.
"Substitution Adjustment Amount": As defined in Section 2.03(d) hereof.
"Tax Matters Person": The tax matters person appointed pursuant to
Section 9.01(e) hereof.
"Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the Trust in its capacity as a REMIC under the
REMIC Provisions, together with any and all other information reports or returns
that may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
"Telerate Page 3750": The display page currently so designated on the
Dow ▇▇▇▇▇ Telerate Service (or such other page as may replace the Telerate Page
3750 page on that service for the purpose of displaying London interbank offered
rates of major banks).
"Termination Price": As defined in Section 10.01(a) hereof.
"Transition Cost": Any documented fees, expenses and allocated costs
reasonably incurred by a successor master servicer or the Trustee in connection
with a transfer of servicing from the Master Servicer to a successor master
servicer, including without limitation, any costs or expenses associated with
the complete transfer of all master servicing data and the completion,
correction or manipulation of such master servicing data as may be required by
the Trustee to correct any errors or insufficiencies in the master servicing
data or otherwise to enable the Trustee to master service the Mortgage Loans
properly and effectively.
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"Trust Fund": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which REMIC election is to be made, such entire
Trust Fund consisting of: (i) such Mortgage Loans as from time to time are
subject to this Agreement, together with the Mortgage Files relating thereto,
and together with all collections thereon and proceeds thereof, (ii) any REO
Property, together with all collections thereon and proceeds thereof, (iii) the
Trustee's rights with respect to the Mortgage Loans under all insurance policies
required to be maintained pursuant to this Agreement and any proceeds thereof,
(iv) the Depositor's rights under the Mortgage Loan Purchase Agreements
(including any security interest created thereby), and (v) the Collection
Account, the Distribution Account and any REO Account and such assets that are
deposited therein from time to time and any investments thereof, together with
any and all income, proceeds and payments with respect thereto. Notwithstanding
the foregoing, however, the Trust Fund specifically excludes all payments and
other collections of principal and interest due on the Mortgage Loans before the
Cut-off Date.
"Trustee Fee": With respect to any Distribution Date, amounts paid to
the Trustee pursuant to Section 3.11(b)(iii).
"Underwriter": ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as
underwriter with respect to the Certificates.
"Uninsured Cause" Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
"United States Person" or "U.S. Person": A citizen or resident of the
United States, a corporation, partnership or other entity treated as a
corporation or partnership for federal income tax purposes (other than a
partnership that is not treated as a U.S. Person pursuant to any applicable
Treasury regulations) created or organized in, or under the laws of, the United
States, any state thereof or the District of Columbia, or an estate the income
of which from sources without the United States is includible in gross income
for United States federal income tax purposes regardless of its connection with
the conduct of a trade or business within the United States, or a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust. The term "United States"
shall have the meaning set forth in Section 7701 of the Code or successor
provisions.
"Value": With respect to any Mortgaged Property, the value thereof as
determined by an independent appraisal made at the time of the origination of
the related Mortgage Loan; except that, with respect to any Mortgage Loan that
is a purchase money mortgage loan, the lesser of (i) the value thereof as
determined by an independent appraisal made at the time of the origination of
such Mortgage Loan, if any, and (ii) the sales price of the related Mortgaged
Property.
"Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Rights allocated
among Holders of such Certificates outstanding shall
33
be the fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of all the Certificates of such Class
then outstanding and the denominator of which is the aggregate Certificate
Principal Balance of all the Certificates then outstanding (except with respect
to the Class A-IO Certificates and Residual Certificates). 98% of all Voting
Rights will be allocated among all holders of the Certificates (other than the
Class A-IO Certificates and Residual Certificates) in proportion to their then
outstanding Certificate Principal Balances, 1.00% of all Voting Rights will be
allocated among the holders of the Class A-IO Certificates, and 1.00% of all
Voting Rights will be allocated among the holders of the Class R Certificates,
in proportion to the Percentage Interests evidenced by their respective
Certificates; PROVIDED, HOWEVER, that any Certificate registered in the name of
the Master Servicer, the Depositor or the Trustee or any of their respective
affiliates shall not be included in the calculation of Voting Rights. When none
of the Regular Certificates are outstanding, 100% of the Voting Rights shall be
allocated among Holders of the Class R Certificates in accordance with such
Holders' respective Percentage Interests in the Certificates of such Class.
"Written Order to Authenticate": A written order by which the Depositor
directs the Trustee to issue the Certificates.
Section 1.02 Accounting.
----------
Unless otherwise specified herein, for the purpose of any definition or
calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any
related definitions or calculations shall be determined without
duplication of such functions.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
----------------------------
The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreements (except Section 9 thereof), and all other assets included or
to be included in the Trust Fund. Such assignment includes all interest and
principal received by the Depositor or the Master Servicer on or with respect to
the Mortgage Loans (other than payments of principal and interest due on such
Mortgage Loans on or before the Cut-off Date). The Depositor herewith delivers
to the Trustee an executed copy of the Mortgage Loan Purchase Agreements.
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In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, the Trustee, the following documents or
instruments with respect to each Mortgage
Loan so transferred and assigned (a "Mortgage File"):
(i) the original Mortgage Note, endorsed in the following
form: "Pay to the order of Norwest Bank Minnesota, National
Association, as Trustee for the registered holders of the ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Investors, Inc., Mortgage Pass-Through Certificates, Series
1999-2, without recourse," with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the
Person so endorsing to the Trustee;
(ii) the original Mortgage with evidence of recording thereon.
If in connection with any Mortgage Loan, the Depositor has not caused
the original recorded Mortgage to be delivered to the Trustee because
of a delay caused by the public recording office were such Mortgage has
been delivered for recordation or because such Mortgage has been lost
or because such public recording office retains the original recorded
Mortgage, the Mortgage File shall include, in lieu of such Mortgage, a
photocopy of such Mortgage, together with (a) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
title insurer insuring the Mortgage stating that such Mortgage has been
delivered to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete
copy of the original recorded Mortgage will be promptly delivered to
the Trustee upon receipt by the Depositor; or (b) in the case where a
public recording office retains the original recorded Mortgage or in
the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage with the recording
information thereon certified by such public recording office to be a
true and complete copy of the original recorded Mortgage;
(iii) an original Assignment of the Mortgage executed in the
following form: "Norwest Bank Minnesota, National Association, as
Trustee for the registered holders of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Investors, Inc., Mortgage Pass-Through Certificates Series
1999-2.
(iv) the original recorded Assignment or Assignments of the
Mortgage showing a complete chain of assignment from the originator to
the Person assigning the Mortgage to the Trustee as contemplated by the
immediately preceding clause (iii), or if any such intervening
assignment has not been returned from the applicable public recording
office or has been lost or if such public recording office retains the
original recorded Assignments of Mortgage, the Mortgage File shall
include a photocopy of such intervening assignment, together with (a)
in the case of a delay caused by the public recording, an Officer's
Certificate of the title insurer insuring the Mortgage stating that
such intervening Assignment of Mortgage has been delivered to the
appropriate public recording office for recordation and that such
original recorded intervening Assignment of Mortgage or a copy of such
intervening Assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the original
recorded intervening Assignment of Mortgage
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will be promptly delivered to the Trustee upon receipt thereof by the
Depositor; or (b) in the case of an intervening Assignment of Mortgage
where a public recording office retains the original recorded
intervening Assignment of Mortgage or in the case where an intervening
Assignment of Mortgage is lost after recordation in a public recording
office, a copy of such intervening Assignment with recording
information thereon certified by such public recording office to be a
true and complete copy of the original recorded intervening Assignment
of Mortgage;
(v) the originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording
thereon, if any;
(vi) the original of any guarantee executed in connection with
the Mortgage Note;
(vii) [reserved];
(viii) the original mortgagee title insurance policy;
(ix) the original of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage;
(x) the original power of attorney, if applicable; and
(xi) if such Mortgage Loan is a Buydown Mortgage Loan (as
shown in the Mortgage Loan Schedule), the original Buydown Agreement.
The Master Servicer (in its capacity as Originator) shall promptly (and
in no event later than five Business Days following the later of the Closing
Date and the date of receipt by the Master Servicer of the recording information
for a Mortgage) submit or cause to be submitted for recording, at no expense to
the Trust Fund or the Trustee, in the appropriate public office for real
property records, each Assignment delivered to it pursuant to Sections 2.01(iii)
and (iv) above. In the event that any such Assignment is lost or returned
unrecorded because of a defect therein, the Master Servicer (in its capacity as
Originator) shall promptly prepare or cause to be prepared a substitute
Assignment or cure or cause to be cured such defect, as the case may be, and
thereafter cause each such Assignment to be duly recorded.
With respect to a maximum of approximately 0.5% of the Mortgage Loans,
by outstanding principal balance of the Mortgage Loans as of the Cut-off Date,
if any original Mortgage Note referred to in Section 2.01(i) above cannot be
located, the obligations of the Depositor to deliver such documents shall be
deemed to be satisfied upon delivery to the Trustee of a photocopy of such
Mortgage Note, if available, with a lost note affidavit. If any of the original
Mortgage Notes for which a lost note affidavit was delivered to the Trustee is
subsequently located, such original Mortgage Note shall be delivered to the
Trustee within three Business Days.
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The Depositor shall deliver or cause to be delivered to the Trustee
promptly upon receipt thereof any other original documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan.
All original documents relating to the Mortgage Loans that are not
delivered to the Trustee are and shall be held by or on behalf of the Depositor
or the Master Servicer, as the case may be, in trust for the benefit of the
Trustee on behalf of the Certificateholders. In the event that any such original
document is required pursuant to the terms of this Section to be a part of a
Mortgage File, such document shall be delivered promptly to the Trustee. Any
such original document delivered to or held by the Depositor that is not
required pursuant to the terms of this Section to be a part of a Mortgage File,
shall be delivered promptly to the Master Servicer.
Section 2.02 Acceptance of Trust Fund by the Trustee.
---------------------------------------
Subject to the provisions of Section 2.01 and subject to any exceptions
noted on the exception report described in the next paragraph below, the Trustee
acknowledges receipt of the documents referred to in Section 2.01 (other than
such documents described in Section 2.01(iii)) above and declares that it holds
and will hold such documents and the other documents delivered to it
constituting the Mortgage File, and that it holds or will hold all such assets
and such other assets included in the definition of the "Trust Fund" in trust
for the exclusive use and benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File on or before the Closing Date and to certify on the
Closing Date in substantially the form attached hereto as Exhibit I-1 that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in the
exception report annexed thereto as not being covered by such certification),
(i) all documents constituting part of such Mortgage File (other than such
documents described in Section 2.01(iii)) required to be delivered to it
pursuant to this Agreement are in its possession, (ii) such documents have been
reviewed by it and are not torn, mutilated, defaced or otherwise altered (except
if initialed by the obligor) and relate to such Mortgage Loan, (iii) based on
its examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (i) through (iii), (vi), (vii),
(ix), (x), (xi) and (xv) of the definition of "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Trustee is under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine whether they are genuine, enforceable,
or appropriate for the represented purpose or whether they have actually been
recorded or that they are other than what they purport to be on their face, or
to determine whether any Person executing any documents is authorized to do so
or whether any signature is genuine.
The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File within 60 days following the Closing Date and to
certify in substantially the form attached hereto
37
as Exhibit I-2 that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the exception report annexed thereto as not being
covered by such certification), (i) all documents constituting part of such
Mortgage File (other than such documents described in Section 2.01(v)) required
to be delivered to it pursuant to this Agreement are in its possession, (ii)
such documents have been reviewed by it and are not torn, mutilated, defaced or
otherwise altered (except if initialed by the obligor) and appear regular on
their face and relate to such Mortgage Loan, (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (i) through (iii), (vi), (vii), (ix), (x),
(xi) and (xv) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. It is herein acknowledged that, in
conducting such review, the Trustee is under no duty or obligation (i) to
inspect, review or examine any such documents, instruments, certificates or
other papers to determine whether they are genuine, enforceable, or appropriate
for the represented purpose or whether they have actually been recorded or that
they are other than what they purport to be on their face, or to determine
whether any Person executing any documents is authorized to do so or whether any
signature is genuine.
Prior to the first anniversary date of this Agreement the Trustee shall
deliver to the Depositor and the Master Servicer a final certification in the
form annexed hereto as Exhibit I-2 evidencing the completeness of the Mortgage
Files, with any applicable exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
finds any document or documents constituting a part of a Mortgage File to be
missing or defective in any material respect, at the conclusion of its review
the Trustee shall so notify the Depositor and the Master Servicer. In addition,
upon the discovery by the Depositor, the Master Servicer or the Trustee of a
breach of any of the representations and warranties made by any of ▇▇▇▇▇▇'▇ Gate
or the Originator in the Mortgage Loan Purchase Agreements in respect of any
Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the related Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Trustee shall, at the written request and expense of any
Certificateholder, provide a written report to such Certificateholder of all
Mortgage Files released to the Master Servicer for servicing purposes.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Originator or ▇▇▇▇▇▇'▇ Gate.
---------------------------------------------------
(a) Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of the
breach by the Originator or ▇▇▇▇▇▇'▇ Gate of any representation, warranty or
covenant under the Mortgage Loan Purchase Agreements in respect of any Mortgage
Loan which materially adversely affects the value of such Mortgage Loan or the
interest therein of the Certificateholders, by the Trustee, the Master Servicer
or the Depositor shall
38
promptly notify the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, and the
Trustee, the Master Servicer and the Depositor of such defect, missing document
or breach and request that the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be,
deliver such missing document or cure such defect or breach within 60 days from
the date the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, was notified of
such missing document, defect or breach, and if the Originator or ▇▇▇▇▇▇'▇ Gate,
as the case may be, does not deliver such missing document or cure such defect
or breach in all material respects during such period, the Master Servicer (or,
in accordance with Section 3.02(b), the Trustee) shall enforce the obligations
of the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, under the Mortgage Loan
Purchase Agreements to repurchase such Mortgage Loan from the Trust Fund at the
Purchase Price within 60 days after the date on which the Originator or ▇▇▇▇▇▇'▇
Gate, as the case may be, was notified (subject to Section 2.03(d)) of such
missing document, defect or breach, if and to the extent that the Originator or
▇▇▇▇▇▇'▇ Gate, as the case may be, is obligated to do so under the Mortgage Loan
Purchase Agreements. The Purchase Price for the repurchased Mortgage Loan shall
be deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release to the
Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be,
shall furnish to it and as shall be necessary to vest in the Originator or
▇▇▇▇▇▇'▇ Gate, as the case may be, any Mortgage Loan released pursuant hereto,
and the Trustee shall have no further responsibility with regard to such
Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided above,
if so provided in the Mortgage Loan Purchase Agreements, the Originator or
▇▇▇▇▇▇'▇ Gate, as the case may be, may cause such Mortgage Loan to be removed
from the Trust Fund (in which case it shall become a Defective Mortgage Loan)
and substitute one or more Eligible Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d). It is understood and
agreed that the obligation of the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may
be, to cure or to repurchase (or to substitute for) any Mortgage Loan as to
which a document is missing, a material defect in a constituent document exists
or as to which such a breach has occurred and is continuing shall constitute the
sole remedy respecting such omission, defect or breach available to the
Depositor, the Master Servicer or the Trustee on behalf of the
Certificateholders.
(b) Within 60 days of the earlier of discovery by the Master Servicer
or receipt of notice by the Master Servicer of the breach of any representation,
warranty or covenant of the Master Servicer set forth in Section 2.04 which
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the Master Servicer shall cure such breach in all material
respects.
(c) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a), in the case of the
Originator or ▇▇▇▇▇▇'▇ Gate, must be effected prior to the date which is two
years after the Startup Day of the REMIC.
As to any Defective Mortgage Loan for which the Originator or ▇▇▇▇▇▇'▇
Gate substitutes a Eligible Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be,
delivering to the Trustee, for such Eligible Substitute
39
Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the
Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an
Officers' Certificate providing that each such Eligible Substitute Mortgage Loan
satisfies the definition thereof and specifying the Substitution Shortfall
Amount (as described below), if any, in connection with such substitution. The
Trustee shall acknowledge receipt of the original Mortgage Note for such
Eligible Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, review such documents in the manner specified in Section 2.02 and
deliver to the Depositor and the Master Servicer, with respect to such Eligible
Substitute Mortgage Loan or Loans, a certification substantially in the form
attached hereto as Exhibit I-1, with any applicable exceptions noted thereon.
Within one year of the date of substitution, the Trustee shall deliver to the
Depositor and the Master Servicer a certification substantially in the form of
Exhibit I-2 hereto with respect to such Eligible Substitute Mortgage Loan or
Loans, with any applicable exceptions noted thereon. Monthly Payments due with
respect to Eligible Substitute Mortgage Loans in the month of substitution are
not part of the Trust Fund and will be retained by the Originator or ▇▇▇▇▇▇'▇
Gate, as the case may be. For the month of substitution, distributions to
Certificateholders will reflect the Monthly Payment due on such Defective
Mortgage Loan on or before the Due Date in the month of substitution, and the
Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, shall thereafter be entitled to
retain all amounts subsequently received in respect of such Defective Mortgage
Loan. The Depositor shall give or cause to be given written notice to the
Certificateholders that such substitution has taken place, shall amend the
Mortgage Loan Schedule to reflect the removal of such Defective Mortgage Loan
from the terms of this Agreement and the substitution of the Eligible Substitute
Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, such Eligible Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Originator or ▇▇▇▇▇▇'▇ Gate, the Mortgage Loan
Purchase Agreements, including, in the case of a substitution effected by the
Originator, all applicable representations and warranties thereof included in
the Mortgage Loan Purchase Agreements in each case as of the date of
substitution.
For any month in which the Originator or ▇▇▇▇▇▇'▇ Gate substitutes one
or more Eligible Substitute Mortgage Loans for one or more Defective Mortgage
Loans, the Master Servicer will determine the amount (the "Substitution
Adjustment Amount"), if any, by which the aggregate Purchase Price of all such
Defective Mortgage Loans exceeds the aggregate of, as to each such Eligible
Substitute Mortgage Loan, the Principal Balance thereof as of the date of
substitution, together with one month's interest on such Principal Balance at
the applicable Net Mortgage Rate. On the date of such substitution, the
Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, will deliver or cause to be
delivered to the Master Servicer for deposit in the Collection Account an amount
equal to the Substitution Adjustment Amount, if any, and the Trustee, upon
receipt of the related Eligible Substitute Mortgage Loan or Loans and
certification by the Master Servicer of such deposit, shall release to the
Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, the related Mortgage File or
Files and shall execute and deliver such instruments of transfer or assignment,
in each case without recourse, as the Originator or ▇▇▇▇▇▇'▇ Gate, as the case
may be, shall deliver to it and as shall be necessary to vest therein any
Defective Mortgage Loan released pursuant hereto.
40
In addition, the Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, shall
obtain at its own expense and deliver to the Trustee an Opinion of Counsel to
the effect that such substitution will not cause (a) any federal tax to be
imposed on the Trust Fund, including without limitation, any federal tax imposed
on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code, or
(b) the Trust Fund to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Upon discovery by the Depositor, the Originator, ▇▇▇▇▇▇'▇ Gate, the
Master Servicer or the Trustee that any Mortgage Loan does not constitute a
"qualified mortgage" within the meaning of Section 860G(a)(3) of the Code, the
party discovering such fact shall within two Business Days give written notice
thereof to the other parties. In connection therewith, the Originator or
▇▇▇▇▇▇'▇ Gate, as applicable, shall repurchase or, subject to the limitations
set forth in Section 2.03(c), substitute one or more Eligible Substitute
Mortgage Loans for the affected Mortgage Loan within 60 days of the earlier of
discovery or receipt of such notice with respect to such affected Mortgage Loan.
Such repurchase or substitution shall be made by the Originator or ▇▇▇▇▇▇'▇
Gate, as the case may be, if the affected Mortgage Loan's status as a
non-qualified mortgage is or results from a breach of any representation,
warranty or covenant made by the Originator or ▇▇▇▇▇▇'▇ Gate under the Mortgage
Loan Purchase Agreements. Any such repurchase or substitution shall be made in
the same manner as set forth in Sections 2.03(a), if made by the Originator or
▇▇▇▇▇▇'▇ Gate. The Trustee shall reconvey to the Originator or ▇▇▇▇▇▇'▇ Gate, as
the case may be, the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty.
Section 2.04 Representations, Warranties and Covenants of the
Master Servicer.
------------------------------------------------
The Master Servicer hereby represents, warrants and covenants to the
Trustee, for the benefit of each of the Trustee, the Certificateholders and to
the Depositor that as of the Closing Date or as of such date specifically
provided herein:
(i) The Master Servicer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
New Jersey and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by the Master
Servicer in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its
ability to enforce each Mortgage Loan and to service the Mortgage Loans
in accordance with the terms of this Agreement;
(ii) The Master Servicer has the full corporate power and
authority to service each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and has duly authorized by all necessary corporate
action on the part of the Master Servicer the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and
41
delivery thereof by the Depositor and the Trustee, constitutes a legal,
valid and binding obligation of the Master Servicer, enforceable
against the Master Servicer in accordance with its terms, except to the
extent that (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought;
(iii) The execution and delivery of this Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer hereunder, the consummation of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the
terms hereof are in the ordinary course of business of the Master
Servicer and will not (A) result in a breach of any term or provision
of the charter or by-laws of the Master Servicer or (B) conflict with,
result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
to which the Master Servicer is a party or by which it may be bound, or
any statute, order or regulation applicable to the Master Servicer of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Master Servicer; and the Master Servicer
is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it,
which materially and adversely affects or, to the Master Servicer's
knowledge, would in the future materially and adversely affect, (x) the
ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition,
properties or assets of the Master Servicer taken as a whole;
(iv) The Master Servicer is an approved seller/servicer for
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac in good standing and is a HUD approved
mortgagee pursuant to Section 203 of the National Housing Act;
(v) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Master Servicer
to service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof; and
(vi) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of, or compliance by the Master
Servicer with, this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the
Closing Date; and
(vii) The Master Servicer's computer and other systems used in
servicing the Mortgage Loans will be modified and maintained to operate
in a manner such that at all
42
times, including on and after January 1, 2000, (a) the Master Servicer
can service the Mortgage Loans in accordance with the terms of the
Agreement and (b) the Master Servicer can operate its business in the
same manner as it is operating on the Closing Date.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.04 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Master Servicer or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the Trustee. Subject to Section 7.01, the obligation of the Master Servicer
set forth in Section 2.03(c) to cure breaches shall constitute the sole remedies
against the Master Servicer available to the Certificateholders, the Depositor
or the Trustee on behalf of the Certificateholders respecting a breach of the
representations, warranties and covenants contained in this Section 2.04. The
preceding sentence shall not, however, limit any remedies available to the
Certificateholders, the Depositor or the Trustee on behalf of the
Certificateholders, pursuant to the Mortgage Loan Purchase Agreements signed by
the Master Servicer in its capacity as Originator, respecting a breach of the
representations, warranties and covenants of the Master Servicer in its capacity
as Originator contained in such Mortgage Loan Purchase Agreements.
Section 2.05 Representations and Warranties of the Depositor.
-----------------------------------------------
The Depositor represents and warrants to the Trust and the Trustee on
behalf of the Certificateholders as follows:
(i) This agreement constitutes a legal, valid and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity);
(ii) Immediately prior to the sale and assignment by the
Depositor to the Trustee on behalf of the Trust of each Mortgage Loan,
the Depositor had good and marketable title to each Mortgage Loan
(insofar as such title was conveyed to it by the Seller as defined in
the Mortgage Loan Purchase Agreements) subject to no prior lien, claim,
participation interest, mortgage, security interest, pledge, charge or
other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred
all right, title and interest in the Mortgage Loans to the Trustee on
behalf of the Trust;
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(iv) The Depositor has not transferred the Mortgage Loans to
the Trustee on behalf of the Trust with any intent to hinder, delay or
defraud any of its creditors;
(v) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own its assets and conduct
its business as presently being conducted;
(vi) The Depositor is not in violation of its articles of
incorporation or by-laws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Depositor is a party or by which it or
its properties may be bound, which default might result in any material
adverse changes in the financial condition, earnings, affairs or
business of the Depositor or which might materially and adversely
affect the properties or assets, taken as a whole, of the Depositor;
(vii) The execution, delivery and performance of this
Agreement by the Depositor, and the consummation of the transactions
contemplated thereby, do not and will not result in a material breach
or violation of any of the terms or provisions of, or, to the knowledge
of the Depositor, constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Depositor is a party or by which the Depositor is bound or to which
any of the property or assets of the Depositor is subject, nor will
such actions result in any violation of the provisions of the articles
of incorporation or by-laws of the Depositor or, to the best of the
Depositor's knowledge without independent investigation, any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Depositor or any of its properties or
assets (except for such conflicts, breaches, violations and defaults as
would not have a material adverse effect on the ability of the
Depositor to perform its obligations under this Agreement);
(viii) To the best of the Depositor's knowledge without any
independent investigation, no consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States or any other jurisdiction is
required for the issuance of the Certificates, or the consummation by
the Depositor of the other transactions contemplated by this Agreement,
except such consents, approvals, authorizations, registrations or
qualifications as (a) may be required under State securities or Blue
Sky laws, (b) have been previously obtained or (c) the failure of which
to obtain would not have a material adverse effect on the performance
by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement; and
(ix) There are no actions, proceedings or investigations
pending before or, to the Depositor's knowledge, threatened by any
court, administrative agency or other tribunal to which the Depositor
is a party or of which any of its properties is the subject: (a) which
if determined adversely to the Depositor would have a material adverse
effect on the business,
44
results of operations or financial condition of the Depositor; (b)
asserting the invalidity of this Agreement or the Certificates; (c)
seeking to prevent the issuance of the Certificates or the consummation
by the Depositor of any of the transactions contemplated by this
Agreement, as the case may be; (d) which might materially and adversely
affect the performance by the Depositor of its obligations under, or
the validity or enforceability of, this Agreement.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trustee and in the best interests of and for the benefit of the
Certificateholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of prudent mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any
Sub-Servicer or any Affiliate of the Master Servicer or any
Sub-Servicer may have with the related Mortgagor;
(ii) the ownership of any Certificate by the Master
Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make Advances
or Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right
to receive compensation for its services hereunder or with
respect to any particular transaction.
To the extent consistent with the foregoing, the Master Servicer shall also seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through Sub-
Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Trustee when the Master Servicer believes it
appropriate
45
in its best judgment in accordance with the servicing standards set forth above,
to execute and deliver, on behalf of the Certificateholders and the Trustee, and
upon notice to the Trustee, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of
foreclosure so as to convert the ownership of such properties, and to hold or
cause to be held title to such properties, on behalf of the Trustee and
Certificateholders. The Master Servicer shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Master Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under each Primary
Insurance Policy and any standard hazard insurance policy. Subject to Section
3.17, the Trustee shall execute, at the written request of the Master Servicer,
and furnish to the Master Servicer and any Sub-Servicer such documents as are
necessary or appropriate to enable the Master Servicer or any Sub-Servicer to
carry out their servicing and administrative duties hereunder, and the Trustee
hereby grants to the Master Servicer a power of attorney to carry out such
duties. The Trustee shall not be liable for the actions of the Master Servicer
or any Sub-Servicers under such powers of attorney.
In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the timely payment of taxes and assessments on the
Mortgaged Properties, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub- Servicers in effecting the timely payment of taxes
and assessments on a Mortgaged Property shall not, for the purpose of
calculating distributions to Certificateholders, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
Notwithstanding anything in this Agreement to the contrary,
the Master Servicer may not make any future advances with respect to a Mortgage
Loan (except as provided in Section 4.06) and the Master Servicer shall not (i)
permit any modification with respect to any Mortgage Loan that would change the
Loan Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable) or (ii) permit any modification,
waiver or amendment of any term of any Mortgage Loan that would both (A) effect
an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code
(or final, temporary or proposed Treasury regulations promulgated thereunder)
and (B) cause either the Trust Fund 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.
46
The Master Servicer may delegate its responsibilities under
this Agreement; provided, however, that no such delegation shall release the
Master Servicer from the responsibilities or liabilities arising under this
Agreement.
Section 3.02 Sub-Servicing Agreements Between the Master Servicer
and Sub-Servicers.
----------------------------------------------------
(a) The Master Servicer may enter into Sub-Servicing
Agreements (provided that such agreements would not result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Certificates)
with Sub-Servicers, for the servicing and administration of the Mortgage Loans.
Each Sub-Servicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Sub-Servicer to perform its obligations hereunder and under the
Sub-
Servicing Agreement, (ii) an institution approved as a mortgage loan originator
by the Federal Housing Administration or an institution the deposit accounts of
which are insured by the FDIC and (iii) a ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae approved
mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer
requirements conforming to the provisions set forth in Section
3.08
and provide for servicing of the Mortgage Loans consistent with the terms of
this Agreement. The Master Servicer will examine each Sub-Servicing Agreement
and will be familiar with the terms thereof. The terms of any Sub-Servicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
The Master Servicer and the Sub-Servicers may enter into and make amendments to
the Sub-Servicing Agreements or enter into different forms of Sub-Servicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the
Certificateholders, without the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any variation without the consent of the
Holders of Certificates entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-
Servicing Accounts or the timing and amount of remittances by the Sub-Servicers
to the Master Servicer, are conclusively deemed to be inconsistent with this
Agreement and therefore prohibited. The Master Servicer shall deliver to the
Trustee copies of all Sub-Servicing Agreements, and any amendments or
modifications thereof, promptly upon the Master Servicer's execution and
delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master
Servicer (except as otherwise provided in the last sentence of this paragraph),
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement and
of the Originator and the Seller (as defined in the Mortgage Loan Purchase
Agreements) under the Mortgage Loan Purchase Agreements, including, without
limitation, any obligation to make advances in respect of delinquent payments as
required by a Sub-Servicing Agreement, or to purchase a Mortgage Loan on account
of missing or defective documentation or
47
on account of a breach of a representation, warranty or covenant, as described
in Section 2.03(a). Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub- Servicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Master Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Master Servicer shall pay the costs of such enforcement at its own expense, and
shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans, or (ii) from a specific recovery
of costs, expenses or attorneys' fees against the party against whom such
enforcement is directed. Enforcement of the Mortgage Loan Purchase Agreements
against the Originator shall be effected by the Master Servicer to the extent it
is not the Originator, and otherwise by the Trustee, in accordance with the
foregoing provisions of this paragraph.
Section 3.03 Successor Sub-Servicers.
-----------------------
The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. In the event of termination of any
Sub-Servicer, all servicing obligations of such Sub-Servicer shall be assumed
simultaneously by the Master Servicer without any act or deed on the part of
such Sub-Servicer or the Master Servicer, and the Master Servicer either shall
service directly the related Mortgage Loans or shall enter into a Sub-Servicing
Agreement with a successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that
such agreement may be immediately terminated by the Trustee without fee, in
accordance with the terms of this Agreement, in the event that the Master
Servicer shall, for any reason, no longer be the Master Servicer (including
termination due to a Master Servicer Event of Termination).
Section 3.04 Liability of the Master Servicer.
--------------------------------
Notwithstanding any Sub-Servicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer and a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Master Servicer shall remain obligated and
primarily liable to the Trustee and the Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from
the Sub-Servicer and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Sub- Servicer for indemnification of the Master Servicer by such Sub-Servicer
and nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 No Contractual Relationship Between Sub-Servicers and
Trustee or Certificateholders.
-----------------------------------------------------
48
Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the Trustee and Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Sub-Servicing Agreements
by Trustee.
-----------------------------------------------------
In the event the Master Servicer shall for any reason no
longer be the master servicer (including by reason of the occurrence of a Master
Servicer Event of Termination), the Trustee or its designee or the successor
master servicer as appointed pursuant to Section 7.02 herein, shall thereupon
assume all of the rights and obligations of the Master Servicer under each
Sub-Servicing Agreement that the Master Servicer may have entered into, unless
the Trustee elects to terminate any Sub-Servicing Agreement in accordance with
its terms as provided in Section 3.03. Upon such assumption, the Trustee, its
designee or the successor servicer for the Trustee appointed pursuant to Section
7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master
Servicer's interest therein and to have replaced the Master Servicer as a party
to each Sub-Servicing Agreement to the same extent as if each Sub-Servicing
Agreement had been assigned to the assuming party, except that (i) the Master
Servicer shall not thereby be relieved of any liability or obligations under any
Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any
successor master servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the Sub-
Servicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments.
--------------------------------------------
The Master Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any related Primary Insurance Policy and any
other applicable insurance policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing, the Master Servicer may
in its discretion (i) waive any late payment charge or, if applicable, penalty
interest, only upon determining that the coverage of such Mortgage Loan by the
related Primary Insurance Policy, if any, will not be affected, or (ii) extend
the due dates for Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided that any extension pursuant to clause (ii) above
shall not affect the amortization
49
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Master Servicer shall make timely advances on such Mortgage Loan
during such extension pursuant to Section 4.06 and in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. Notwithstanding the foregoing, in the event that
any Mortgage Loan is in default or, in the judgment of the Master Servicer, such
default is reasonably foreseeable, the Master Servicer, consistent with the
standards set forth in Section 3.01, may also, waive, modify or vary any term of
such Mortgage Loan (including modifications that would change the Loan Rate,
forgive the payment of principal or interest or extend the final maturity date
of such Mortgage Loan), accept payment from the related Mortgagor of an amount
less than the Stated Principal Balance in final satisfaction of such Mortgage
Loan (such payment, a "Short Pay-off") or consent to the postponement of strict
compliance with any such term or otherwise grant indulgence to any Mortgagor.
Section 3.08 Sub-Servicing Accounts.
----------------------
In those cases where a Sub-Servicer is servicing a Mortgage
Loan pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required
to establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
comply with all requirements of this Agreement relating to the Collection
Account. The Sub-Servicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Sub-Servicer's receipt thereof, all proceeds of Mortgage Loans received by
the Sub- Servicer less its servicing compensation to the extent permitted by the
Sub-Servicing Agreement, and shall thereafter deposit such amounts in the
Sub-Servicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Sub-Servicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Master Servicer for deposit in the Collection Account not later than two
Business Days after the deposit of such amounts in the Sub-Servicing Account.
For purposes of this Agreement, the Master Servicer shall be deemed to have
received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.
---------------------------------------------------
The Master Servicer shall establish and maintain one or more
accounts (the "Servicing Accounts"), into which all collections from the
Mortgagors (or related advances from Sub-Servicers) for the payment of ground
rents, taxes, assessments, fire and hazard insurance premiums, Primary Insurance
Policy premiums, water charges, sewer rents and comparable items for the account
of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing
Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than
50
one Business Day after the Master Servicer's receipt thereof, all Escrow
Payments collected on account of the Mortgage Loans and shall thereafter deposit
such Escrow Payments in the Servicing Accounts, in no event more than two
Business Days after the deposit of such funds in the clearing account, for the
purpose of effecting the payment of any such items as required under the terms
of this Agreement. Withdrawals of amounts from a Servicing Account may be made
only to (i) effect payment of Escrow Payments; (ii) reimburse the Master
Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any advances made pursuant to Section
3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to
be overages; (iv) pay interest, if required and as described below, to
Mortgagors on balances in the Servicing Account; (v) clear and terminate the
Servicing Account at the termination of the Master Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement in
accordance with Article IX; or (vi) recover amounts deposited in error. As part
of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in Servicing Accounts, to the extent required by
law and, to the extent that interest earned on funds in the Servicing Accounts
is insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Master Servicer shall determine whether any such payments
are made by the Mortgagor in a manner and at a time that avoids the loss of the
Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The
Master Servicer assumes full responsibility for the payment of all such bills
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments.
Section 3.10 Collection Account and Distribution Account.
-------------------------------------------
(a) On behalf of the Trust Fund, the Master Servicer shall
establish and maintain one or more accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee and the
Certificateholders. On behalf of the Trust Fund, the Master Servicer shall
deposit or cause to be deposited in the clearing account (which account must be
an Eligible Account) in which it customarily deposits payments and collections
on mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
51
(ii) all payments on account of interest (net of the
related Master Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Liquidation Proceeds
(other than proceeds collected in respect of any particular
REO Property and amounts paid by the Master Servicer in
connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01);
(iv) any amounts required to be deposited pursuant to
Section 3.12 in connection with any losses realized on
Permitted Investments with respect to funds
held in the Collection Account;
(v) any amounts required to be deposited by the Master
Servicer pursuant to the second paragraph of Section 3.14(a)
in respect of any blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or
purchased in accordance with Section 2.03 or Section 9.01;
(vii) all amounts required to be deposited in connection
with shortfalls in principal amount of Eligible Substitute
Mortgage Loans pursuant to Section 2.03; and
(viii) any amounts required to be transferred from any
Buydown Account pursuant to Section 3.25.
For purposes of the immediately preceding sentence, the Cut-off Date with
respect to any Eligible Substitute Mortgage Loan shall be deemed to be the date
of substitution.
The foregoing requirements for deposit in the Collection
Accounts shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges or assumption fees need not be deposited by the Master Servicer in the
Collection Account. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.
(b) On behalf of the Trust Fund, the Trustee shall establish
and maintain one or more accounts (such account or accounts, the "Distribution
Account"), held in trust for the benefit of the Certificateholders. On behalf of
the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately
available funds for deposit in the Distribution Account on or before 3:00 p.m.
New York time (i) on the Master Servicer Remittance Date, that portion of the
Available Funds for the related Distribution Date then on deposit in the
Collection Account, and (ii) on each Business Day as of the commencement of
which the balance on deposit in the Collection Account exceeds $75,000 following
any withdrawals pursuant to the next succeeding sentence, the amount of such
52
excess, but only if the Collection Account constitutes an Eligible Account
solely pursuant to clause (ii) of the definition of "Eligible Account." If the
balance on deposit in the Collection Account exceeds $75,000 as of the
commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, on or before 3:00 p.m. New
York time on such Business Day, withdraw from the Collection Account any and all
amounts payable or reimbursable to the Depositor, the Master Servicer, the
Trustee or any Sub-Servicer pursuant to Section 3.11 and shall pay such amounts
to the Persons entitled thereto.
(c) Funds in the Collection Account and the Distribution
Account may be invested in Permitted Investments in accordance with the
provisions set forth in Section 3.12. The Master Servicer shall give notice to
the Trustee and the Depositor of the location of the Collection Account
maintained by it when established and prior to any change thereof. The Trustee
shall give notice to the Master Servicer and the Depositor of the location of
the Distribution Account when established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be
delivered by the Master Servicer to the Trustee for deposit in an account (which
may be the Distribution Account and must satisfy the standards for the
Distribution Account as set forth in the definition thereof) and for all
purposes of this Agreement shall be deemed to be a part of the Collection
Account; provided, however, that the Trustee shall have the sole authority to
withdraw any funds held pursuant to this subsection (d). In the event the Master
Servicer shall deliver to the Trustee for deposit in the Distribution Account
any amount not required to be deposited therein, it may at any time request that
the Trustee withdraw such amount from the Distribution Account and remit to it
any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver to the Trustee from time to time for
deposit, and upon written notification from the Master Servicer, the Trustee
shall so deposit, in the Distribution Account:
(i) any Advances, as required pursuant to Section 4.06;
(ii) any amounts required to be deposited pursuant to
Section 3.23(d) or (f) in connection with any REO Property;
(iii) any amounts to be paid by the Master Servicer in
connection with a purchase of Mortgage Loans and REO
Properties pursuant to Section 9.01;
(iv) any amounts required to be deposited pursuant to
Section 3.24 in connection with any Prepayment Interest
Shortfalls; and
(v) any Stayed Funds, as soon as permitted by the
federal bankruptcy court having jurisdiction in such matters.
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(e) Promptly upon receipt of any Stayed Funds, whether from
the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or
other source, the Trustee shall deposit such funds in the Distribution Account,
subject to withdrawal thereof pursuant to Section 7.02(b) or as otherwise
permitted hereunder.
(f) The Master Servicer shall deposit in the Collection
Account any amounts required to be deposited pursuant to Section 3.12(b) in
connection with losses realized on Permitted
Investments with respect to funds held in the Collection Account.
Section 3.11 Withdrawals From the Collection Account and
Distribution Account.
-------------------------------------------
(a) The Master Servicer shall, from time to time, make
withdrawals from the Collection Account for any of the following purposes or as
described in Section 4.06:
(i) to remit to the Trustee for deposit in the
Distribution Account the amounts required to be so remitted
pursuant to Section 3.10(b) or permitted to be so remitted
pursuant to the first sentence of Section 3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master
Servicer for Advances, but only to the extent of amounts
received which represent Late Collections (net of the related
Master Servicing Fees) of Monthly Payments on Mortgage Loans
with respect to which such Advances were made in accordance
with the provisions of Section 4.06;
(iii) subject to Section 3.16(d), to pay the Master
Servicer or any Sub- Servicer any unpaid Master Servicing Fees
and reimburse any unreimbursed Servicing Advances with respect
to each Mortgage Loan, but only to the extent of any
Liquidation Proceeds, Insurance Proceeds or other amounts as
may be collected by the Master Servicer with respect to such
Mortgage Loan;
(iv) to pay to the Master Servicer as servicing
compensation (in addition to the Master Servicing Fee) on the
Master Servicer Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Master Servicer, the Depositor, the
Originator or ▇▇▇▇▇▇'▇ Gate, as the case may be, with respect
to each Mortgage Loan that has previously been purchased or
replaced pursuant to Section 2.03 or Section 3.16(c) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Master Servicer for any Advance
previously made which the Master Servicer has determined to be
a Nonrecoverable Advance in accordance with the provisions of
Section 4.06;
54
(vii) to reimburse the Master Servicer or the Depositor
for expenses incurred by or reimbursable to the Master
Servicer or the Depositor, as the case may be, pursuant to
Section 6.03;
(viii) to reimburse the Master Servicer or the Trustee, as
the case may be, for expenses reasonably incurred in respect
of the breach or defect giving rise to the purchase obligation
under Section 2.03 or Section 2.04 of this Agreement that were
included in the Purchase Price of the Mortgage Loan, including
any expenses arising out of the enforcement of the purchase
obligation;
(ix) to pay, or to reimburse the Master Servicer for
advances in respect of, expenses incurred in connection with
any Mortgage Loan pursuant to Section 3.16(b);
(x) to clear and terminate the Collection Account
pursuant to Section 10.01; and
[(xi) to reimburse the Master Servicer for amounts
deposited in error].
The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account, to the extent held by or
on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and
(ix) above. The Master Servicer shall provide written notification to the
Trustee, on or prior to the next succeeding Master Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(vii) above.
(b) The Trustee shall, from time to time, make withdrawals
from the Distribution Account, for any of the following purposes, without
priority:
(i) to make distributions to Certificateholders in
accordance with Section 4.01;
(ii) to pay to itself amounts to which it is entitled
pursuant to Section 8.05;
(iii) to pay itself any interest income earned on funds
deposited in the Distribution Account pursuant to Section
3.12(c);
(iv) to reimburse itself pursuant to Section 7.02 and
7.01(b);
(v) to pay any amounts in respect of taxes pursuant to
10.01(g)(iii); and
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(vi) to clear and terminate the Distribution Account
pursuant to Section 10.01.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account.
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(a) The Master Servicer may direct any depository institution
maintaining the Collection Account (for purposes of this Section 3.12, an
"Investment Account"), and the Trustee, in its individual capacity, may direct
any depository institution maintaining the Distribution Account (for purposes of
this Section 3.12, also an "Investment Account"), to invest the funds in such
Investment Account in one or more Permitted Investments bearing interest or sold
at a discount, and maturing, unless payable on demand, (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if a Person other
than the Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee is the obligor thereon. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Trustee (in its capacity
as such) or in the name of a nominee of the Trustee. The Trustee shall be
entitled to sole possession (except with respect to investment direction of
funds held in the Collection Account and any income and gain realized thereon)
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Trustee or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Trustee shall:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly
upon determination by a Responsible Officer of the
Trustee that such Permitted Investment would not
constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Master Servicer,
shall be for the benefit of the Master Servicer and shall be subject to its
withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in
the Collection Account the amount of any loss of principal incurred in respect
of any such Permitted Investment made with funds in such accounts immediately
upon realization of such loss.
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(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by or on behalf of the Trustee, shall
be for the benefit of the Trustee and shall be subject to its withdrawal at any
time. The Trustee shall deposit in the Distribution Account, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may and, subject to Section 8.01 and Section
8.02(a)(v), upon the request of the Holders of Certificates representing more
than 50% of the Voting Rights allocated to any Class of Certificates, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
Section 3.13 Maintenance of the Primary Insurance Policies;
Collections Thereunder.
----------------------------------------------
The Master Servicer will maintain or cause the related
Sub-Servicer, if any, to maintain in full force and effect, if required under
the Mortgage Loan Purchase Agreements and to the extent available, a Primary
Insurance Policy conforming in all respects to the description set forth in
Section 2(vii) of the Mortgage Loan Purchase Agreements with respect to each
Mortgage Loan so insured as of the Closing Date (or, in the case of a Eligible
Substitute Mortgage Loan, on the date of substitution). Such coverage will be
maintained with respect to each such Mortgage Loan for so long as it is
outstanding, subject to any applicable laws or until the related Loan-to-Value
Ratio is reduced to less than or equal to 80% based on Mortgagor payments. The
Master Servicer shall cause the premium for each Primary Insurance Policy to be
paid on a timely basis and shall pay such premium out of its own funds if it is
not otherwise paid. The Master Servicer or the related Sub- Servicer, if any,
will not cancel or refuse to renew any such Primary Insurance Policy in effect
on the Closing Date (or, in the case of a Eligible Substitute Mortgage Loan, on
the date of substitution) that is required to be kept in force under this
Agreement unless a replacement Primary Insurance Policy for such canceled or
non-renewed policy is obtained from and maintained with an insurer.
The Master Servicer shall not take, or permit any Sub-Servicer
to take, any action which would result in non-coverage under any applicable
Primary Insurance Policy of any loss which, but for the actions of the Master
Servicer or Sub-Servicer, would have been covered thereunder. The Master
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under each Primary Insurance Policy. In
connection with any assumption and modification agreement or substitution of
liability agreement entered into or to be entered into pursuant to Section 3.15,
the Master Servicer shall promptly notify the insurer under the related Primary
Insurance Policy, if any, of such assumption in accordance with the terms of
such policies and shall take all actions which may be required by such insurer
as a condition to the continuation of coverage under the Primary Insurance
Policy. If any such Primary Insurance Policy is terminated as a result of such
assumption, the Master Servicer or the related Sub- Servicer shall obtain a
replacement Primary Insurance Policy as provided above.
57
In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to prepare and
present, on behalf of itself, the Trustee and the Certificateholders, claims to
the insurer under any Primary Insurance Policy in a timely fashion in accordance
with the terms of such policies and, in this regard, to take such action as
shall be necessary to permit recovery under any Primary Insurance Policy
respecting a defaulted Mortgage Loan. Any amounts collected by the Master
Servicer under any Primary Insurance Policy shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11; and any amounts
collected by the Master Servicer under any Primary Insurance Policy in respect
of any REO Property shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.23. In those cases in which a Mortgage Loan is
serviced by a Sub-Servicer, the Sub-Servicer, on behalf of itself, the Trustee,
and the Certificateholders, will present claims to the insurer under any Primary
Insurance Policy and all collections thereunder shall be deposited initially in
the Sub- Servicing Account.
Section 3.14 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage.
----------------------------------------------
(a) The Master Servicer shall cause to be maintained for each
Mortgage Loan fire insurance with extended coverage on the related Mortgaged
Property in an amount which is at least equal to the least of (i) the current
principal balance of such Mortgage Loan, (ii) the amount necessary to fully
compensate for any damage or loss to the improvements that are a part of such
property on a replacement cost basis and (iii) the maximum insurable value of
the improvements which are a part of such Mortgaged Property, in each case in an
amount not less than such amount as is necessary to avoid the application of any
coinsurance clause contained in the related hazard insurance policy. The Master
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Loan Rate
and related Servicing Advances. The Master Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Master Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing loans held for its own account,
subject to the terms and conditions of the related Mortgage and Mortgage Note)
shall be deposited in the Collection Account, subject to withdrawal pursuant to
Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account,
subject to withdrawal pursuant to Section 3.23, if received in respect of an REO
Property. Any cost incurred by the Master Servicer in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no earthquake or other additional insurance is
to be required of any Mortgagor other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property or REO Property
58
is at any time in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, the Master Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance available for the related Mortgaged Property under the national
flood insurance program (assuming that the area in which such Mortgaged Property
is located is participating in such program).
In the event that the Master Servicer shall obtain and
maintain a blanket policy with an insurer having a "General Policy Rating" of
A:X or better in Best's Key Rating Guide (or such other rating that is
comparable to such rating) insuring against hazard losses on all of the Mortgage
Loans, it shall conclusively be deemed to have satisfied its obligations as set
forth in the first two sentences of this Section 3.14, it being understood and
agreed that such policy may contain a deductible clause, in which case the
Master Servicer shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with the first
two sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Trustee and Certificateholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of
this Agreement a policy or policies of insurance covering errors and omissions
for failure in the performance of the Master Servicer's obligations under this
Agreement, which policy or policies shall be in such form and amount that would
meet the requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac if it were the purchaser of
the Mortgage Loans, unless the Master Servicer has obtained a waiver of such
requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall also
maintain a fidelity bond in the form and amount that would meet the requirements
of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, unless the Master Servicer has obtained a waiver
of such requirements from ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. The Master Servicer shall
provide the Trustee (upon the Trustee's reasonable request) with copies of any
such insurance policies and fidelity bond. The Master Servicer shall be deemed
to have complied with this provision if an Affiliate of the Master Servicer has
such errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
the Master Servicer. Any such errors and omissions policy and fidelity bond
shall by its terms not be cancelable without thirty days' prior written notice
to the Trustee. The Master Servicer shall also cause each Sub-Servicer to
maintain a policy of insurance covering errors and omissions and a fidelity bond
which would meet such requirements.
59
Section 3.15 Enforcement of Due-On-Sale Clauses; Assumption
Agreements.
----------------------------------------------
The Master Servicer will, to the extent it has knowledge of
any conveyance or prospective conveyance of any Mortgaged Property by any
Mortgagor (whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains or is to remain liable under the Mortgage Note and/or
the Mortgage), exercise its rights to accelerate the maturity of such Mortgage
Loan under the "due-on-sale" clause, if any, applicable thereto; provided,
however, that the Master Servicer shall not exercise any such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Insurance Policy,
if any. If the Master Servicer reasonably believes it is unable under applicable
law to enforce such "due-on-sale" clause, or if any of the other conditions set
forth in the proviso to the preceding sentence apply, the Master Servicer will
enter into an assumption and modification agreement from or with the person to
whom such property has been conveyed or is proposed to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. The
Master Servicer is also authorized to enter into a substitution of liability
agreement with such person, pursuant to which the original Mortgagor is released
from liability and such person is substituted as the Mortgagor and becomes
liable under the Mortgage Note, provided that no such substitution shall be
effective unless such person satisfies the underwriting criteria of the Master
Servicer and has a credit risk rating at least equal to that of the original
Mortgagor. In connection with any assumption or substitution, the Master
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. The
Master Servicer shall not take or enter into any assumption and modification
agreement, however, unless (to the extent practicable in the circumstances) it
shall have received confirmation, in writing, of the continued effectiveness of
any applicable Primary Insurance Policy or hazard insurance policy, or a new
policy meeting the requirements of this Section is obtained. Any fee collected
by the Master Servicer in respect of an assumption or substitution of liability
agreement will be retained by the Master Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Loan Rate and the amount
of the Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Master Servicer shall notify the Trustee that
any such substitution or assumption agreement has been completed by forwarding
to the Trustee the executed original of such substitution or assumption
agreement, which document shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term
60
"assumption" is deemed to also include a sale (of the Mortgaged Property)
subject to the Mortgage that is not accompanied by an assumption or substitution
of liability agreement.
Section 3.16 Realization Upon Defaulted Mortgage Loans.
-----------------------------------------
(a) The Master Servicer shall, consistent with the servicing
standard set forth in Section 3.01, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.07. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.11 and Section 3.23. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section
3.16 or any other provision of this Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee,
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Trustee, the Trust Fund or the Certificateholders would be
considered to hold title to, to be a "mortgagee-in-possession" of, or to be an
"owner" or "operator" of such Mortgaged Property within the meaning of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or any comparable law, unless the Master Servicer has
also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, that it would be in
the best economic interest of the Trust Fund to take such
actions as are necessary to bring the Mortgaged Property into
compliance therewith; and
(2) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal
of any hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials for which investigation,
testing, monitoring, containment, clean-up or remediation
could be required under any federal, state or local law or
regulation, or that if any such materials are present for
which such action could be required, that it would be in the
best economic interest
61
of the Trust Fund to take such actions with respect to the
affected Mortgaged Property.
The cost of the environmental audit report contemplated by
this Section 3.23 shall be advanced by the Master Servicer, subject to the
Master Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.11(a)(ix), such right of reimbursement being prior to the
rights of Certificateholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it
is in the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(ix), such right of
reimbursement being prior to the rights of Certificateholders to receive any
amount in the Collection Account received in respect of the affected Mortgage
Loan or other Mortgage Loans.
(c) The Master Servicer may at its option purchase from the
Trust Fund any Mortgage Loan that is 90 days or more delinquent, which the
Master Servicer determines in good faith will otherwise become subject to
foreclosure proceedings (evidence of such determination to be delivered in
writing to the Trustee prior to purchase), at a price equal to the Purchase
Price. The Purchase Price for any Mortgage Loan purchased hereunder shall be
deposited in the Collection Account, and the Trustee, upon receipt of written
certification from the Master Servicer of such deposit, shall release or cause
to be released to the Master Servicer the related Mortgage File and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Master Servicer shall furnish and as shall be necessary
to vest in the Master Servicer title to any Mortgage Loan released pursuant
hereto.
(d) Proceeds received in connection with any Final Recovery
Determination, as well as any recovery resulting from a partial collection of
Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,
will be applied in the following order of priority: FIRST, to reimburse the
Master Servicer or any Sub-Servicer for any related unreimbursed Servicing
Advances and Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); SECOND, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final
Recovery Determination, or to the Due Date prior to the Distribution Date on
which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and THIRD, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Master Servicer as follows: FIRST, to
unpaid Master Servicing Fees; and SECOND, to the balance of the interest
62
then due and owing. The portion of the recovery so allocated to unpaid Master
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(a)(iii).
Section 3.17 Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
(a) Upon the payment in full of any Mortgage Loan, or the
receipt by the Master Servicer of a notification that payment in full shall be
escrowed in a manner customary for such purposes, the Master Servicer will
immediately notify the Trustee by delivering a certification in duplicate (one
of which will be returned to the Master Servicer with the Mortgage File) in the
form of Exhibit E which shall be signed by a Servicing Officer or in a mutually
agreeable electronic format which will in lieu of a signature be deemed to
originate from a Servicing Officer (which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.10 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trustee shall promptly
release the related Mortgage File to the Master Servicer. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Collection Account or the Distribution Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Primary Insurance Policy or any other insurance policy relating to the
Mortgage Loans, the Trustee shall, upon request of the Master Servicer and
delivery to the Trustee in duplicate (one of which will be returned to the
Master Servicer with the Mortgage File) of a Request for Release in the form of
Exhibit E, which shall be signed by a Servicing Officer or in a mutually
agreeable electronic format which will in lieu of a signature be deemed to
originate from a Servicing Officer release the related Mortgage File to the
Master Servicer, and the Trustee shall, at the direction of the Master Servicer,
and in the form provided by the Master Servicer execute such documents as shall
be necessary to the prosecution of any such proceedings. Such Request for
Release shall obligate the Master Servicer to return each and every document
previously requested from the Mortgage File to the Trustee when the need
therefor by the Master Servicer no longer exists, unless the Mortgage Loan has
been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation that are
required to be deposited into the Collection Account have been so deposited, or
that such Mortgage Loan has become an REO Property, the Master Servicer shall no
longer be obligated to return the documents released by the Trustee pursuant to
the related
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Request for Release and a copy of the Request for Release shall be released by
the Trustee to the Master Servicer.
(c) Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Master Servicer any court pleadings,
requests for trustee's sale or other documents reasonably necessary to the
foreclosure or trustee's sale in respect of a Mortgaged Property or to any legal
action brought to obtain judgment against any Mortgagor on the Mortgage Note or
Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law
or in equity. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.
Section 3.18 Servicing Compensation.
----------------------
As compensation for the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to the Master Servicing Fee
with respect to each Mortgage Loan payable solely from payments of interest and
Buydown Funds in respect of such Mortgage Loan, subject to Section 3.24. In
addition, the Master Servicer shall be entitled to recover unpaid Master
Servicing Fees out of Insurance Proceeds or Liquidation Proceeds to the extent
permitted by Section 3.11(a)(iii) and out of amounts derived from the operation
and sale of an REO Property to the extent permitted by Section 3.23. The right
to receive the Master Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Master Servicer's
responsibilities and obligations under this Agreement.
Additional servicing compensation in the form of assumption
fees, late payment charges and other similar fees and charges shall be retained
by the Master Servicer (subject to Section 3.24) only to the extent such fees or
charges are received by the Master Servicer. The Master Servicer shall also be
entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection
Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as
additional servicing compensation, interest or other income earned on deposits
therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including premiums due under the Primary Insurance
Policies, if any, premiums for the insurance required by Section 3.14, to the
extent such premiums are not paid by the related Mortgagors or by a
Sub-Servicer, servicing compensation of each Sub-Servicer, and to the extent
provided herein in Section 8.05, the fees and expenses of the Trustee) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
Section 3.19 Reports To The Trustee; Collection Account
Statements.
------------------------------------------
Not later than fifteen days after each Distribution Date, the
Master Servicer shall forward to the Trustee and the Depositor a statement
prepared by the Master Servicer setting forth
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the status of the Collection Account as of the close of business on such
Distribution Date and showing, for the period covered by such statement, the
aggregate amount of deposits into and withdrawals from the Collection Account of
each category of deposit specified in Section 3.10(a) and each category of
withdrawal specified in Section 3.11. Such statement may be in the form of the
then current ▇▇▇▇▇▇ ▇▇▇ Monthly Accounting Report for its Guaranteed Mortgage
Pass-Through Program with appropriate additions and changes, and shall also
include information as to the aggregate of the outstanding principal balances of
all of the Mortgage Loans as of the last day of the calendar month immediately
preceding such Distribution Date. Copies of such statement shall be provided by
the Trustee to any Certificateholder and to any Person identified to the Trustee
as a prospective transferee of a Certificate, upon request at the expense of the
requesting party, provided such statement is delivered by the Master Servicer to
the Trustee.
Section 3.20 Statement as to Compliance.
--------------------------
The Master Servicer will deliver to the Trustee, the Depositor
and each Rating Agency on or before March 15 of each calendar year commencing in
2000, an Officers' Certificate stating, as to each signatory thereof, that (i) a
review of the activities of the Master Servicer during the preceding year and of
performance under this Agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. Copies of any such statement shall be provided by the
Trustee to any Certificateholder and to any Person identified to the Trustee as
a prospective transferee of a Certificate, upon the request and at the expense
of the requesting party, provided that such statement is delivered by the Master
Servicer to the Trustee.
Section 3.21 Independent Public Accountants' Servicing Report.
------------------------------------------------
Not later than March 15 of each calendar year commencing in
2000, the Master Servicer, at its expense, shall cause a nationally recognized
firm of independent certified public accountants to furnish to the Master
Servicer a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Master Servicer which
includes an assertion that the Master Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed fiscal year and (ii) on the basis of an
examination conducted by such firm in accordance with standards established by
the American Institute of Certified Public Accountants, such representation is
fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Sub-Servicers, upon comparable reports of firms of independent
certified public accountants rendered on the basis of examinations conducted in
accordance with the same standards (rendered within one
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year of such report) with respect to those Sub-Servicers. Immediately upon
receipt of such report, the Master Servicer shall furnish a copy of such report
to the Trustee and each Rating Agency.
Section 3.22 Access to Certain Documentation.
-------------------------------
The Master Servicer shall provide to the Office of Thrift
Supervision, the FDIC, and any other federal or state banking or insurance
regulatory authority that may exercise authority over any Certificateholder,
access to the documentation regarding the Mortgage Loans required by applicable
laws and regulations. Such access shall be afforded without charge, but only
upon reasonable request and during normal business hours at the offices of the
Master Servicer designated by it. In addition, access to the documentation
regarding the Mortgage Loans will be provided to any Certificateholder, the
Trustee and to any Person identified to the Master Servicer as a prospective
transferee of a Certificate, upon reasonable request during normal business
hours at the offices of the Master Servicer designated by it at the expense of
the Person requesting such access.
Section 3.23 Title, Management and Disposition of REO Property.
-------------------------------------------------
(a) The deed or certificate of sale of any REO Property shall
be taken in the name of the Trustee, or its nominee, in trust for the benefit of
the Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall
either sell any REO Property within three years, after the end of the calendar
year in which the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue
Service, no later than 60 days before the day on which the three-year grace
period would otherwise expire, an extension of the three-year grace period,
unless the Master Servicer shall have delivered to the Trustee and the Depositor
an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect
that the holding by the Trust Fund of such REO Property subsequent to three
years after its acquisition will not result in the imposition on the Trust Fund
of taxes on "prohibited transactions" thereof, as defined in Section 860F of the
Code, or cause the Trust Fund to fail to qualify as a REMIC under Federal law at
any time that any Certificates are outstanding. The Master Servicer shall
manage, conserve, protect and operate each REO Property for the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the Trust Fund of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.
(b) The Master Servicer shall segregate and hold all funds
collected and received in connection with the operation of any REO Property
separate and apart from its own funds and general assets and shall establish and
maintain with respect to REO Properties an account held in trust for the Trustee
for the benefit of the Certificateholders (the "REO Account"), which shall be an
Eligible Account. The Master Servicer shall be permitted to allow the Collection
Account to serve as the REO Account, subject to separate ledgers for each REO
Property. The Master Servicer
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shall be entitled to retain or withdraw any interest income paid on funds
deposited in the REO Account.
(c) The Master Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement, to
do any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Certificateholders. In connection therewith, the Master Servicer shall deposit,
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the REO Account, in
no event more than two Business Days after the deposit of such funds into the
clearing account, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect
of such REO Property;
(ii) all real estate taxes and assessments in respect of
such REO Property that may result in the imposition of a lien
thereon; and
(iii) all costs and expenses necessary to maintain such
REO Property.
To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through
(iii) above with respect to such REO Property, the Master Servicer shall advance
from its own funds such amount as is necessary for such purposes if, but only
if, the Master Servicer would make such advances if the Master Servicer owned
the REO Property and if in the Master Servicer's judgment, the payment of such
amounts will be recoverable from the rental or sale of the REO Property.
Notwithstanding the foregoing, neither the Master Servicer nor
the Trustee shall:
(i) authorize the Trust Fund to enter into, renew or
extend any New Lease with respect to any REO Property, if the
New Lease by its terms will give rise to any income that does
not constitute Rents from Real Property;
(ii) authorize any amount to be received or accrued
under any New Lease other than amounts that will constitute
Rents from Real Property;
(iii) authorize any construction on any REO Property,
other than the completion of a building or other improvement
thereon, and then only if more than
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ten percent of the construction of such building or other
improvement was completed before default on the related
Mortgage Loan became imminent, all within the meaning of
Section 856(e)(4)(B) of the Code; or
(iv) authorize any Person to Directly Operate any REO
Property on any date more than 90 days after its date of
acquisition by the Trust Fund;
unless, in any such case, the Master Servicer has obtained an Opinion of
Counsel, provided to the Trustee, to the effect that such action will not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code at any time that it is held by the
Trust Fund, in which case the Master Servicer may take such actions as are
specified in such Opinion of Counsel.
The Master Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall
not be inconsistent herewith;
(ii) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay
all costs and expenses incurred in connection with the
operation and management of such REO Property, including those
listed above and remit all related revenues (net of such costs
and expenses) to the Master Servicer as soon as practicable,
but in no event later than thirty days following the receipt
thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.23(c)
relating to any such contract or to actions taken through any
such Independent Contractor shall be deemed to relieve the
Master Servicer of any of its duties and obligations to the
Trustee on behalf of the Certificateholders with respect to
the operation and management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all
duties and obligations in connection with the
operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be solely liable for
all fees owed by it to any such Independent Contractor, irrespective of whether
the Master Servicer's compensation pursuant to Section 3.18 is sufficient to pay
such fees.
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(d) In addition to the withdrawals permitted under Section
3.23(c), the Master Servicer may from time to time make withdrawals from the REO
Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid
Master Servicing Fees in respect of the related Mortgage Loan; and (ii) to
reimburse itself or any Sub-Servicer for unreimbursed Servicing Advances and
Advances made in respect of such REO Property or the related Mortgage Loan. On
the Master Servicer Remittance Date, the Master Servicer shall withdraw from
each REO Account maintained by it and deposit into the Distribution Account in
accordance with Section 3.10(d)(ii), for distribution on the related
Distribution Date in accordance with Section 4.01, the income from the related
REO Property received during the prior calendar month, net of any withdrawals
made pursuant to Section 3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section
3.23(a), and further subject to obtaining the approval of the insurer under any
related Primary Insurance Policy (if and to the extent that such approvals are
necessary to make claims under such policies in respect of the affected REO
Property), each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms and conditions as the Master Servicer shall deem
necessary or advisable, as shall be normal and usual in its general servicing
activities for similar properties.
(f) The proceeds from the REO Disposition, net of any amount
required by law to be remitted to the Mortgagor under the related Mortgage Loan
and net of any payment or reimbursement to the Master Servicer or any
Sub-Servicer as provided above, shall be deposited in the Distribution Account
in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in
the month following the receipt thereof for distribution on the related
Distribution Date in accordance with Section 4.01. Any REO Disposition shall be
for cash only (unless changes in the REMIC Provisions made subsequent to the
Startup Day allow a sale for other consideration).
(g) The Master Servicer shall file information returns with
respect to the receipt of mortgage interest received in a trade or business,
reports of foreclosures and abandonments of any Mortgaged Property and
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Section 3.24 Obligations of the Master Servicer in Respect of
Prepayment Interest Shortfalls.
------------------------------------------------
The Master Servicer shall deliver to the Trustee for deposit
into the Distribution Account on or before 3:00 p.m. New York time on the Master
Servicer Remittance Date from its own funds an amount equal to the lesser of (i)
the aggregate of the Prepayment Interest Shortfalls for the related Distribution
Date resulting from full or partial Principal Prepayments during the related
Prepayment Period and (ii) the portion of its aggregate Master Servicing Fee
which accrued at a Master Servicing Fee Rate of 0.20% per annum for the most
recently ended calendar month ("Compensating Interest").
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Section 3.25 Administration of Buydown Funds.
-------------------------------
The Buydown Account established and maintained by the Master
Servicer with respect to each Buydown Mortgage Loan shall be a non-interest
bearing Eligible Account. Upon receipt from the Mortgagor of the amount due on a
Due Date for each Buydown Mortgage Loan, the Master Servicer will withdraw from
the related Buydown Account the predetermined amount that, when added to the
amount due on such date from the Mortgagor, equals the Monthly Payment and will
deposit that amount together with the related payment made by the Mortgagor in
the Collection Account.
If any Mortgagor on a Buydown Mortgage Loan prepays such
Mortgage Loan in its entirety during the Buydown Period, the Master Servicer
will withdraw from the related Buydown Account and remit to such Mortgagor in
accordance with the related Buydown Agreement any Buydown Funds remaining in the
Buydown Account. If a Principal Prepayment by a Mortgagor during the Buydown
Period, together with any Buydown Funds in the related Buydown Account, will
result in a Principal Prepayment in full, the Master Servicer will withdraw from
the related Buydown Account for deposit in the Collection Account the Buydown
Funds, which together with such Principal Prepayment, will result in a Principal
Prepayment in full. If a Mortgagor defaults during the Buydown Period with
respect to a Buydown Mortgage Loan and the Mortgaged Property is sold at
foreclosure or title thereto is acquired on behalf of the Certificateholders,
the Master Servicer will withdraw from the Buydown Account the Buydown Funds
(which shall thereupon constitute "Liquidation Proceeds" for purposes of this
Agreement) for deposit in the Collection Account.
Section 3.26 Obligations of the Master Servicer in Respect of Loan
Rates and Monthly Payments.
-----------------------------------------------------
In the event that a shortfall in any collection on or
liability with respect to any Mortgage Loan results from or is attributable to a
calculation of the principal balance of a Mortgage Loan that was made by the
Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt
of notice thereof, immediately shall deliver to the Trustee for deposit in the
Distribution Account from its own funds the amount of any such shortfall and
shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and
any successor master servicer in respect of any such liability. Such indemnities
shall survive the termination or discharge of this Agreement.
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ARTICLE IV
FLOW OF FUNDS
Section 4.01 Distributions.
-------------
(a) On each Distribution Date the Paying Agent, which shall be the
Trustee, shall distribute the following amounts, in the following order of
priority, in each case to the extent of the Available Funds:
(i) to the Class A Certificateholders (other than the Class
A-PO Certificateholders) and Class R Certificateholders, on a pro rata
basis based on Accrued Certificate Interest payable on such
Certificates with respect to such Distribution Date, Accrued
Certificate Interest on such Classes of Certificates, as applicable,
for such Distribution Date, plus any Accrued Certificate Interest
thereon remaining unpaid from any previous Distribution Date except as
provided in the last paragraph of this Section 4.01(a) (the "Senior
Interest Distribution Amount");
(ii) (X) to the Class A-PO Certificateholders the Class A-PO
Principal Distribution Amount until the Certificate Principal Balance
thereof is reduced to zero; and
(Y) to the Class A Certificateholders (other than
Class A-PO Certificateholders and Class A-IO Certificateholders) and
Class R Certificateholders, in the priorities and amounts set forth in
Section 4.01(b)(i) through (iii) and Section 4.01(c), the Senior
Principal Distribution Amount (applied to reduce the Certificate
Principal Balances of such Class A Certificates or Class R
Certificates, as applicable):
(iii) if the Certificate Principal Balances of the Class M
Certificates and Class B Certificates have not been reduced to zero, to
the Master Servicer or a Subservicer, by remitting for deposit to the
Distribution Account, to the extent of and in reimbursement for any
Advances or Subservicer Advances previously made with respect to any
Mortgage Loan or REO Property which remain unreimbursed in whole or in
part following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property, minus any such Advances that were made with
respect to delinquencies that ultimately constituted Excess Losses or
Extraordinary Losses;
(iv) to the Holders of the Class M Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any
Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
71
(v) to the Holders of the Class M Certificates, an amount
equal to the Subordinate Principal Distribution Amount for such Class
of Certificates for such Distribution Date, applied in reduction of the
Certificate Principal Balance of the Class M Certificates;
(vi) to the Holders of the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any
Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class B-1 Certificates, an amount
equal to the Subordinate Principal Distribution Amount for such Class
of Certificates for such Distribution Date applied in reduction of the
Certificate Principal Balance of the Class B-1 Certificates;
(viii) to the Holders of the Class B-2 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(ix) to the Holders of the Class B-2 Certificates, an amount
equal to the Subordinate Principal Distribution Amount for such Class
of Certificates for such Distribution Date applied in reduction of the
Certificate Principal Balance of the Class B-2 Certificates;
(x) to the Holders of the Class B-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any
Accrued Certificate Interest thereon remaining unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the Class B-3 Certificates, an amount
equal to the Subordinate Principal Distribution Amount for such Class
of Certificates for such Distribution Date applied in reduction of the
Certificate Principal Balance of the Class B-3 Certificates;
(xii) to the Holders of the Class B-4 Certificates, the
Accrued Certificate Interest thereon for such Distribution Date, plus
any Accrued Certificate Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-4 Certificates, an amount
equal to the Subordinate Principal Distribution Amount for such Class
of Certificates for such Distribution Date applied in reduction of the
Certificate Principal Balance of the Class B-4 Certificates;
(xiv) to the Holders of the Class B-5 Certificates, an amount
equal to the Accrued Certificate Interest thereon for such Distribution
Date, plus any Accrued Certificate Interest thereon remaining unpaid
from any previous Distribution Date are insufficient therefor;
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(xv) to the Holders of the Class B-5 Certificates, an amount
equal to the Subordinate Principal Distribution Amount for such Class
of Certificates for such Distribution Date applied in reduction of the
Certificate Principal Balance of the Class B-5 Certificates;
(xvi) to the Class A Certificateholders (other than the Class
A-IO Certificateholders) and Class R Certificateholders in the priority
set forth in Section 4.01(b), the portion, if any, of the Available
Funds remaining after the foregoing distributions, applied to reduce
the Certificate Principal Balances of such Class A and Class R
Certificates, but in no event more than the aggregate of the
outstanding Certificate Principal Balances of each such Class of Class
A and Class R Certificates, and thereafter, to the Class M, Class B-1
and Class B-2 Certificates then outstanding beginning with such Class
with the lowest numerical designation, any portion of the Available
Funds remaining after the Class A Certificates and Class R Certificates
have been retired, applied to reduce the Certificate Principal Balance
of each such Class of Class M, Class B-1 and Class B-2 Certificates,
but in no event more than the outstanding Certificate Principal Balance
of each such Class of Class M, Class B-1 and Class B-2 Certificates;
and thereafter to each other Class of Class B Certificates then
outstanding beginning with such Class with the lowest numerical
designation, any portion of the Available Funds remaining after the
Class M, Class B-1 and Class B-2 Certificates have been retired,
applied to reduce the Certificate Principal Balance of each such Class
of Class B Certificates, but in no event more than the outstanding
Certificate Principal Balance of each such Class of Class B
Certificates; and
(xvii) to the Class R Certificateholders, the balance, if any,
of the Available Funds.
Notwithstanding the foregoing, on any Distribution Date, with respect
to the Class of Class B Certificates outstanding on such Distribution Date with
the highest numerical designation, or in the event the Class B Certificates are
no longer outstanding, the Class M Certificates or in the event the Class B
Certificates and Class M Certificates are no longer outstanding, the Class A and
Class R Certificates, Accrued Certificate Interest thereon remaining unpaid from
any previous Distribution Date will be distributable only to the extent that
such unpaid Accrued Certificate Interest was attributable to interest shortfalls
relating to the failure of the Master Servicer to make any required Advance, or
the determination by the Master Servicer that any proposed Advance would be a
Nonrecoverable Advance with respect to the related Mortgage Loan where such
Mortgage Loan has not yet been the subject of a Cash Liquidation or REO
Disposition.
(b) Distributions of principal on the Class A Certificates (other than
the Class A-PO Certificates and the Class A-IO Certificates) and Class R
Certificates on each Distribution Date occurring prior to the occurrence of the
Senior Credit Support Depletion Date will be made as follows:
(i) the Senior Principal Distribution Amount to the Class R
Certificates until the Certificate Principal Balance thereof has been
reduced to zero; and
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(ii) the balance of the Senior Principal Distribution Amount
remaining after the distributions, if any, described in clause (i)
above shall be distributed to the Class A-3 Certificates in reduction
of the Certificate Principal Balance thereof, in an amount equal to
the sum of the following:
(A) the Class A-3 Certificates' pro rata share (based
on the Certificate Principal Balance thereof relative to the
aggregate Certificate Principal Balance of all classes of
Certificates (other than the Class A-PO Certificates)) of the
aggregate of amounts described in clause (i) and (ii) of the
definition "Senior Principal Distribution Amount" herein
(without application of the Senior Percentage and Senior
Prepayment Percentage); and
(B) the Lockout Prepayment Percentage of the Class
A-3 Certificates' pro rata share (based on the Certificate
Principal Balance thereof relative to the aggregate
Certificate Principal Balance of all classes of Certificates
(other than the Class A-PO Certificates)) of the aggregate of
amounts described in clause (iii) of the definition "Senior
Principal Distribution Amount" herein (without application of
the Senior Percentage);
PROVIDED that, if the aggregate of the amounts set forth in
clauses (i) through (iii) of the definition "Senior Principal
Distribution Amount" herein is more than the balance of the
Available Funds remaining after the Senior Interest
Distribution Amount and the Class A-PO Distribution Amount
have been distributed, the amount paid to the Class A-3
Certificates pursuant to this clause shall be reduced by an
amount equal to the Class A-3 Certificates' pro rata share
(based on the aggregate Certificate Principal Balance thereof
relative to the aggregate Certificate Principal Balance of the
Senior Certificates (other than the Class A-PO Certificates))
of such difference;
(iii) the balance of the Senior Principal Distribution Amount
remaining after the distribution described in clauses (i) and (ii)
above, shall be distributed in the following order:
(1) FIRST, concurrently, as follows:
(A) 60.626594% to the Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to
zero; and
(B) 39.373406%, first, to the Class A-4 Certificates
and second, to the Class A-5 Certificates, in each case, until
the Certificate Principal Balance thereof has been reduced to
zero;
(2) SECOND, to the Class A-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
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(3) THIRD, to the Class A-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero.
(c) On or after the occurrence of the Senior Credit Support Depletion
Date, all priorities relating to distributions as described above in respect of
principal among the Senior Certificates (other than the Class A-PO Certificates)
will be disregarded and an amount equal to the Senior Principal Distribution
Amount will be distributed to the Senior Certificates (other than the Class A-
PO Certificates) remaining pro rata in accordance with their respective
outstanding Certificate Principal Balances and the amount set forth in Section
4.01(a)(i) herein will be distributed as set forth therein.
(d) After reduction of the Certificate Principal Balances of the Senior
Certificates (other than the Class A-PO Certificates) to zero but prior to the
Senior Credit Support Depletion Date, the Senior Certificates (other than the
Class A-PO Certificates) will be entitled to no further distributions of
principal thereon and the Available Funds will be paid solely to the holders of
the Class A-PO Certificates, Class A-IO Certificates, Class M Certificates and
Class B Certificates in each case as described herein.
Section 4.02 Allocation of Losses.
--------------------
(i) On each Distribution Date, the applicable PO Percentage of
any Realized Loss, including any Excess Loss, on a Discount Mortgage
Loan shall be allocated to the Class A-PO Certificates until the Class
Certificate Balance thereof is reduced to zero. The amount of any such
Realized Loss, other than an Excess Loss or an Extraordinary Loss,
allocated on or prior to the Senior Credit Support Depletion Date will
be a "Class A-PO Deferred Amount."
(ii) On each Distribution Date, the applicable Non-PO
Percentage of any Realized Loss, other than any Excess Loss or any
Extraordinary Loss, shall be allocated first to the Subordinated
Certificates, in the reverse order of their relative priority of
payment beginning with the Class of Subordinated Certificates then
outstanding with the lowest relative priority of payment, in each case
until the Class Certificate Balance of the respective Class of
Certificates has been reduced to zero, and then to the Senior
Certificates (other than the Class A-PO Certificates) pro rata, based
upon their respective Class Certificate Balances. Allocations of the
interest portions of Realized Losses shall be made by operation of the
definition of "Accrued Certificate Interest" and by operation of the
provisions of Section 4.01(a).
(iii) On each Distribution Date, the applicable Non-PO
Percentage of Excess Losses and Extraordinary Losses shall be allocated
pro rata among the Classes of Senior Certificates (other than the Class
A-PO Certificates) and the Subordinated Certificates based
upon their respective Class Certificate Balances.
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(iv) Extraordinary Trust Fund Expenses shall be allocated by
the Trustee on each Distribution Date as follows: first, to the Class
B-5 Certificates; second, to the Class B-4 Certificates; third, to the
Class B-3 Certificates; fourth, to the Class B-2 Certificates; fifth,
to the Class B-1 Certificates; and sixth, to the Class M Certificates,
in each case until the Certificate Principal Balance thereof has been
reduced to zero. Thereafter, upon the reduction of the Certificate
Principal Balances of the Subordinate Certificates to zero, such
Extraordinary Trust Fund Expenses shall be allocated among the Senior
Certificates (other than the Class IO Certificates) on a pro rata
basis.
Section 4.03 Method of Distribution.
----------------------
The Trustee shall make distributions in respect of a Distribution Date
to each Certificateholder of record on the related Record Date (other than as
provided in Section 10.01 respecting the final distribution), by wire transfer
in immediately available funds to the account of the Person entitled thereto if
such Person shall have so notified the Trustee in writing at least five Business
Days prior to the Record Date immediately prior to such Distribution Date and is
the registered owner of the Certificates, the aggregate initial Certificate
Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii)
two-thirds of the aggregate initial Certificate Principal Balance of the
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on any
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon the presentation and surrender of such Certificate at
the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.
Section 4.04 Distributions on Book-Entry Certificates.
----------------------------------------
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
distribution to the Certificate Owners that it represents and to each indirect
participating brokerage firm (a "brokerage firm" or "indirect participating
firm") for which it acts as agent. Each brokerage firm shall be responsible for
disbursing funds to the Certificate Owners that it represents. All such credits
and disbursements with respect to a Book-Entry Certificate are to be made by the
Depository and the Depository Participants in accordance with the provisions of
the Certificates. None of the Trustee, the Depositor, the Master Servicer shall
have any responsibility therefor except as otherwise provided by applicable law.
Section 4.05 Statements.
----------
(a) On each Distribution Date, based, as applicable, on
information contained in the Remittance Report, the Trustee shall
prepare and forward by mail to each Holder of the
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Regular Certificates, the Master Servicer and the Rating Agencies, a
statement as to the distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates, separately
identified, allocable to principal;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to
interest, separately identified;
(iii) the aggregate amount of servicing compensation received
by the Master Servicer during the related Due Period and such other
customary information as the Trustee deems necessary or desirable, or
which a Certificateholder reasonably requests, to enable
Certificateholders to prepare their tax returns;
(iv) the aggregate amount of Advances for the related Due
Period;
(v) the Pool Principal Balance at the close of business at the
end of the related Due Period;
(vi) the number, weighted average remaining term to maturity
and weighted average Loan Rate of the Mortgage Loans as of the related
Due Date;
(vii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) one month, two months or three months delinquent on
a contractual basis, (b) as to which foreclosure proceedings have been
commenced and (c) in bankruptcy as of the close of business on the last
day of the calendar month preceding such Distribution Date;
(viii) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the unpaid principal
balance and the Principal Balance of such Mortgage Loan as of the date
it became an REO Property;
(ix) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month preceding the
Distribution Date, and, cumulatively, the total number and cumulative
principal balance of all REO Properties as of the close of
business of the last day of the preceding due period;
(x) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xi) the aggregate amount of Realized Losses incurred during
the related Due Period and the cumulative amount of Realized Losses;
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(xii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Collection Account for such Distribution
Date;
(xiii) the Class Certificate Principal Balance or Notional
Amount (with respect to the Class A-I0 Certificates), as the case may
be, of each Class of Certificates, after giving effect to the
distributions made on such Distribution Date;
(xiv) the Interest Remittance Amount in respect of each Class
of Certificates for such Distribution Date and the respective portions
thereof, if any, remaining unpaid following the distributions made in
respect of such Certificates on such Distribution Date;
(xv) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by
payments of Compensating Interest by the Master Servicer pursuant to
Section 3.24;
(xvi) the Available Funds;
(xvii) the Pass-Through Rate for each Class of Certificates
for such Distribution Date;
(xviii) the aggregate amount of Extraordinary Trust Fund
Expenses withdrawn from the Collection Account or the Distribution
Account for such Distribution Date;
(xix) the aggregate Principal Balance of Mortgage Loans
purchased by the Master Servicer during the related Due Period and
indicating the Section of this Agreement requiring or allowing the
purchase of each such Mortgage Loan.
The Trustee shall forward such report concurrently with each
distribution to the Certificateholders, the Rating Agencies, Bloomberg (at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇) and Intex
Solutions (at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) on the related Distribution Date. The Trustee may make
available each month, to any interested party, the monthly statement to
Certificateholders via the Trustee's website, electronic bulletin board and its
fax-on-demand service. The Trustee's website will be located at
"▇▇▇.▇▇▇▇▇▇▇.▇▇▇". The Trustee's electronic bulletin board may be accessed by
calling (▇▇▇) ▇▇▇-▇▇▇▇, and its fax-on-demand service may be accessed by calling
(▇▇▇) ▇▇▇-▇▇▇▇. The Trustee may fully rely upon and shall have no liability with
respect to information provided by the Master Servicer.
In the case of information furnished pursuant to subclauses (i) through
(iii) above, the amounts shall be expressed in a separate section of the report
as a dollar amount for each Class for each $1,000 original dollar amount as of
the Cut-off Date.
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(b) Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time
during the calendar year was a Certificateholder of a Regular
Certificate, if requested in writing by such Person, such information
as is reasonably necessary to provide to such Person a statement
containing the information set forth in subclauses (i) through (iii)
above, aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished by
the Trustee to Certificateholders pursuant to any requirements of the
Code as are in force from time to time.
(c) On each Distribution Date, the Trustee shall forward to
the Class R Certificateholders a copy of the reports forwarded to the
Regular Certificateholders in respect of such Distribution Date with
such other information as the Trustee deems necessary or
appropriate.
(d) Within a reasonable period of time after the end of each
calendar year, the Trustee shall deliver to each Person who at any time
during the calendar year was a Class R Certificateholder, if requested
in writing by such Person, such information as is reasonably necessary
to provide to such Person a statement containing the information
provided pursuant to the previous paragraph aggregated for such
calendar year or applicable portion thereof during which such Person
was a Class R Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially
comparable information shall be prepared and furnished to
Certificateholders by the Trustee pursuant to any requirements of the
Code as from time to time in force.
Section 4.06 Remittance Reports; Advances.
----------------------------
(a) On the second Business Day following each Determination
Date but in no event less than five Business Days prior to the related
Distribution Date, the Master Servicer shall deliver to the Trustee by
telecopy (or by such other means as the Master Servicer and the Trustee
may agree from time to time) a Remittance Report, and other data
mutually agreed upon, with respect to the related Distribution Date. On
the same date, the Master Servicer shall forward to the Trustee by
overnight mail a computer readable magnetic tape or diskette or in such
other medium as may be agreed between the Master Servicer and the
Trustee containing the information set forth in such Remittance Report
with respect to the related Distribution Date. Not later than the close
of business New York time on the Master Servicer Remittance Date, the
Master Servicer shall deliver or cause to be delivered to the Trustee
in addition to the information provided on the Remittance Report, such
other information reasonably available to it with respect to the
Mortgage Loans as the Trustee may reasonably require to perform the
calculations necessary to make the distributions contemplated by
Section 4.01, 4.02 and 4.03 and to prepare the statements to
Certificateholders contemplated by Section 4.05. The Trustee shall not
be responsible to recompute, recalculate or verify any information
provided to it by the Master Servicer.
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(b) The amount of Advances to be made by the Master Servicer
for any Distribution Date shall equal, subject to Section 4.07(d), the
sum of (i) the aggregate amount of Monthly Payments (net of the related
Master Servicing Fee), due during the related Due Period in respect of
the Mortgage Loans, which Monthly Payments were delinquent on a
contractual basis as of the close of business on the related
Determination Date and (ii) with respect to each REO Property, which
REO Property was acquired during or prior to the related Due Period and
as to which REO Property an REO Disposition did not occur during the
related Due Period, an amount equal to the excess, if any, of the REO
Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property transferred
to the Distribution Account pursuant to Section 3.13 for distribution
on such Distribution Date.
On or before the close of business New York time on the Master Servicer
Remittance Date, the Master Servicer shall remit in immediately available funds
to the Trustee for deposit in the Distribution Account an amount equal to the
aggregate amount of Advances, if any, to be made in respect of the Mortgage
Loans and REO Properties for the related Distribution Date either (i) from its
own funds or (ii) from the Collection Account, to the extent of funds held
therein for future distribution (in which case it will cause to be made an
appropriate entry in the records of Collection Account that amounts held for
future distribution have been, as permitted by this Section 4.07, used by the
Master Servicer in discharge of any such Advance) or (iii) in the form of any
combination of (i) and (ii) aggregating the total amount of Advances to be made
by the Master Servicer with respect to the Mortgage Loans and REO Properties.
Any amounts held for future distribution and so used shall be appropriately
reflected in the Master Servicer's records and replaced by the Master Servicer
by deposit in the Collection Account on or before any future Master Servicer
Remittance Date to the extent that the Available Funds for the related
Distribution Date (determined without regard to Advances to be made on the
Master Servicer Remittance Date) shall be less than the total amount that would
be distributed to the Classes of Certificateholders pursuant to Section 4.01 on
such Distribution Date if such amounts held for future distributions had not
been so used to make Advances. The Trustee will provide notice to the Master
Servicer by telecopy on any Master Servicer Remittance Date or within one
Business Day in the event that the amount remitted by the Master Servicer to the
Trustee on such date is less than the Advances required to be made by the Master
Servicer for the related Distribution Date, as set forth in the related
Remittance Report.
(c) The obligation of the Master Servicer to make such
Advances is mandatory, notwithstanding any other provision of this
Agreement but subject to (d) below, and, with respect to any Mortgage
Loan, shall continue until the Mortgage Loan is paid in full or until
the recovery of all Liquidation Proceeds thereon; provided, however,
that such obligation will cease if title to the Mortgaged Property is
acquired by the Trust Fund in foreclosure or by deed in lieu of
foreclosure.
(d) Notwithstanding anything herein to the contrary, no
Advance shall be required to be made hereunder by the Master Servicer
if such Advance would, if made,
80
constitute a Nonrecoverable Advance. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate of the Master
Servicer delivered to the Depositor and the Trustee.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
----------------
Each of the Class A, Class M, Class B and Class R Certificates shall be
substantially in the forms annexed hereto as exhibits, and shall, on original
issue, be executed, authenticated and delivered by the Trustee to or upon the
receipt of a Written Order to Authenticate from the Depositor concurrently with
the sale and assignment to the Trustee of the Trust Fund. Each Class of the
Certificates (other than the Class A-IO, Class A-PO, Class R, Class B-3, Class
B-4 and Class B-5 Certificates) shall be initially evidenced by one or more
Certificates representing a Percentage Interest with a minimum dollar
denomination of $50,000 and integral dollar multiples of $1,000 in excess
thereof. The Class A-PO Certificates will be issued in registered, certificated
form in minimum denominations of $25,000 and integral multiples of $1,000 in
excess thereof, except for one Class A-PO Certificate evidencing the sum of an
authorized denomination thereof and the remainder of the aggregate initial Class
Certificate Balance of such class of Certificates. The Class B-3, Class B-4 and
Class B-5 Certificates will be issued in registered, certificated form in
minimum denominations of $250,000 and integral multiples of $1,000 in excess
thereof, except for one Class of each of the Class B-3, Class B-4 and Class B-5
Certificates evidencing the sum of an authorized denomination thereof and the
remainder of the aggregate initial Class Certificate Balance of such class of
Certificates. The Class A-IO Certificates and Residual Certificates will be
issued in registered, certificated form in minimum denominations of a 25%
Percentage Interest. Provided however, that one Certificate of each such Class
of Certificates may be in a different denomination so that the sum of the
denominations of all outstanding Certificates of such Class shall equal the
Class Certificate Principal Balance or Class Certificate Notional Balance of
such Class on the Closing Date.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature on behalf of the Trustee by a Responsible Officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Trustee shall bind the Trust, notwithstanding that such individuals or any
of them have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless such Certificate shall have been
manually authenticated by the Trustee substantially in the form provided for
herein, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has
81
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. Subject to Section 5.02(c), the Certificates,
other then the Private Certificates, the Class A-PO, Class A-IO and Class R
Certificates shall be Book-Entry Certificates.
Section 5.02 Registration of Transfer and Exchange of
Certificates.
----------------------------------------
(a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee shall
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein
provided.
Upon surrender for registration of transfer of any Certificate at any
office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of a Class R Certificate,
upon satisfaction of the conditions set forth below, the Trustee on behalf of
the Trust shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same aggregate
Percentage Interest.
At the option of the Certificateholders, Certificates may be exchanged
for other Certificates in authorized denominations and the same aggregate
Percentage Interests, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute on behalf of the Trust and authenticate and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer satisfactory to the Trustee and the Certificate Registrar duly executed
by, the Holder thereof or his attorney duly authorized in writing.
(b) Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such
Certificates may not be transferred by the Trustee except to another
Depository; (ii) the Depository shall maintain book-entry records with
respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of
registration of such Certificates on the books of the Depository shall
be governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall for
all purposes deal with the Depository as representative of the
Certificate Owners of the Certificates for purposes of exercising the
rights of Holders under this Agreement, and requests and directions for
and votes of such representative shall not be deemed to be inconsistent
if they are made with respect to different Certificate Owners; (vi) the
Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository
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Participants with respect to indirect participating firms and Persons
shown on the books of such indirect participating firms as direct or
indirect Certificate Owners; and (vii) the direct participants of the
Depository shall have no rights under this Agreement under or with
respect to any of the Certificates held on their behalf by the
Depository, and the Depository may be treated by the Trustee and its
agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owners. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners
that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures. The parties hereto are
hereby authorized to execute a Letter of Representations with the Depository or
take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of
any such Letter of Representation and this Agreement, the terms of this
Agreement shall control.
(c) If (i)(x) the Depository or the Depositor advises the
Trustee in writing that the Depository is no longer willing or able to
discharge properly its responsibilities as Depository and (y) the
Trustee or the Depositor is unable to locate a qualified successor,
(ii) the Depositor, at its sole option, with the consent of the
Trustee, elects to terminate the book-entry system through the
Depository or (iii) after the occurrence of a Master Servicer Event of
Termination, the Certificate Owners of each Class of Book-Entry
Certificates representing Percentage Interests of such Classes
aggregating not less than 51% advises the Trustee and the Depository
Participants in writing that the continuation of a book-entry system
through the Depository to the exclusion of definitive, fully registered
certificates (the "Definitive Certificates") to Certificate Owners is
no longer in the best interests of the Certificate Owners. Upon
surrender to the Certificate Registrar of the Book-Entry Certificates
by the Depository, accompanied by registration instructions from the
Depository for registration, the Trustee shall, at the Depositor's
expense, in the case of (ii) above, or the Originator's expense, in the
case of (i) and (iii) above, execute on behalf of the Trust and
authenticate the Definitive Certificates. Neither the Depositor nor the
Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the
Trustee, the Certificate Registrar, the Master Servicer, any Paying
Agent and the Depositor shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(d) Except with respect to the initial transfer of the Private
Certificates by the Depositor, no transfer, sale, pledge or other
disposition of any Private Certificate shall be made unless such
disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable
state securities laws or is made in accordance with the 1933 Act and
laws. In the event of any such transfer, (i) unless such transfer is
made in reliance upon Rule 144A (as evidenced by the investment letter
delivered
83
to the Trustee, in substantially the form attached hereto as Exhibit
F-2) under the 1933 Act, the Trustee and the Depositor shall require a
written Opinion of Counsel (which may be in-house counsel) acceptable
to and in form and substance reasonably satisfactory to the Trustee and
the Depositor that such transfer may be made pursuant to an exemption,
describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of
Counsel shall not be an expense of the Trustee or the Depositor or (ii)
the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached hereto as Exhibit F-1)
and the transferee to execute an investment letter (in substantially
the form attached hereto as Exhibit F-2) acceptable to and in form and
substance reasonably satisfactory to the Depositor and the Trustee
certifying to the Depositor and the Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the
Trustee or the Depositor. The Holder of a Private Certificate desiring
to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Depositor against any liability that may result if the
transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee and the Depositor, (such requirement is satisfied only by the Trustee's
receipt of a representation letter from the transferee substantially in the form
of Exhibit G hereto, as appropriate), to the effect that such transferee is not
an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan subject to Section 4975 of the Code, nor a person acting on behalf of any
such plan or arrangement nor using the assets of any such plan or arrangement to
effect such transfer or (ii) if the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60") and that the purchase and holding of such
Certificates are covered under PTCE 95-60 or (iii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee which Opinion of Counsel shall
not be an expense of either the Trustee or the Trust, addressed to the Trustee,
to the effect that the purchase or holding of such ERISA- Restricted Certificate
will not result in the assets of the Trust being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of clause (i) of
the preceding sentence, such representation shall be deemed to have been made to
the Trustee by the transferee's acceptance of an ERISA-Restricted Certificate
(or the acceptance by a Certificate Owner of the beneficial interest in any such
Class of ERISA- Restricted Certificates) unless the Trustee shall have received
from the transferee an alternative representation acceptable in form and
substance to the Depositor. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an
84
employee benefit plan subject to ERISA or to the Code without the delivery to
the Trustee of an Opinion of Counsel satisfactory to the Trustee as described
above shall be void and of no effect.
Notwithstanding the foregoing, an Opinion of Counsel or certification
will not be required with respect to the transfer of any Class M Certificates,
Class B-1 Certificates and Class B-2 Certificates to a Depository, or for any
subsequent transfer of a Class M Certificate, Class B-1 Certificate and Class
B-2 Certificates for so long as such Certificate is a Book-Entry Certificate.
Any Transferee of a Book-Entry Certificate will be deemed to have represented by
virtue of its purchase or holding of such Certificate (or interest therein) that
either (a) such Transferee is not a Plan Investor or (b) such Transferee is an
insurance company complying with the procedures in (ii) of the immediately
preceding paragraph (a "Complying Insurance Company").
If any Book-Entry Certificate (or any interest therein) is acquired or
held in violation of the provisions of Section 5.02(d) above, then the last
preceding Transferee that either (i) is not a Plan Investor or (ii) is a
Complying Insurance Company shall be restored, to the extent permitted by law,
to all rights and obligations as Certificate Owner thereof retroactive to the
date of such Transfer of such Certificate. The Trustee shall be under no
liability to any Person for making any payments due on such Certificate to such
preceding Transferee.
Any purported Certificate Owner whose acquisition or holding of any
Book-Entry Certificate (or interest therein) was effected in violation of the
restrictions in this Section 5.02(d) shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer and the Trust Fund from and against
any and all liabilities, claims, costs or expenses incurred by such parties as a
result of such acquisition or holding.
Each Person who has or who acquires any Ownership Interest in a Class R
Certificate shall be deemed by the acceptance or acquisition of such Ownership
Interest to have agreed to be bound by the following provisions and to have
irrevocably appointed the Depositor or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a Class R Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Class
R Certificate unless such Ownership Interest is a PRO RATA undivided
interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall as a
condition to registration of the transfer, require delivery to it, in
form and substance satisfactory to it, of each of the following:
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A. an affidavit in the form of Exhibit F-3 hereto
from the proposed transferee to the effect that such
transferee is a Permitted Transferee and that it is not
acquiring its Ownership Interest in the Class R Certificate
that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted
Transferee; and
B. a covenant of the proposed transferee to the
effect that the proposed transferee agrees to be bound by and
to abide by the transfer restrictions applicable to the Class
R Certificates.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Class R Certificate in violation of the provisions of
this Section shall be absolutely null and void and shall vest no rights
in the purported transferee. If any purported transferee shall, in
violation of the provisions of this Section, become a Holder of a Class
R Certificate, then the prior Holder of such Class R Certificate that
is a Permitted Transferee shall, upon discovery that the registration
of transfer of such Class R Certificate was not in fact permitted by
this Section, be restored to all rights as Holder thereof retroactive
to the date of registration of transfer of such Class R Certificate.
The Trustee shall be under no liability to any Person for any
registration of transfer of a Class R Certificate that is in fact not
permitted by this Section or for making any distributions due on such
Class R Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement so
long as the Trustee received the documents specified in clause (iii).
The Trustee shall be entitled to recover from any Holder of a Class R
Certificate that was in fact not a Permitted Transferee at the time
such distributions were made all distributions made on such Class R
Certificate. Any such distributions so recovered by the Trustee shall
be distributed and delivered by the Trustee to the prior Holder of such
Class R Certificate that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee shall have the right but
not the obligation, without notice to the Holder of such Class R
Certificate or any other Person having an Ownership Interest therein,
to notify the Depositor to arrange for the sale of such Class R
Certificate. The proceeds of such sale, net of commissions (which may
include commissions payable to the Depositor or its affiliates in
connection with such sale), expenses and taxes due, if any, will be
remitted by the Trustee to the previous Holder of such Class R
Certificate that is a Permitted Transferee, except that in the event
that the Trustee determines that the Holder of such Class R Certificate
may be liable for any amount due under this Section or any other
provisions of this Agreement, the Trustee may withhold a corresponding
amount from such remittance as security for such claim. The terms and
conditions of any sale under this clause (v) shall be determined in the
sole discretion of the Trustee and it shall not be liable to any Person
having an Ownership Interest in a Class R Certificate as a result of
its exercise of such discretion.
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(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of
reasonable compensation will provide to the Internal Revenue Service,
and to the persons specified in Sections 860E(e)(3) and (6) of the
Code, information needed to compute the tax imposed under Section
860E(e)(5) of the Code on transfers of residual interests to
disqualified organizations.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Trustee, in form and substance satisfactory to the Trustee, (i) written
notification from each Rating Agency that the removal of the restrictions on
Transfer set forth in this Section will not cause such Rating Agency to
downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the
effect that such removal will not cause any REMIC hereunder to fail to qualify
as a REMIC.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to
the Trustee, the Depositor and the Certificate Registrar such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute on behalf of the Trust, authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and the Certificate Registrar) in
connection therewith. Any duplicate Certificate issued pursuant to this Section,
shall constitute complete and indefeasible evidence of ownership in the Trust,
as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
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Section 5.04 Persons Deemed Owners.
---------------------
The Master Servicer, the Depositor, the Trustee, the Certificate
Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor,
the Certificate Registrar, any Paying Agent or the Trustee may treat the Person,
including a Depository, in whose name any Certificate is registered as the owner
of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and none of the Master
Servicer, the Trust, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
Section 5.05 Appointment of Paying Agent.
---------------------------
(a) The Paying Agent shall make distributions to
Certificateholders from the Distribution Account pursuant to Section
4.01 and shall report the amounts of such distributions to the Trustee.
The duties of the Paying Agent may include the obligation (i) to
withdraw funds from the Distribution Account pursuant to Sections 3.10
and 3.11 and for the purpose of making the distributions referred to
above and (ii) to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder
shall at all times be an entity duly incorporated and validly existing
under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by federal or state authorities.
The Paying Agent shall initially be the Trustee. The Trustee may
appoint a successor to act as Paying Agent, which appointment shall be
reasonably satisfactory to the Depositor and the Rating Agencies.
(b) The Trustee shall cause the Paying Agent (if other than
the Trustee) to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee that such Paying
Agent shall hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such
Certificateholders and shall agree that it shall comply with all
requirements of the Code regarding the withholding of payments in
respect of Federal income taxes due from Certificate Owners and
otherwise comply with the provisions of this Agreement applicable to
it.
ARTICLE VI
THE MASTER SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Master Servicer and the Depositor.
--------------------------------------------------
The Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by the Master
Servicer, as the case may be, herein. The Depositor shall be liable in
accordance herewith only to the extent of the obligations specifically imposed
upon and undertaken by the Depositor.
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Section 6.02 Merger or Consolidation of or Assumption of the
Obligations of the Master Servicer or the Depositor.
---------------------------------------------------
Any entity into which the Master Servicer or Depositor may be merged or
consolidated, or any entity resulting from any merger, conversion or
consolidation to which the Master Servicer or the Depositor shall be a party, or
any corporation succeeding to the business of the Master Servicer or the
Depositor, shall be the successor of the Master Servicer or the Depositor, as
the case may be, hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; PROVIDED, HOWEVER, that the successor master servicer
shall satisfy all the requirements of Section 7.02 with respect to the
qualifications of a successor master servicer.
Section 6.03 Limitation on Liability of the Master Servicer and
Others.
--------------------------------------------------
Neither the Master Servicer nor any of the directors or officers or
employees or agents of the Master Servicer shall be under any liability to the
Trust or the Certificateholders for any action taken or for refraining from the
taking of any action by the Master Servicer in good faith pursuant to this
Agreement, or for errors in judgment; PROVIDED, HOWEVER, that this provision
shall not protect the Master Servicer or any such Person against any liability
which would otherwise be imposed by reason of its willful misfeasance, bad faith
or negligence in the performance of duties of the Master Servicer or by reason
of its reckless disregard of its obligations and duties of the Master Servicer
hereunder; PROVIDED, FURTHER, that this provision shall not be construed to
entitle the Master Servicer to indemnity in the event that amounts advanced by
the Master Servicer to retire any senior lien exceed Liquidation Proceeds (in
excess of related liquidation expenses) realized with respect to the related
Mortgage Loan. The Master Servicer and any director or officer or employee or
agent of the Master Servicer may rely in good faith on any document of any kind
PRIMA FACIE properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer and any director or officer or employee
or agent of the Master Servicer shall be indemnified by the Trust and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense related to any specific Mortgage Loan or Mortgage
Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense
incurred by reason of its willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Master Servicer may undertake any such
action which it may deem necessary or desirable in respect of this Agreement,
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Master Servicer shall be entitled to
be reimbursed therefor only pursuant to Section 3.11. The Master Servicer's
right to indemnity or reimbursement pursuant to this Section shall survive any
resignation or termination of the Master Servicer pursuant to Section 6.04 or
7.01 with respect to any losses, expenses, costs or liabilities arising prior to
such resignation or termination (or arising from events that occurred prior
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to such resignation or termination). This paragraph shall apply to the Master
Servicer solely in its capacity as Master Servicer hereunder and in no other
capacities.
Section 6.04 Master Servicer Not to Resign.
-----------------------------
Subject to the provisions of Section 7.01 and Section 6.02, the Master
Servicer shall not resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by it
or its subsidiaries or Affiliates, the other activities of the Master Servicer
so causing such a conflict being of a type and nature carried on by the Master
Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii)
upon satisfaction of the following conditions: (a) the Master Servicer has
proposed a successor master servicer to the Trustee in writing and such proposed
successor master servicer is reasonably acceptable to the Trustee; and (b) each
Rating Agency shall have delivered a letter to the Trustee prior to the
appointment of the successor master servicer stating that the proposed
appointment of such successor master servicer as Master Servicer hereunder will
not result in the reduction or withdrawal of the then current rating of the
Regular Certificates or the ratings that are in effect; PROVIDED, HOWEVER, that
no such resignation by the Master Servicer shall become effective until such
successor master servicer or, in the case of (i) above, the Trustee shall have
assumed the Master Servicer's responsibilities and obligations hereunder or the
Trustee shall have designated a successor master servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Master Servicer of
responsibility for any of the obligations specified in Sections 7.01 and 7.02 as
obligations that survive the resignation or termination of the Master Servicer.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
Section 6.05 Delegation of Duties.
--------------------
In the ordinary course of business, the Master Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those set forth in Section 3.01. Such delegation shall not relieve
the Master Servicer of its liabilities and responsibilities with respect to such
duties and shall not constitute a resignation within the meaning of Section
6.04. The Master Servicer shall provide the Trustee and the Rating Agencies with
60 days prior written notice prior to the delegation of any of its duties to any
Person other than any of the Master Servicer's Affiliates or their respective
successors and assigns.
ARTICLE VII
DEFAULT
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Section 7.01 Master Servicer Events of Termination.
-------------------------------------
(a) If any one of the following events ("Master Servicer
Events of Termination") shall occur and be continuing:
(i) (A) The failure by the Master Servicer to make any Advance
(other than a Nonrecoverable Advance); or (B) any other failure by the
Master Servicer to deposit in the Collection Account or Distribution
Account any deposit required to be made under the terms of this
Agreement which continues unremedied for a period of one Business Day
after the date upon which written notice of such failure shall have
been given to the Master Servicer by the Trustee, Depositor or by any
Holder of a Regular Certificate evidencing at least 25% of the Voting
Rights; or
(ii) The failure by the Master Servicer to make any required
Advance which failure continues unremedied for a period of 30 days, or
the failure by the Master Servicer duly to observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement, which failure continues
unremedied for a period of 30 days, after the date (A) on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer by the Trustee or by any Holder of a
Regular Certificate evidencing at least 25% of the Voting Rights or (B)
actual knowledge of such failure by a Servicing Officer of the Master
Servicer; or
(iii) The entry against the Master Servicer of a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a trustee, conservator, receiver
or liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 days; or
(iv) The Master Servicer shall voluntarily go into
liquidation, consent to the appointment of a conservator or receiver or
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or of or relating to all or
substantially all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver, liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Master Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations;
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(b) then, and in each and every such case, so long as a Master
Servicer Event of Termination shall not have been remedied within the
applicable grace period, (x) with respect solely to clause (i)(A)
above, if such Advance is not made by 2:00 P.M., New York time, on the
Business Day immediately following the Master Servicer Remittance Date,
the Trustee may terminate all of the rights and obligations of the
Master Servicer under this Agreement and the Trustee, or a successor
master servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to the terms of
Section 7.02, the duties of a successor master servicer and (y) in the
case of (i)(B), (ii), (iii), (iv), (v), (vi) and (vii) above, the
Trustee shall, at the direction of the Holders of each Class of Regular
Certificates evidencing Percentage Interests aggregating not less than
51%, by notice then given in writing to the Master Servicer (and to the
Trustee if given by Holders of Certificates), terminate all of the
rights and obligations of the Master Servicer as servicer under this
Agreement, to the extent permitted by law, and in and to the Mortgage
Loans and the proceeds thereof. Any such notice to the Master Servicer
shall also be given to each Rating Agency and the Depositor. On or
after the receipt by the Master Servicer (and by the Trustee if such
notice is given by the Holders) of such written notice, all authority
and power of the Master Servicer under this Agreement, whether with
respect to the Certificates or the Mortgage Loans or otherwise, shall
pass to and be vested in the Trustee or duly appointed successor master
servicer pursuant to and under this Section; and, without limitation,
the Trustee or duly appointed successor master servicer is hereby
authorized and empowered to execute and deliver, on behalf of the
Master Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement
of each Mortgage Loan and Related Documents or otherwise. The Master
Servicer agrees to cooperate with the Trustee (or the applicable
successor master servicer) in effecting the termination of the
responsibilities and rights of the Master Servicer hereunder,
including, without limitation, the delivery to the Trustee of all
documents and records requested by it to enable it to assume the Master
Servicer's functions under this Agreement within ten Business Days
subsequent to such notice, the transfer within one Business Day
subsequent to such notice to the Trustee (or the applicable successor
master servicer) for the administration by it of all cash amounts that
shall at the time be held by the Master Servicer and to be deposited by
it in the Collection Account, the Distribution Account, any REO Account
or any Servicing Account or that have been deposited by the Master
Servicer in such accounts or thereafter received by the Master Servicer
with respect to the Mortgage Loans or any REO Property received by the
Master Servicer. All Transition Costs incurred in connection with
transferring the Mortgage Files to the successor master servicer and
amending this Agreement to reflect such succession as Master Servicer
pursuant to this Section shall be paid by the predecessor Master
Servicer (or if the predecessor Master Servicer is the Trustee, the
initial Master Servicer) or by the Trust pursuant to Section
3.11(b)(iv) herein if the Master Servicer is unable to fulfill its
obligations hereunder upon presentation of reasonable documentation of
such costs and expenses. For purposes of this Section 7.01, the Trustee
shall not be deemed to have knowledge of a Master
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Servicer Event of Termination unless a Responsible Officer of the
Trustee assigned to and working in the Trustee's Corporate Trust Office
has actual knowledge thereof or unless written notice of any event
which is in fact such a Master Servicer Event of Termination is
received by the Trustee and such notice references the Certificates,
the Trust Fund or this Agreement.
Section 7.02 Trustee to Act; Appointment of Successor.
----------------------------------------
(a) Within 90 days of the time the Master Servicer (and the
Trustee, if notice is sent by the Holders) receives a notice of
termination pursuant to Section 7.01 or 6.04, the Trustee (or such
other successor master servicer as is approved in accordance with this
Agreement) shall be the successor in all respects to the Master
Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to
all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof
arising on and after its succession; provided, however, that if the
Trustee is prohibited by law or regulation from obligating itself to
make advances regarding delinquent mortgage loans, then the Trustee
shall not be obligated to make Advances pursuant to Section 4.06. As
compensation therefor, the Trustee (or such other successor master
servicer) shall be entitled to such compensation as the Master Servicer
would have been entitled to hereunder if no such notice of termination
had been given. Notwithstanding the above, (i) if the Trustee is
unwilling to act as successor master servicer or (ii) if the Trustee is
legally unable so to act, or if the Holders of Certificates entitled to
at least 51% of the Voting Rights so request in writing to the Trustee,
the Trustee shall appoint or petition a court of competent jurisdiction
to appoint, any established housing and home finance institution, bank
or other mortgage loan or home equity loan servicer having a net worth
of not less than $50,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder; PROVIDED, that
the appointment of any such successor master servicer will not result
in the qualification, reduction or withdrawal of the ratings assigned
to the Certificates or the ratings that are in effect by the Rating
Agencies as evidenced by a letter to such effect from the Rating
Agencies. Pending appointment of a successor to the Master Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the
Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the successor shall be
entitled to receive compensation out of payments on Mortgage Loans in
an amount equal to the compensation which the Master Servicer would
otherwise have received pursuant to Section 3.18 (or such other
compensation as the Trustee and such successor shall agree, not to
exceed the Master Servicing Fee). The appointment of a successor master
servicer shall not affect any liability of the predecessor Master
Servicer which may have arisen under this Agreement prior to its
termination as Master Servicer to pay any deductible under an insurance
policy pursuant to Section 3.13 or to indemnify the Trustee pursuant to
Section 6.26, nor shall any successor master servicer be liable for any
acts or omissions of the predecessor Master Servicer or for any breach
by such Master Servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Trustee
and such successor shall take
93
such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession.
(b) If the Master Servicer fails to remit to the Trustee for
distribution to the Certificateholders any payment required to be made
under the terms of the Certificates and this Agreement (for purposes of
this Section 7.02(b), a "Remittance") because the Master Servicer is
the subject of a proceeding under the federal Bankruptcy Code and the
making of such Remittance is prohibited by Section 362 of the federal
Bankruptcy Code, the Trustee shall upon notice of such prohibition,
regardless of whether it has received a notice of termination under
Section 7.01, advance the amount of such Remittance by depositing such
amount in the Distribution Account on the related Distribution Date.
The Trustee shall be obligated to make such advance only if (i) such
advance, in the good faith judgment of the Trustee, can reasonably be
expected to be ultimately recoverable from Stayed Funds and (ii) the
Trustee is not prohibited by law from making such advance or obligating
itself to do so. Upon remittance of the Stayed Funds to the Trustee or
the deposit thereof in the Distribution Account by the Master Servicer,
a trustee in bankruptcy or a federal bankruptcy court, the Trustee may
recover the amount so advanced, with interest, if such interest is
allowed as an Extraordinary Trust Fund Expense, at the then prevailing
Federal Funds Rate, by withdrawing such amount from the Distribution
Account; however, nothing in this Agreement shall be deemed to affect
the Trustee's rights to recover from the Master Servicer's own funds
interest on the amount of any such advance. If the Trustee at any time
makes an advance under this Subsection which it later determines in its
good faith judgment will not be ultimately recoverable from the Stayed
Funds with respect to which such advance was made, the Trustee shall be
entitled to reimburse itself for such advance, without interest, by
withdrawing from the Distribution Account, out of amounts on deposit
therein, an amount equal to the portion of such advance attributable to
the Stayed Funds.
(c) Any successor, including the Trustee, to the Master
Servicer as servicer shall during the term of its service as master
servicer continue to master service and administer the Mortgage Loans
for the benefit of Certificateholders, and maintain in force a policy
or policies of insurance covering errors and omissions in the
performance of its obligations as Master Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the
same extent as the Master Servicer is so required pursuant to Section
3.14.
Section 7.03 Waiver of Master Servicer Events of Termination.
-----------------------------------------------
The Majority Certificateholders may, on behalf of all
Certificateholders, waive any events permitting removal of the Master Servicer
as servicer pursuant to this Article VII, PROVIDED, HOWEVER, that the Majority
Certificateholders may not waive such events or a Master Servicer Event of
Termination in making a required distribution on a Certificate without the
consent of the Holder of such Certificate. Upon any waiver of a past default,
such default shall cease to exist and any Master Servicer Event of Termination
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
94
or impair any right consequent thereto except to the extent expressly so waived.
Notice of any such waiver shall be given by the Trustee to the Rating Agencies.
Section 7.04 Notification to Certificateholders.
----------------------------------
(a) Upon any termination or appointment of a successor the
Master Servicer pursuant to this Article VII or Section 6.04, the
Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the
Certificate Register and each Rating Agency.
(b) No later than 60 days after the occurrence of any event
which constitutes or which, with notice or a lapse of time or both,
would constitute a Master Servicer Event of Termination the Trustee
shall be deemed to have actual knowledge of such Master Servicer Event
of Termination five Business Days after a Responsible Officer of the
Trustee becomes aware of the occurrence of such an event and the
Trustee shall transmit by mail to all Certificateholders notice of such
occurrence unless such default or Master Servicer Event of Termination
shall have been waived or cured. Such notice shall be given to the
Rating Agencies promptly after any such occurrence.
Section 7.05 Survivability of Master Servicer Liabilities.
--------------------------------------------
Notwithstanding anything herein to the contrary, upon termination of
the Master Servicer hereunder, any liabilities of the Master Servicer which
accrued prior to such termination shall survive such termination.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of a Master Servicer Event of
Termination of which a Responsible Officer of the Trustee shall have actual
knowledge and after the curing of all Master Servicer Events of Termination
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. If a Master Servicer Event of
Termination has occurred (which has not been cured) of which a Responsible
Officer has actual knowledge, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether
95
they conform to the requirements of this Agreement; provided, however, that the
Trustee shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer or the Depositor hereunder. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Trustee shall notify the Certificateholders of such
instrument in the event that the Trustee, after so requesting, does not receive
a satisfactorily corrected instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; PROVIDED, HOWEVER, that:
(i) prior to the occurrence of a Master Servicer Event of
Termination, and after the curing of all such Master Servicer Events of
Termination which may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement;
(ii) the Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining or investigating the facts related thereto;
(iii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Majority
Certificateholders relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
or omitting to exercise any trust or power conferred upon the Trustee,
under this Agreement; and
(iv) the Trustee shall not be charged with knowledge of any
failure by the Master Servicer to comply with the obligations of the
Master Servicer referred to in clauses (i) and (ii) of Section 7.01 or
any Master Servicer Event of Termination unless a Responsible Officer
of the Trustee at the Corporate Trust Office obtains actual knowledge
of such failure or the Trustee receives written notice of such failure
from the Master Servicer or the Majority Certificateholders. In the
absence of such receipt of such notice, the Trustee may conclusively
assume that there is no Master Servicer Event of Termination.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions
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contained in this Agreement shall in any event require the Trustee to perform,
or be responsible for the manner of performance of, any of the obligations of
the Master Servicer under this Agreement, except during such time, if any, as
the Trustee shall be the successor to, and be vested with the rights, duties,
powers and privileges of, the Master Servicer in accordance with the terms of
this Agreement.
The Trustee shall not complete foreclosure proceedings, or accept a
deed in lieu of foreclosure, with respect to any Mortgage Loan, unless the
Trustee has been supplied with an Opinion of Counsel to the effect that if the
related Mortgaged Property is acquired by the Trust, such Mortgaged Property
from such Mortgage will qualify as "foreclosure property" within the meaning of
Section 860G(a) (8) of the Code. In the event that the Trustee acquires
possession of any Mortgaged Property in spite of the foregoing, the Trustee
shall dispose of the acquired Mortgaged Property as expeditiously as possible.
The Trustee shall have no duty (A) to see any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance or (C) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Trust Fund other than
from funds available in the Distribution Account to confirm or verify the
contents of any reports or certificates of the Master Servicer delivered to the
Trustee pursuant to this Agreement believed by the Trustee to be genuine and to
have been signed or presented by the proper party or parties.
Section 8.02 Certain Matters Affecting the Trustee.
-------------------------------------
(a) Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon, and shall be
protected in acting or refraining from acting upon, any resolution,
Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or
Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of the Certificateholders
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee
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reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; the right of the
Trustee to perform any discretionary act enumerated in this Agreement
shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in the
performance of any such act;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) prior to the occurrence of a Master Servicer Event of
Termination and after the curing of all Master Servicer Events of
Termination which may have occurred, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
documents, unless requested in writing to do so by the Majority
Certificateholder; PROVIDED, HOWEVER, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such cost, expense or
liability as a condition to such proceeding. The reasonable expense of
every such examination shall be paid by the Master Servicer or, if paid
by the Trustee, shall be reimbursed by the Master Servicer upon demand.
Nothing in this clause (v) shall derogate from the obligation of the
Master Servicer to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors;
(vi) the Trustee shall not be accountable, shall have no
liability and makes no representation as to any acts or omissions
hereunder of the Master Servicer until such time as the Trustee may be
required to act as Master Servicer pursuant to Section 7.02;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Trustee with due care;
and
(viii) the right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and
the Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act.
Section 8.03 Trustee Not Liable for Certificates or Mortgage
Loans.
-----------------------------------------------
The recitals contained herein and in the Certificates (other than the
authentication of the Trustee on the Certificates) shall be taken as the
statements of the Master Servicer, and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as
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to the validity or sufficiency of this Agreement or of the Certificates (other
than the signature and authentication of the Trustee on the Certificates) or of
any Mortgage Loan or Related Document. The Trustee shall not be accountable for
the use or application by the Master Servicer, or for the use or application of
any funds paid to the Master Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account by the Master Servicer.
The Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance
of any such perfection and priority, or for or with respect to the sufficiency
of the Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02); the validity
of the assignment of any Mortgage Loan to the Trustee or of any intervening
assignment; the completeness of any Mortgage Loan; the performance or
enforcement of any Mortgage Loan (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); the compliance by the
Depositor or the Master Servicer with any warranty or representation made under
this Agreement or in any related document or the accuracy of any such warranty
or representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Master Servicer or any loss resulting therefrom, it
being understood that the Trustee shall remain responsible for any Trust
property that it may hold in its individual capacity; the acts or omissions of
any of the Master Servicer (other than if the Trustee shall assume the duties of
the Master Servicer pursuant to Section 7.02), any Sub- Master Servicer or any
Mortgagor; any action of the Master Servicer (other than if the Trustee shall
assume the duties of the Master Servicer pursuant to Section 7.02), or any
Sub-Master Servicer taken in the name of the Trustee; the failure of the Master
Servicer or any Sub-Master Servicer to act or perform any duties required of it
as agent of the Trustee hereunder; or any action by the Trustee taken at the
instruction of the Master Servicer (other than if the Trustee shall assume the
duties of the Master Servicer pursuant to Section 7.02); PROVIDED, HOWEVER, that
the foregoing shall not relieve the Trustee of its obligation to perform its
duties under this Agreement. The Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
master servicer).
Section 8.04 Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not Trustee and may transact any banking and trust business with the Master
Servicer, the Depositor or their Affiliates.
Section 8.05 Master Servicer to Pay Trustee Fees and Expenses.
------------------------------------------------
Prior to disbursing the Available Funds, the Trustee shall withdraw
from the Distribution Account on each Distribution Date and pay to itself the
Trustee Fee and, to the extent funds therein
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are at any time insufficient for such purpose, the Master Servicer shall pay
such fees as reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts hereby created
and in the exercise and performance of any of the powers and duties hereunder of
the Trustee, and the Master Servicer will pay or reimburse the Trustee (or, if
the Master Servicer is unable to fulfill its obligations hereunder, the Trust
Fund will reimburse pursuant to Section 3.11(b)(ii) herein) upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith or which
is the responsibility of Certificateholders or the Trustee hereunder. In
addition, the Master Servicer covenants and agrees to indemnify the Trustee (or,
if the Master Servicer is unable to fulfill its obligations hereunder, the Trust
Fund will reimburse pursuant to Section 3.11(b)(ii) herein) and its officers,
directors, employees and agents from, and hold it harmless against, any and all
losses, liabilities, damages, claims or expenses incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence of the Trustee in the performance of its duties hereunder or by
reason of the Trustee's reckless disregard of obligations and duties hereunder.
Anything in this Agreement to the contrary notwithstanding, in no event shall
the 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
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action. The Trustee and any director, officer, employee or agent
of the Trustee shall be indemnified, by the Trust Fund and held harmless against
any loss, liability or expense (not including expenses, disbursements and
advances incurred or made by the Trustee, including the compensation and the
expenses and disbursements of its agents (other than the Custodian) and its
counsel, in the ordinary course of the Trustee's performance in accordance with
the provisions of this Agreement) incurred by the Trustee or such party arising
out of or in connection with the acceptance or administration of its duties
under this Agreement, other than any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance by the
Trustee of its duties under this Agreement or by reason of the reckless
disregard of the Trustee's obligations and duties under this Agreement. This
section shall survive termination of this Agreement or the resignation or
removal of any Trustee hereunder.
Section 8.06 Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall be a corporation or a national banking
association, and duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and a minimum long-term debt rating of Baa3 by Fitch and a
short-term rating of at least A-1 by S&P, and subject to supervision or
examination by federal or state authority. If such entity publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 8.06, the combined capital and surplus of such entity shall be deemed to
be its combined capital and surplus
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as set forth in its most recent report of condition so published. The principal
office of the Trustee (other than the initial Trustee) shall be in a state with
respect to which an Opinion of Counsel has been delivered to such Trustee at the
time such Trustee is appointed Trustee to the effect that the Trust will not be
a taxable entity under the laws of such state. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.06, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.
Section 8.07 Resignation or Removal of Trustee.
---------------------------------
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor, the Master
Servicer and each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall
have been so appointed and having accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee. If the Depositor or the Master Servicer
removes the Trustee under the authority of the immediately preceding sentence,
the Depositor shall promptly appoint a successor Trustee by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor Trustee.
The Majority Certificateholders may at any time remove the Trustee by
written instrument or instruments delivered to the Master Servicer, the
Depositor and the Trustee; the Depositor shall thereupon use its best efforts to
appoint a successor Trustee in accordance with this Section.
Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 8.07 shall
not become effective until acceptance of appointment by the successor Trustee as
provided in Section 8.08.
Section 8.08 Successor Trustee.
-----------------
Any successor Trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the Rating Agencies, the
Master Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective, and such successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its
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predecessor hereunder, with like effect as if originally named as Trustee. The
Depositor, the Master Servicer and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Trustee all such
rights, powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06 and the appointment of such
successor Trustee shall not result in a downgrading of the Regular Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 8.08, the successor Trustee shall mail notice of the appointment of
a successor Trustee hereunder to all Holders of Certificates at their addresses
as shown in the Certificate Register and to each Rating
Agency.
Section 8.09 Merger or Consolidation of Trustee.
----------------------------------
Any entity into which the Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any entity
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided such entity shall be eligible under the provisions of
Section 8.06 and 8.08, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust or any Mortgaged Property may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Master Servicer. If the Master Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, or in the case a Master Servicer Event of Termination shall have
occurred and be continuing, the Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 8.06, and no
notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 8.08. The Master Servicer shall be
responsible for the fees of any co-trustee or separate trustee appointed
hereunder.
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Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Master Servicer and the Trustee, acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee except that following the occurrence of a Master Servicer
Event of Termination, the Trustee acting alone may accept
the resignation or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Rating Agencies and the Master Servicer.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor Trustee.
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Section 8.11 Limitation of Liability.
-----------------------
The Certificates are executed by the Trustee, not in its individual
capacity but solely as Trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it by the Trust Agreement. Each of the
undertakings and agreements made on the part of the Trustee in the Certificates
is made and intended not as a personal undertaking or agreement by the Trustee
but is made and intended for the purpose of binding only the Trust.
Section 8.12 Trustee May Enforce Claims Without Possession of
Certificates.
------------------------------------------------
(a) All rights of action and claims under this Agreement or
the Certificates may be prosecuted and enforced by the Trustee without
the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and such proceeding instituted by the
Trustee shall be brought in its own name or in its capacity as Trustee
for the benefit of all Holders of such Certificates, subject to the
provisions of this Agreement. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursement and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Certificateholders in respect of which
such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Master
Servicer and each Certificateholder upon reasonable notice during
normal business hours, access to all records maintained by the Trustee
in respect of its duties hereunder and access to officers of the
Trustee responsible for performing such duties. The Trustee shall
cooperate fully with the Master Servicer, the Depositor and such
Certificateholder and shall make available to the Master Servicer, the
Depositor and such Certificateholder for review and copying at the
expense of the party requesting such copies, such books, documents or
records as may be requested with respect to the Trustee's duties
hereunder. The Depositor, the Master Servicer and the
Certificateholders shall not have any responsibility or liability for
any action or failure to act by the Trustee and are not obligated to
supervise the performance of the Trustee under this Agreement or
otherwise.
Section 8.13 Suits for Enforcement.
---------------------
In case a Master Servicer Event of Termination or other default by the
Master Servicer or the Depositor hereunder shall occur and be continuing, the
Trustee may proceed to protect and enforce its rights and the rights of the
Certificateholders under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Agreement or in aid of the execution of
any power granted in this Agreement or for the enforcement of any other legal,
equitable or other remedy, as the Trustee, being advised by counsel, and subject
to the foregoing, shall deem most effectual to protect and enforce any of the
rights of the Trustee and the Certificateholders.
104
Section 8.14 Waiver of Bond Requirement.
--------------------------
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee post a bond or other surety with any
court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement.
---------------------------------------------
The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16 Periodic Filings with the Securities and Exchange
Commission; Additional Information.
-------------------------------------------------
The Trustee shall prepare or cause to be prepared for filing with the
Securities and Exchange Commission (the "Commission") (other than the Current
Report on Form 8-K (as defined in the Securities Act of 1933, as amended) to be
filed by the Depositor in connection with computational materials and the
initial Current Report on Form 8-K to be filed by the Depositor in connection
with the issuance of the Certificates) any and all reports, statements and
information respect the Trust Fund and/or the Certificates required to be filed
with the Commission pursuant to the Securities Exchange Act of 1934, as amended,
and shall solicit any and all proxies of the Certificateholders whenever such
proxies are required to be solicited, pursuant to the Securities Exchange Act of
1934, as amended. The Depositor shall promptly file, and exercise its reasonable
best efforts to obtain a favorable response to, no-action requests with, or
other appropriate exemptive relief from, the Commission seeking the usual and
customary exemption from such reporting requirements granted to issuers of
securities similar to the Certificates. Fees and expenses incurred by the
Trustee in connection with this Section shall not be reimburseable from the
Trust Fund.
The Master Servicer and the Depositor each agree to promptly furnish to
the Trustee, from time to time upon request, such further information, reports
and financial statements within their respective control related to this
Agreement and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission.
ARTICLE IX
REMIC ADMINISTRATION
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Section 9.01 REMIC Administration.
--------------------
(a) A REMIC election shall be made by the Trustee on Form 1066
or other appropriate federal tax or information return or any
appropriate state return for the taxable year ending on the last day of
the calendar year in which the Certificates are issued. The regular
interests in the REMIC and the Class R Certificates shall be designated
as the sole Class of Residual Interest in the REMIC.
(b) The Closing Date is hereby designated as the "Startup Day"
of the REMIC within the meaning of section 860G(a)(9) of the Code.
(c) The Master Servicer shall pay any and all tax related
expenses (not including taxes) of the REMIC, including but not limited
to any professional fees or expenses related to audits or any
administrative or judicial proceedings with respect to the REMIC that
involve the Internal Revenue Service or state tax authorities, but only
to the extent that (i) such expenses are ordinary or routine expenses,
including expenses of a routine audit but not expenses of litigation
(except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or
willful misconduct of the Master Servicer in fulfilling its duties
hereunder (including its duties as tax return preparer). The Master
Servicer shall be entitled to reimbursement of expenses to the extent
provided in clause (i) above from the Collection Account.
(d) The Trustee shall prepare, sign and file, the REMIC's
federal and state tax and information returns as the REMIC's direct
representative. The expenses of preparing and filing such returns shall
be borne by the Trustee.
(e) The Holder of the Class R Certificate at any time holding
the largest Percentage Interest thereof shall be the "tax matters
person" as defined in the REMIC Provisions (the "Tax Matters Person")
with respect to the REMIC and shall act as Tax Matters Person for the
REMIC. The Trustee, as agent for the Tax Matters Person, shall perform
on behalf of the REMIC all reporting and other tax compliance duties
that are the responsibility of the REMIC under the Code, the REMIC
Provisions, or other compliance guidance issued by the Internal Revenue
Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance,
the Trustee, as agent for the Tax Matters Person, shall provide (i) to
the Treasury or other governmental authority such information as is
necessary for the application of any tax relating to the transfer of a
Residual Certificate to any disqualified person or organization and
(ii) to the Certificateholders such information or reports as are
required by the Code or REMIC Provisions.
(f) The Trustee, the Master Servicer and the Holders of
Certificates shall take any action or cause the Trust Fund to take any
action necessary to create or maintain the status of such REMIC as a
REMIC under the REMIC Provisions and shall assist each other as
106
necessary to create or maintain such status. Neither the Trustee, the
Master Servicer nor the Holder of any Residual Certificate shall take
any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the
status of the Trust Fund as a REMIC or (ii) result in the imposition of
a tax upon such REMIC (including but not limited to the tax on
prohibited transactions as defined in Code Section 860F(a)(2) and the
tax on prohibited contributions set forth on Section 860G(d) of the
Code) (either such event, an "Adverse REMIC Event") unless the Trustee
and the Master Servicer have received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that
the contemplated action will not endanger such status or result in the
imposition of such a tax. In addition, prior to taking any action with
respect to the Trust Fund or the assets therein, or causing the Trust
Fund to take any action, which is not expressly permitted under the
terms of this Agreement, any Holder of a Residual Certificate will
consult with the Trustee and the Master Servicer, or their respective
designees, in writing, with respect to whether such action could cause
an Adverse REMIC Event to occur with respect to such REMIC, and no such
Person shall take any such action or cause the Trust Fund to take any
such action as to which the Trustee or the Master Servicer has advised
it in writing that an Adverse REMIC Event could occur.
(g) Each Holder of a Residual Certificate shall pay when due
any and all taxes imposed on the REMIC by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a
Residual Certificateholder, the Trustee shall pay any remaining REMIC
taxes out of current or future amounts otherwise distributable to the
Holder of the Residual Certificate in the REMIC or, if no such amounts
are available, out of other amounts held in the Collection Account, and
shall reduce amounts otherwise payable to Holders of regular interests
in the REMIC, as the case may be.
(h) The Trustee, as agent for the Tax Matters Person, shall,
for federal income tax purposes, maintain books and records with
respect to the Trust Fund REMIC on a calendar year and on an accrual
basis.
No additional contributions of assets shall be made to the Trust Fund, except as
expressly provided in this Agreement with respect to Eligible Substitute
Mortgage Loans.
(i) Neither the Trustee nor the Master Servicer shall enter
into any arrangement by which the Trust Fund will receive a fee or
other compensation for services.
(j) On or before April 15 of each calendar year beginning in
2000, the Trustee shall deliver to the Master Servicer and each Rating
Agency an Officer's Certificate stating, without regard to any actions
taken by the Master Servicer, the Holder of a Class R Certificate, or
the Depositor, that the Trustee has fulfilled its obligations pursuant
to the provisions of this Section 9.01.
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Section 9.02 Prohibited Transactions and Activities.
--------------------------------------
Neither the Depositor, the Master Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, except in a disposition
pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the bankruptcy of the
Trust Fund, (iii) the termination of the Trust Fund pursuant to Article X of
this Agreement, (iv) a substitution pursuant to Article II of this Agreement or
(v) a repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor
acquire any assets for the Trust Fund, nor sell or dispose of any investments in
the Distribution Account for gain, nor accept any contributions to the Trust
Fund after the Closing Date, unless it has received an Opinion of Counsel (at
the expense of the party causing such sale, disposition, or substitution) that
such disposition, acquisition, substitution, or acceptance will not (a) affect
adversely the status of the Trust Fund as a REMIC or of the interests therein
other than the Residual Certificates as the regular interests therein, (b)
affect the distribution of interest or principal on the Certificates, (c) result
in the encumbrance of the assets transferred or assigned to the Trust Fund
(except pursuant to the provisions of this Agreement) or (d) cause the Trust
Fund to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 9.03 Indemnification with Respect to Certain Taxes and
Loss of REMIC Status.
-------------------------------------------------
In the event that the Trust Fund fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions due
to the negligent performance by the Master Servicer of its duties and
obligations set forth herein, the Master Servicer shall indemnify the Holder of
the related Residual Certificate against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; PROVIDED,
HOWEVER, that the Master Servicer shall not be liable for any such Losses
attributable to the action or inaction of the Trustee, the Depositor or the
Holder of such Residual Certificate, as applicable, nor for any such Losses
resulting from misinformation provided by the Holder of such Residual
Certificate on which the Master Servicer has relied. The foregoing shall not be
deemed to limit or restrict the rights and remedies of the Holder of such
Residual Certificate now or hereafter existing at law or in equity.
Notwithstanding the foregoing, however, in no event shall the Master Servicer
have any liability (1) for any action or omission that is taken in accordance
with and in compliance with the express terms of, or which is expressly
permitted by the terms of, this Agreement, (2) for any Losses other than arising
out of a negligent performance by the Master Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
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Section 9.04 REO Property.
------------
(a) Notwithstanding any other provision of this Agreement, the
Master Servicer, acting on behalf of the Trustee hereunder, shall not,
and shall, to the extent provided in the applicable Servicing
Agreement, not permit any Master Servicer to, rent, lease, or otherwise
earn income on behalf of the Trust Fund with respect to any REO
Property which might cause such REO Property to fail to qualify as
"foreclosure" property within the meaning of section 860G(a)(8) of the
Code or result in the receipt by the Trust Fund of any "income from
non-permitted assets" within the meaning of section 860F(a)(2) of the
Code or any "net income from foreclosure property" which is subject to
tax under the REMIC Provisions unless the Master Servicer has advised,
or has caused the applicable Master Servicer to advise, the Trustee in
writing to the effect that, under the REMIC Provisions, such action
would not adversely affect the status of the Trust Fund as a REMIC and
any income generated for the Trust Fund by the REO Property would not
result in the imposition of a tax upon the Trust Fund.
(b) The Master Servicer shall make reasonable efforts to sell
any REO Property for its fair market value. In any event, however, the
Master Servicer shall dispose of any REO Property within three years of
its acquisition by the Trust Fund unless the Master Servicer has
received a grant of extension from the Internal Revenue Service to the
effect that, under the REMIC Provisions and any relevant proposed
legislation and under applicable state law, the Trust Fund may hold REO
Property for a longer period without adversely affecting the REMIC
status of the Trust Fund or causing the imposition of a Federal or
state tax upon the Trust Fund. If the Master Servicer has received such
an extension, then the Master Servicer shall continue to attempt to
sell the REO Property for its fair market value for such period longer
than three years as such extension permits (the "Extended Period"). If
the Master Servicer has not received such an extension and the Master
Servicer is unable to sell the REO Property within 33 months after its
acquisition by the Trust Fund or if the Master Servicer has received
such an extension, and the Master Servicer is unable to sell the REO
Property within the period ending three months before the close of the
Extended Period, the Master Servicer shall, before the end of the three
year period or the Extended Period, as applicable, (i) purchase such
REO Property at a price equal to the REO Property's fair market value
or (ii) auction the REO Property to the highest bidder (which may be
the Master Servicer) in an auction reasonably designed to produce a
fair price prior to the expiration of the three-year period or the
Extended Period, as the case may be.
ARTICLE X
TERMINATION
Section 10.01 TERMINATION.
(a) The respective obligations and responsibilities of the
Master Servicer, the Depositor and the Trustee created hereby (other
than the obligation of the Trustee to make certain payments to
Certificateholders after the final Distribution Date and the obligation
of the Master Servicer to send certain notices as hereinafter set
forth) shall terminate upon notice to the Trustee upon the earliest of
(i) the Distribution Date on which the Certificate Principal Balance of
each Class of Class A Certificates has been reduced to zero, (ii) the
final payment or other liquidation of the last Mortgage Loan in the
Trust, and (iii) the optional
109
purchase by the Master Servicer of the Mortgage Loans as described
below. Notwithstanding the foregoing, in no event shall the trust
created hereby continue beyond the expiration of 21 years from the
death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
late ambassador of the United States to the Court of St. James's,
living on the date hereof.
The Master Servicer may, at its option, terminate this Agreement on any
date on which the Loan Balance is less than 10% of the aggregate Principal
Balance of the Mortgage Loans as of the Cut-off Date or by purchasing, on the
next succeeding Distribution Date, all of the outstanding Mortgage Loans and REO
Properties at a price equal to the sum of the outstanding Stated Principal
Balance of the Mortgage Loans and accrued and unpaid interest thereon at the
weighted average of the Loan Rates through the end of the Due Period preceding
the final Distribution Date plus unreimbursed Servicing Advances, Advances and
any unpaid Master Servicing Fees allocable to such Mortgage Loans and REO
Properties (the "Termination Price").
In connection with any such purchase pursuant to the preceding
paragraph, the Master Servicer shall deposit in the Distribution Account all
amounts then on deposit in the Collection Account (less amounts permitted to be
withdrawn by the Master Servicer pursuant to Section 3.10), which deposit shall
be deemed to have occurred immediately preceding such purchase.
Any such purchase shall be accomplished by deposit into the
Distribution Account on the Determination Date before such Distribution Date of
the Termination Price and the delivery of an opinion of counsel that such
termination is a "Qualified Liquidation" under Section 860F of the
Code.
(b) Notice of any termination, specifying the Distribution
Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be given promptly by the Trustee upon the Trustee
receiving notice of such date from the Master Servicer, by letter to
the Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such
final distribution specifying (1) the Distribution Date upon which
final distribution of the Certificates will be made upon presentation
and surrender of such Certificates at the office or agency of the
Trustee therein designated, (2) the amount of any such final
distribution and (3) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office or agency
of the Trustee therein specified.
(c) Upon presentation and surrender of the Certificates, the
Trustee shall cause to be distributed to the Holders of the
Certificates on the Distribution Date for such final distribution, in
proportion to the Percentage Interests of their respective Class and to
the extent that funds are available for such purpose, an amount equal
to the amount required to be distributed to such Holders in accordance
with the provisions of Section 4.01 for such Distribution Date.
110
(d) In the event that all Certificateholders shall not
surrender their Certificates for final payment and cancellation on or
before such final Distribution Date, the Trustee shall promptly
following such date cause all funds in the Distribution Account not
distributed in final distribution to Certificateholders to be withdrawn
therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate servicing account for the benefit
of such Certificateholders, and the Master Servicer (if the Master
Servicer has exercised its right to purchase the Mortgage Loans) or the
Trustee (in any other case) shall give a second written notice to the
remaining Certificateholders, to surrender their Certificates for
cancellation and receive the final distribution with respect thereto.
If within nine months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Class R
Certificateholder shall be entitled to all unclaimed funds and other
assets which remain subject hereto, and the Trustee upon transfer of
such funds shall be discharged of any responsibility for such funds,
and the Certificateholders shall look to the Class R Certificateholder
for payment.
Section 10.02 Additional Termination Requirements.
-----------------------------------
(a) In the event that the Majority Class R Certificateholder
or the Master Servicer exercises its purchase option as provided in
Section 10.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee shall have
been furnished with an Opinion of Counsel to the effect that the
failure of the Trust to comply with the requirements of this Section
will not (i) result in the imposition of taxes on "prohibited
transactions" of the Trust as defined in Section 860F of the Code or
(ii) cause the Trust Fund constituting part of the Trust Fund to fail
to qualify as a REMIC at any time that any Certificates are
outstanding:
(i) Within 90 days prior to the final Distribution Date, the
Trustee shall adopt and sign a plan of complete liquidation of the
Trust Fund meeting the requirements of a "Qualified Liquidation" under
Section 860F of the Code and any regulations thereunder;
(ii) At or after the time of adoption of such a plan of
complete liquidation and at or prior to the final Distribution Date,
the Trustee shall sell all of the assets of the Trust to the Majority
Class R Certificateholder or the Master Servicer, as applicable, for
cash pursuant to the terms of the plan of complete liquidation; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited (A) to the Holders of each of the Class A
(other than the Class A-IO Certificates), Class B and Class M
Certificates, the related Class Certificate Principal Balance, plus one
month's interest thereon at the applicable Pass-Through Rate, and (B)
to the Class R Certificateholders, all cash on hand after such payment
to the Class A Certificateholders (other than cash retained to meet
claims) and the Trust shall terminate at such time.
111
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Trustee as their attorney in fact to: (i)
adopt such a plan of complete liquidation (and the Certificateholders
hereby appoint the Trustee as their attorney in fact to sign such plan)
as appropriate and (ii) to take such other action in connection
therewith as may be reasonably required to carry out such plan of
complete liquidation all in accordance with the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
---------
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee; and without the consent of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or (iii) to make any other provisions with respect to matters
or questions arising under this Agreement, which shall not be inconsistent with
the provisions of this Agreement; PROVIDED, HOWEVER, that any such action listed
in clause (i) through (iii) above shall not adversely affect in any respect the
interests of any Certificateholder, as evidenced by (i) notice in writing to the
Depositor, the Master Servicer and the Trustee from the Rating Agencies that
such action will not result in the reduction or withdrawal of the rating of any
outstanding Class of Certificates with respect to which it is a Rating Agency,
or (ii) an Opinion of Counsel delivered to the Master Servicer and the Trustee.
In addition, this Agreement may be amended from time to time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of Certificates; PROVIDED,
HOWEVER, that no such amendment or waiver shall (x) reduce in any manner the
amount of, or delay the timing of, payments on the Certificates which are
required to be made on any Certificate without the consent of the Holder of such
Certificate, (y) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (x) above, without the consent of the Holders of Certificates of such
Class evidencing at least a 66% Percentage Interest in such Class, or (z) reduce
the percentage of Voting Rights required by clause (y) above without the consent
of the Holders of all Certificates of such Class then outstanding. Upon approval
of an amendment, a copy of such amendment shall be sent to the Rating Agencies.
Prior to the execution of any amendment to this Agreement, the Trustee shall be
entitled to receive and rely upon an Opinion of Counsel (at the expense of the
Person seeking such amendment) stating that the execution of such amendment is
authorized or permitted by this Agreement. The Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Trustee's own
rights, duties or immunities under this Agreement.
112
Notwithstanding any provision of this Agreement to the contrary, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, delivered by (and at the expense of)
the Person seeking such Amendment, to the effect that such amendment will not
result in the imposition of a tax on the Trust Fund pursuant to the REMIC
Provisions or cause the Trust Fund constituting part of the Trust to fail to
qualify as a REMIC at any time that any Certificates are outstanding and that
the amendment is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Trustee shall
furnish, at the expense of the Person that requested the amendment if such
Person is the Master Servicer (but in no event at the expense of the Trustee),
otherwise at the expense of the Trust, a copy of such amendment and the Opinion
of Counsel referred to in the immediately preceding paragraph to the Master
Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment;
instead it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this 11.01 Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 11.02 Recordation of Agreement; Counterparts.
--------------------------------------
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Trust, but only upon direction of
Certificateholders, accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
------------------------------------------
The death or incapacity of any Certificateholder shall not (i) operate
to terminate this Agreement or the Trust, (ii) entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the
113
Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
Except as expressly provided for herein, no Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 15 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction.
---------------------------
This Agreement shall be construed in accordance with the laws of the
State of New York, and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws. With respect to any
claim arising out of this Agreement, each party irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in The City of New
York, and each party irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding arising out of or
relating hereto brought in any such courts, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in any inconvenient forum and further irrevocably waives the right to object,
with respect to such claim, suit, action or proceeding brought in any such
court, that such court does not have jurisdiction over such party, provided that
service of process has been made by any lawful means.
114
Section 11.05 Notices.
-------
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service, to (a) in the
case of the Originator: Cendant Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇ - Servicing, or such other address or
telecopy number as may hereafter be furnished to the Depositor, the Master
Servicer and the Trustee in writing by the Originator, (b) in the case of the
Trustee, Norwest Bank Minnesota, National Association, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1999-2, with a copy to the Corporate
Trust Office or such other address as may hereafter be furnished to the
Depositor, the Originator and the Master Servicer in writing by the Trustee, (c)
in the case of the Depositor, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Vice President -
Asset Backed Finance, (telecopy number (▇▇▇) ▇▇▇-▇▇▇▇), or such other address or
telecopy number as may be furnished to the Originator, the Master Servicer and
the Trustee in writing by the Depositor, and (d) in the case of the Master
Servicer, Cendant Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, or such other address as may be furnished to Originator, the Depositor
and the Trustee in writing by the Master Servicer. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Notice of any Master Servicer Default shall be given by telecopy and
by certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 11.06 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07 Article and Section References.
------------------------------
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies.
-----------------------------
(a) Each of the Trustee and the Master Servicer shall be
obligated to use its best reasonable efforts promptly to provide notice
to the Rating Agencies with respect to each of
115
the following of which a Responsible Officer of the Trustee or Master
Servicer, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Master Servicer Event of
Termination that has not been cured or waived;
(iii) the resignation or termination of the Master Servicer or
the Trustee;
(iv) the final payment to Holders of the Certificates of any
Class;
(v) any change in the location of any Account; and
(vi) if the Trustee is acting as successor master servicer
pursuant to Section 7.02 hereof, any event that would result in the
inability of the Trustee to make Advances.
(b) In addition, (i) the Trustee shall promptly furnish to
each Rating Agency copies of each Statement to Certificateholders
described in Section 4.06 hereof; and
(i) the Master Servicer shall promptly furnish to each Rating
Agency copies of the following:
(A) each annual statement as to compliance described
in Section 3.19 hereof;
(B) each annual independent public accountants'
servicing report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a)
hereof which relates to the fact that the Master Servicer has
not made an Advance.
Any such notice pursuant to this Section 11.08 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to Standard &
Poor's Ratings Services, a Division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance
Group; Fitch IBCA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
Section 11.09 FURTHER ASSURANCES.
Notwithstanding any other provision of this Agreement, neither the
Regular Certificateholders nor the Trustee shall have any obligation to consent
to any amendment or modification of this Agreement unless they have been
provided reasonable security or indemnity
116
against their out-of-pocket expenses (including reasonable attorneys' fees) to
be incurred in connection therewith.
Section 11.10 Benefits of Agreement.
---------------------
Nothing in this Agreement or in the Certificates, expressed or implied,
shall give to any Person, other than the Certificateholders and the parties
hereto and their successors hereunder, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 11.11 Acts of Certificateholders.
--------------------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given
or taken by the Certificateholders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Certificateholders in person or by agent duly appointed in writing; and
such action shall become effective when such instrument or instruments
are delivered to the Trustee and the Master Servicer. Such instrument
or instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "act" of the Certificateholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of
the Trustee and the Trust, if made in the manner provided in this
Section 11.11.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness
of such execution or by the certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Whenever such execution is by a signer
acting in a capacity other than his or her individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind
every future Holder of such Certificate and the Holder of every
Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee or the Trust in reliance
thereon, whether or not notation of such action is made upon such
Certificate.
117
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, all as of the
day and year first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS,
INC., as Depositor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
CENDANT MORTGAGE CORPORATION, as
Master Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On the 29th day of April, 1999 before me, a notary public in and for
said State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ known to me to be a Vice
President of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc., a Delaware corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the 29th day of April, 1999 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ known to me to be a Vice
President of Cendant Mortgage Corporation, a 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
STATE OF )
) ss.:
COUNTY OF )
On the 29th day of April, 1999 before me, a notary public in and for
said State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, known to me to be Vice
President of Norwest Bank Minnesota National Association, a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said association, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇ ▇. Dkougbo
---------------------
Notary Public
EXHIBIT A
---------
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
Series 1999-2, Class [A-__]
Pass-Through Rate: [_____% per annum]
[Variable]
Date of Agreement and Cut-off Date:
April 1, 1999
First Distribution Date: May 25, 1999
No. 1
Aggregate [Certificate Principal Balance]
[Notional Amount] of Class A-__ Certificates
as of the Issue Date: $______________
[Denomination] [Notional Amount]:
$______________
Master Servicer:
Cendant Mortgage Corporation
Trustee: Norwest Bank Minnesota, National
Association
Issue Date: April 29, 1999
CUSIP: 151314 ____
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE
PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX
ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS CERTIFICATE.
THE ISSUE DATE OF THIS CERTIFICATE IS APRIL 29, 1999. BASED
ON THE OID REGULATIONS AND ASSUMING THAT THE MORTGAGE
LOANS PREPAY AT 275% OF THE STANDARD PREPAYMENT
ASSUMPTION, USED SOLELY FOR THE PURPOSES OF APPLYING THE
OID RULES TO THE CERTIFICATES (THE "PREPAYMENT
ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO
MORE THAN $_______ OF OID PER $100,000 OF INITIAL NOTIONAL
AMOUNT, THE YIELD TO MATURITY IS ____% AND THE AMOUNT OF
OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $____ PER $100,000 OF INITIAL NOTIONAL AMOUNT,
COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS
MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
-2-
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE.]
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
SERIES 1999-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that __________ is the registered owner of a
Percentage Interest (obtained by dividing the [denomination] [Notional Amount]
of this Certificate by the aggregate [Certificate Principal Balance] [Notional
Amount] of the Class A-__ Certificates as of the Issue Date) in that certain
beneficial ownership interest evidenced by all the Class A-__ Certificates in
the Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement), the Master Servicer and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. 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 which such
Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-__ Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-__ Certificates, the
aggregate initial [Certificate Principal Balance] [Notional Amount] of which is
in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate
initial [Certificate Principal Balance] [Notional Amount] of the Class A-__
Certificates, or otherwise by check mailed by first class mail to the address of
the Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after
-4-
due notice by the Trustee of the pendency of such distribution and only upon the
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate [Certificate Principal Balance] [Notional Amount] of the Class of
Certificates specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent 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 herefor 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.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from The
Trust Fund all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining therein at a price determined as provided in the
Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 29, 1999
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
as Trustee
By:
-----------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
as Certificate Registrar
By:
-----------------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
-8-
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, 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.
EXHIBIT B
FORM OF CLASS B CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID")
RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS APRIL
29, 1999. BASED ON THE OID REGULATIONS AND ASSUMING THAT THE MORTGAGE
LOANS PREPAY AT 275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY
FOR THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE
THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
THE YIELD TO MATURITY IS ____% AND THE AMOUNT OF OID ATTRIBUTABLE TO
THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____ PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE
RESIDUAL CERTIFICATES, [THE CLASS M CERTIFICATES, THE CLASS B-1
CERTIFICATES, THE CLASS B-2 CERTIFICATES, THE CLASS B-3 CERTIFICATES,
THE CLASS B-4 CERTIFICATES, THE CLASS B-5 CERTIFICATES] TO THE EXTENT
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE
AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT
TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
-2-
TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 5.02 OF THE AGREEMENT.]
-3-
Series 1999-2, Class B-__
Pass-Through Rate: 6.50% per annum
Date of Agreement and Cut-off Date:
April 1, 1999
First Distribution Date: May 25, 1999
No. 1
Aggregate Certificate Principal Balance of
Class B-__ Certificates as of the Issue Date:
$----------
Denomination: $__________
Master Servicer:
Cendant Mortgage Corporation
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: April 29, 1999
CUSIP: 151314 ____
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
-4-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
SERIES 1999-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class B-__ Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class B-__ Certificates in the Trust Fund created pursuant to a Pooling
and Servicing Agreement, dated as specified above (the "Agreement"), among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. 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 which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class B-__ Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class B-__ Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class B-__ Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address shall appear on the Certificate Register.
-5-
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon the presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent 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 herefor 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.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-6-
[No transfer of this Certificate shall be made unless the
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and an effective
registration or qualification under applicable state securities laws, or is made
in a transaction that does not require such registration or qualification. In
the event that such a transfer of this Certificate is to be made without
registration or qualification, (i) unless such transfer is made in reliance upon
Rule 144A (as evidenced by the investment letter delivered to the Trustee, in
substantially the form attached to the Agreement as Exhibit F- 2) under the 1933
Act, the Trustee and the Depositor shall require a written Opinion of Counsel
(which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Trustee and the Depositor that such transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act,
which Opinion of Counsel shall not be an expense of the Trustee or the Depositor
or (ii) the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Agreement as Exhibit F-1)
and the transferee to execute an investment letter (in substantially the form
attached to the Agreement as Exhibit F-2) acceptable to and in form and
substance reasonably satisfactory to the Depositor and the Trustee certifying to
the Depositor and the Trustee the facts surrounding such transfer, which
investment letter shall not be an expense of the Trustee or the Depositor. None
of the Depositor, the Certificate Registrar or the Trustee is obligated to
register or qualify the Class of Certificates specified on the face hereof under
the 1933 Act or any other securities law or to take any action not otherwise
required under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Certificate Registrar and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.]
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(d) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the Distribution Date on which the Certificate Principal
-7-
Balance of each Class of Certificates has been reduced to zero, (ii) the final
payment (or any advance with respect thereto) on or other liquidation of the
last Mortgage Loan remaining in The Trust Fund and (iii) the optional purchase
by the party designated in the Agreement at a price determined as provided in
the Agreement from The Trust Fund of all the Mortgage Loans and all property
acquired in respect of such Mortgage Loans remaining therein. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from The Trust Fund all the Mortgage Loans and all property acquired in respect
of any Mortgage Loan remaining therein at a price determined as provided in the
Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-8-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 29, 1999
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Certificate Registrar
By:
--------------------------------
Authorized Signatory
-9-
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
-10-
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, 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.
EXHIBIT C-1
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES PERSON.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE
TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY
POSSESSION THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT IS EXEMPT
FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION
IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH
PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL
HEREINAFTER BE REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (4) AN
AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II)
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OF ANY
-2-
TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION,
SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
THIS CERTIFICATE BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION
5.02(D) OF THE AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CERTIFICATE.
Series 1999-2, Class R
Pass-Through Rate: 6.50% per annum
Date of Agreement and Cut-off Date:
April 1, 1999
First Distribution Date: May 25, 1999
No. 1
Aggregate Certificate Principal Balance of
Class R Certificates as of the Issue Date:
$---------
Denomination: $______
Master Servicer:
Cendant Mortgage Corporation
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: April 29, 1999
CUSIP: 151314 ____
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
SERIES 1999-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R Certificates in The Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. 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 which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register.
-4-
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon the presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent 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 herefor 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.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(d) of the Agreement.
Prior to registration of any transfer, sale or other
disposition of this Certificate, the proposed transferee shall provide to the
Trustee (i) an affidavit to the effect that such transferee is any Person other
than a Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the Holders
of the Certificates of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The
-6-
Agreement permits, but does not require, the party designated in the Agreement
to purchase from The Trust Fund all the Mortgage Loans and all property acquired
in respect of any Mortgage Loan remaining therein at a price determined as
provided in the Agreement. The exercise of such right will effect early
retirement of the Certificates; however, such right to purchase is subject to
the aggregate Loan Balance of the Mortgage Loans at the time of purchase being
less than 10% of the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-7-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 29, 1999
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:
--------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Certificate Registrar
By:
--------------------------------------
Authorized Signatory
-8-
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
-9-
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, 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.
EXHIBIT C-2
FORM OF CLASS M CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT", AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID")
RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS APRIL
29, 1999. BASED ON THE OID REGULATIONS AND ASSUMING THAT THE MORTGAGE
LOANS PREPAY AT 275% OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY
FOR THE PURPOSES OF APPLYING THE OID RULES TO THE CERTIFICATES (THE
"PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE
THAN $_____ OF OID PER $1,000 OF INITIAL CERTIFICATE PRINCIPAL BALANCE,
THE YIELD TO MATURITY IS ____% AND THE AMOUNT OF OID ATTRIBUTABLE TO
THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $____ PER $1,000 OF INITIAL
CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE EXACT METHOD. NO
REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE
BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND THE
RESIDUAL CERTIFICATES TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED
TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE
CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
Series 1999-2, Class M
Pass-Through Rate: ____% per annum
Date of Agreement and Cut-off Date:
April 1, 1999
April 1, 1999
First Distribution Date: May 25, 1999
No. 1
-2-
Aggregate Certificate Principal Balance of
Class M Certificates as of the Issue Date:
$------------
Denomination: $____________
Master Servicer:
Cendant Mortgage Corporation
Trustee: Norwest Bank Minnesota,
National Association
Issue Date: April 29, 1999
CUSIP: 151314 ____
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS
CERTIFICATE.
-3-
MORTGAGE PASS-THROUGH CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional, one- to four-family, fixed-rate,
first lien mortgage loans (the "Mortgage Loans") formed and sold by
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.
SERIES 1999-2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC., THE MASTER SERVICER, THE
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE
NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
This certifies that _______________ is the registered owner of
a Percentage Interest (obtained by dividing the denomination of this Certificate
by the aggregate Certificate Principal Balance of the Class M Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class M Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among ▇▇▇▇▇▇▇
▇▇▇▇▇ Mortgage Investors, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement), the Master Servicer and the
Trustee, a summary of certain of the pertinent provisions of which is set forth
hereafter. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. 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 which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M Certificates on such Distribution
Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Class M Certificates, the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class M Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address shall appear on the Certificate Register.
-4-
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon the presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Mortgage Pass-Through Certificates of the Series
specified on the face hereof (hereinafter called the "Certificates") and
representing a Percentage Interest in the Class of Certificates specified on the
face hereof equal to the denomination specified on the face hereof divided by
the aggregate Certificate Principal Balance of the Class of Certificates
specified on the face hereof.
The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to Holders
of the Certificates, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions and conditions
provided therein, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Master Servicer and the Trustee and the rights
of the Holders of the Certificates under the Agreement at any time by the
Depositor, the Master Servicer and the Trustee, with the consent of the Holders
of Certificates entitled to at least 66%, in some cases 100%, of the Voting
Rights. Any such consent 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 herefor 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.
As provided in the Agreement and subject to certain
limitations set forth therein, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies appointed by the Trustee as provided in
the Agreement, duly endorsed by, or accompanied by an assignment in the form
below or other written instrument of transfer in form satisfactory to the
Trustee and the Certificate Registrar duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest will be issued to the designated transferee or
transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and denominations representing Percentage Interests
specified in the Agreement. As provided in the Agreement and subject to certain
limitations set forth therein, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
-5-
No transfer of this Certificate to a Plan subject to ERISA or
Section 4975 of the Code, any Person acting, directly or indirectly, on behalf
of any such Plan or any person using Plan Assets to acquire this Certificate
shall be made except in accordance with Section 5.02(d) of the Agreement.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Master Servicer, the Trustee and the
Certificate Registrar and any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment (or provision for payment) to the
Holders of the Certificates of all amounts held by or on behalf of the Trustee
and required to be paid to them pursuant to the Agreement following the earlier
of (i) the Distribution Date on which the Certificate Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment (or any
advance with respect thereto) on or other liquidation of the last Mortgage Loan
remaining in The Trust Fund and (iii) the optional purchase by the party
designated in the Agreement at a price determined as provided in the Agreement
from The Trust Fund of all the Mortgage Loans and all property acquired in
respect of such Mortgage Loans remaining therein. The Agreement permits, but
does not require, the party designated in the Agreement to purchase from The
Trust Fund all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan remaining therein at a price determined as provided in the
Agreement. The exercise of such right will effect early retirement of the
Certificates; however, such right to purchase is subject to the aggregate Loan
Balance of the Mortgage Loans at the time of purchase being less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date.
The recitals contained herein shall be taken as statements of
the Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been
executed by the Certificate Registrar, by manual signature, this Certificate
shall not be entitled to any benefit under the Agreement or be valid for any
purpose.
-6-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: April 29, 1999
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By:
---------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Certificate Registrar
By:
----------------------------------------
Authorized Signatory
-7-
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-----------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
of survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in
the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Mortgage Pass-Through
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
-8-
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, 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.
-9-
EXHIBIT D
MORTGAGE LOAN SCHEDULE
(See Tab No. __)
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Norwest Bank Minnesota, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Inventory Control
Re: Pooling and Servicing Agreement dated as of April 1, 1999, among
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investments, Inc., as Depositor, Cendant
Mortgage Corporation, as Master Servicer and Norwest Bank
Minnesota, National Association, as Trustee
In connection with the administration of the Mortgage Loans held by you
as Trustee for the Owner pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Trustee's 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
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation Reason:____________________
Address to which Trustee should
Deliver the Trustee's Mortgage File: ______________________________
______________________________
______________________________
By:_______________________________
(authorized signer)
Issuer:___________________________
Address: _______________________
_______________________
Date: _______________________
Custodian
---------
Norwest Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature and date
below:
______________________________ _______________________________
Signature Date
Documents returned to Trustee:
______________________________ _______________________________
Custodian Date
EXHIBIT F-1
-----------
FORM OF TRANSFEROR CERTIFICATE
[Date]
[Trustee]
__________________
__________________
[Certificate Registrar]
_______________________
_______________________
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1999-2,
Class ___, representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned mortgage
pass-through certificates (the "Certificates"), the Transferor hereby certifies
as follows:
Neither the Transferor nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, (e) has taken any other action, that (in the case of each of
subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933, as amended (the "1933 Act"), or
would render the disposition of any Certificate a violation of Section 5 of the
1933 Act or any state securities law or would require registration or
qualification pursuant thereto. The Transferor will not act, nor has it
authorized or will it authorize any person to act, in any manner set forth in
the foregoing sentence with respect to any Certificate. The Transferor will not
sell or otherwise transfer any of the Certificates, except in compliance with
the provisions of that certain Pooling and Servicing Agreement, dated as of
April 1, 1999, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. as Depositor,
Cendant Mortgage Corporation as Master Servicer and Norwest Bank Minnesota,
National Association as Trustee (the "Pooling and Servicing Agreement"),
pursuant to which Pooling and Servicing Agreement the Certificates were issued.
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Pooling and Servicing Agreement.
Very truly yours,
[Transferor]
By:_____________________________
Name:___________________________
Title:__________________________
EXHIBIT F-2
-----------
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
[Trustee]
__________________
__________________
[Certificate Registrar]
_______________________
_______________________
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1999-2,
Class ___, representing a ___% Class ___ Percentage Interest
------------------------------------------------------------
Ladies and Gentlemen:
In connection with the purchase from ______________________
(the "Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933 (the "1933 Act") and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The
Transferee is aware that the sale to it is being made in reliance on
Rule 144A. The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer, and
understands that such Certificate may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
nature, performance and servicing of the Mortgage Loans, (c) the
Pooling and Servicing Agreement referred to below, and (d) any credit
enhancement mechanism associated with the Certificates, that it has
requested.
All capitalized terms used but not otherwise defined herein
have the respective meanings assigned thereto in the Pooling and Servicing
Agreement, dated as of April 1, 1999, among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc. as Depositor, Cendant Mortgage Corporation as Master Servicer and Norwest
Bank Minnesota, National Association as Trustee, pursuant to which the
Certificates were issued.
[TRANSFEREE]
By:_____________________________
Name:___________________________
Title:__________________________
ANNEX 1 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Norwest Bank Minnesota, National Association,
as Trustee and Certificate Registrar, with respect to the mortgage pass-through
certificates (the "Certificates") described in the Transferee Certificate to
which this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $______________________1 in
securities (except for the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being calculated in
accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the
category marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
--------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only
purchase for the account of a third party that at the time is a "qualified
institutional buyer" within the meaning of Rule 144A. In addition, the
Transferee agrees that the Transferee will not purchase securities for a third
party unless the Transferee has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
Dated:
_______________________________
Print Name of Transferee
By:_____________________________
Name:___________________________
Title:__________________________
ANNEX 2 TO EXHIBIT F-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to [name of
Transferor] (the "Transferor") and Norwest Bank Minnesota, National Association,
as Trustee and Certificate Registrar, with respect to the mortgage pass-through
certificates (the "Certificates") described in the Transferee Certificate to
which this certification relates and to which this certification is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Transferee's purchase of the Certificates will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Dated:
___________________________________
Print Name of Transferee or Advisor
By:_____________________________
Name:___________________________
Title:__________________________
IF AN ADVISER:
___________________________________
Print Name of Transferee
The undersigned hereby certifies on behalf of the purchaser
named below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as
defined in Rule 144A, ("Rule 144A") under the Securities Act of 1933,
as amended.
3. As of the date specified below (which is not earlier than
the last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on
a discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser_______________________________________________________________
By: (Signature)____________________________________________________________
Name of Signatory_______________________________________________________________
Title___________________________________________________________________________
Date of this certificate________________________________________________________
Date of information provided in paragraph 3_____________________________________
EXHIBIT F-3
-----------
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ______________________ of __________________________
(the "Owner") a corporation duly organized and existing under the laws of
______________, the record owner of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates, Series 1999-2, Class R (the "Class R
Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Class R Certificates were issued.
2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 199___ and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.
4. The Owner is aware of the tax imposed on a "pass-through
entity" holding the Class R Certificates if, at any time during the taxable year
of the pass-through entity, a non-Permitted Transferee is the record holder of
an interest in such entity. (For this purpose, a "pass-through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is aware that the Trustee will not register the
transfer of any Class R Certificate unless the transferee, or the transferee's
agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. The Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Class R Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
7. The Owner's taxpayer identification number is
_________________.
8. The Owner has reviewed the restrictions set forth on the
face of the Class R Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R Certificates were issued
(in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. The Owner is not acquiring and will not transfer the Class
R Certificates in order to impede the assessment or collection of any tax.
10. The Owner anticipates that it will, so long as it holds
the Class R Certificates, have sufficient assets to pay any taxes owed by the
holder of such Class R Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Class R Certificates that the
Owner intends to pay taxes associated with holding such Class R Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Class R Certificates.
11. The Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Class R Certificates.
12. The Owner has no present knowledge or expectation that it
will be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
13. The Owner is not acquiring the Class R Certificates with
the intent to transfer the Class R Certificates to any person or entity that
will not have sufficient assets to pay any taxes owed by the holder of such
Class R Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Class R Certificates remain outstanding.
14. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, obtain from its transferee the
representations required by Section 5.02(d) of the Pooling and Servicing
Agreement under which the Class R Certificate were issued and will not
consummate any such transfer if it knows, or knows facts that should lead it to
believe, that any such representations are false.
15. The Owner will, in connection with any transfer that it
makes of the Class R Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Class R Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Class R Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding for so long as the Class
R Certificates remains outstanding; and (iii) is not a "Permitted Transferee".
16. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 199___.
[OWNER]
By:_____________________________
Name:___________________________
Title: [Vice] President
ATTEST:
By:_________________________________
Name:_______________________________
Title: [Assistant] Secretary
Personally appeared before me the above-named _______________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
___________________________
Notary Public
County of _____________________
State of ______________________
My Commission expires:
FORM OF TRANSFEROR AFFIDAVIT
STATE OF NEW YORK )
: ss. :
COUNTY OF NEW YORK )
___________________________________, being duly sworn,
deposes, represents and warrants as follows:
1. I am a ____________________ of ____________________________
(the "Owner"), a corporation duly organized and existing under the laws of
______________, on behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R (the "Residual
Certificates") to impede the assessment or collection of any tax.
3. The Owner has no actual knowledge that the Person that is
the proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.
4. The Owner understands that the Purchaser has delivered to
the Trustee a transfer affidavit and agreement in the form attached to the
Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.
5. At the time of transfer, the Owner has conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they became due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such an investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Pooling and Servicing Agreement
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 199___.
[OWNER]
By:_____________________________
Name:___________________________
Title: [Vice] President
ATTEST:
By:_________________________________
Name:_______________________________
Title: [Assistant] Secretary
Personally appeared before me the above-named _______________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a [Vice] President of the Owner, and acknowledged to me
that [he/she] executed the same as [his/her] free act and deed and the free act
and deed of the Owner.
Subscribed and sworn before me this ____ day of __________,
199___.
___________________________
Notary Public
County of _____________________
State of ______________________
My Commission expires:
EXHIBIT G
---------
FORM OF ERISA REPRESENTATION LETTER
_____________, 199__
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
World Financial Center -- North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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Norwest Bank Minnesota, National Association
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Cendant Mortgage Corporation
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
Mortgage Pass-through Certificates, Series 1999-2, Class__
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Ladies and Gentlemen:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. Mortgage
Pass-Through Certificates, Series 1999-2, Class ___ (the "Certificates"), issued
pursuant to a Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement") dated as of April 1, 1999 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors,
Inc. as depositor (the "Depositor"), Cendant Mortgage Corporation as Master
Servicer (the "Master Servicer") and Norwest Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer that
the following statements in either (1) or (2) are accurate:
_____ (1) The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or other retirement arrangement, including
individual retirement accounts and annuities, ▇▇▇▇▇ plans and bank
collective investment funds and insurance company general or separate
accounts in which such plans, accounts or arrangements are invested,
that is subject to Section 406 of ERISA or Section 4975 of the Internal
Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
(ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss.
2510.3-101, and (iii) will not be transferred to any entity that is
deemed to be investing in plan assets within the meaning of the DOL
regulation at 29 C.F.R. ss. 2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under
ERISA or Section 4975 of the Code, will not subject the Depositor, the
Trustee or the Master Servicer to any obligation in addition to those
undertaken in the Pooling and Servicing Agreement and one of the
following conditions are met:
(i) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificate is an
"insurance company general account" (as such term is defined
in PTCE 95-60), (B) the conditions set forth in PTCE 95-60
have been satisfied and (C) there is no Plan with respect to
which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan
and all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same
employee organization, exceeds 10% of the total of all
reserves and liabilities of such general account (as
determined under PTCE 95-60) as of the date of the acquisition
of such Certificates;
(ii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
insurance company general account, (B) the requirements of
Section 401(c) of ERISA and the regulations to be promulgated
thereunder ("401(c) Regulations") have been satisfied and will
continue to be satisfied and (C) the insurance company
represents that it understands that the operation of the
general account after December 31, 1998 may affect its ability
to continue to hold such Certificates after the date which is
18 months after the 401(c) Regulations become final and that
unless a Class Exemption or an exception under Section 401(c)
of ERISA is then available for the continued holding of such
Certificates, it will dispose of such Certificates prior to
the date which is 18 months after the 401(c) Regulations
become final;
(iii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
"insurance company pooled separate account" (as such term is
defined in PTCE 90-1), (B) the conditions set forth in PTCE
90-1 have been satisfied and (C) there is no Plan, together
with all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 90-1) or by the same
employee organization, with assets which exceed 10% of the
total of all assets in such pooled separate account (as
determined under PTCE 90-1) as of the date of the acquisition
of such Certificates;
(iv) the transferee is a bank and (A) the source of
funds used to purchase such Certificates is a "collective
investment fund" (as defined in PTCE 91-38), (B) the
conditions set forth in PTCE 91-38 have been satisfied and (C)
there is no Plan, the interests of which, together with the
interests of any other Plans maintained by the same employer
or employee organization, in the collective investment fund
exceed 10% of the total of all assets in the collective
investment fund (as determined under PTCE 91-38) as of the
date of acquisition of such Certificates;
(v) the transferee is a "qualified professional asset
manager" described in PTCE 84-14 and the conditions set forth
in PTCE 84-14 have been satisfied and will continue to be
satisfied; or
(vi) the transferee is an "in-house asset manager"
described in PTCE 96-23 and the conditions set forth in PTCE
96-23 have been satisfied and will continue to be satisfied.
Very truly yours,
________________________________
By:_____________________________
Name:
Title:
EXHIBIT H
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FORM OF LOST NOTE AFFIDAVIT
[Cendant Mortgage Corporation] [▇▇▇▇▇▇'▇ Gate Residential
Mortgage Trust], a Delaware [corporation] [trust] (the "Mortgage Loan Seller"),
by its undersigned authorized representative, hereby certifies:
Pursuant to the Mortgage Loan Purchase Agreement, dated April
26, 1999, [between the Mortgage Loan Seller and] [among the Mortgage Loan
Seller, Cendant Mortgage Corporation and] ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
(the "Depositor"), the Mortgage Loan Seller is granting all of its right, title
and interest in and to the Mortgage Loan identified below to the Depositor.
Terms used but not defined herein have the respective meanings assigned to them
in the Mortgage Loan Purchase Agreement.
Mortgage Loan Number:
Maker:
Original Principal Amount:
Original Mortgage Note Date:
Maturity Date:
The Mortgage Loan Seller is the current owner and holder of
the indebtedness evidenced by the original Mortgage Note.
After diligent search, the Mortgage Loan Seller has been
unable to locate the original Mortgage Note and believes it to be lost or
misplaced.
A true, complete and correct photocopy of the original
Mortgage Note is attached hereto.
If at any time the Mortgage Loan Seller locates the original
Mortgage Note, the Mortgage Loan Seller shall endorse such original Mortgage
Note in the following form: "Pay to the order of insert 4, as Trustee for the
registered holders of insert 1, Mortgage Pass-Through Certificates, Series
1999-2, without recourse," and shall promptly deliver to the Trustee the
original Mortgage Note so endorsed, with all prior and intervening endorsements
showing a complete chain of endorsement from the originator to the Mortgage Loan
Seller.
The Mortgage Loan Seller hereby indemnifies the Depositor, the
Trustee and the Certificateholders from and against any and all losses,
liabilities, damages, claims or expenses of whatever kind (including without
limitation attorneys' fees and disbursements) arising from or in connection with
the Mortgage Loan Seller's failure to have delivered the original Mortgage Note
(as required under the Mortgage Loan Purchase Agreement) to the Trustee as
designee of the Depositor, including without limitation any such losses,
liabilities, damages, claims or expenses arising from or in connection with any
claim by any third party who is the holder of such indebtedness by virtue of its
possession of such original Mortgage Note.
This Lost Note Affidavit shall inure to the benefit of the
Depositor, the Trustee and the Certificateholders and their respective
successors and permitted assigns.
Dated:
insert 1
By:______________________________
Name:____________________________
Title:___________________________
EXHIBIT I-1
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FORM OF TRUSTEE'S INITIAL CERTIFICATION
________________________, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cendant Mortgage Corporation
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of April 1, 1999,
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.,
Cendant Mortgage Corporation and Norwest Bank
Minnesota, National Association
Mortgage Pass-Through Certificates, Series 1999-2
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Ladies and Gentlemen:
Attached is the Trustee's preliminary exception report
delivered in accordance with Section ___ of the referenced Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"). Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Pooling
and Servicing Agreement.
The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement. The Trustee makes no
representations as to (i) the validity, legality, sufficiency, enforceability or
genuineness of any of the documents contained in the Mortgage File pertaining to
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) whether any Mortgage File included any of the documents specified
in clause ___ of Section ___ of the Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:_________________________________
Name:
Title:
EXHIBIT I-2
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FORM OF TRUSTEE FINAL CERTIFICATION
___________________________, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cendant Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement, dated as of April 1, 1999,
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc.,
Cendant Mortgage Corporation and Norwest Bank
Minnesota, National Association
Mortgage Pass-Through Certificates, Series 1999-2
-------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, hereby certifies that, except as noted on
the Schedule of Exceptions attached hereto, for 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 a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.
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 as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:__________________________________
Name:
Title: